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House of Commons
Monday 25 March 1991
The House met at half-past Two o'clock
PRAYERS
[Mr. Speaker-- in the Chair ]
Oral Answers to Questions
ENERGY
Carbon Dioxide Emissions
1. Mr. Squire : To ask the Secretary of State for Energy what is his estimate of the amount of carbon dioxide that would be emitted by fossil fuel power stations equivalent to existing nuclear capacity.
The Secretary of State for Energy (Mr. John Wakeham) : Britain would emit around 15.5 million tonnes more carbon if the electricity currently provided by existing nuclear power stations were to be generated by coal, increasing total United Kingdom emissions by nearly 10 per cent. The environmental benefits of nuclear power in this context are recognised in a joint declaration on nuclear co-operation, which I am issuing today with my counterparts in France, Germany and Belgium. I am placing copies of the declaration in the Library.
Mr. Squire : I thank my right hon. Friend for that encouraging answer about co-operation. However, does not he find it astonishing, not merely on common-sense grounds, but on environmental grounds, that the Labour party is pledged to phase out nuclear power? Does he agree that that is idiotic and can lead only to environmental damage and a reduction of our present open choice of fuel?
Mr. Wakeham : My hon. Friend is absolutely right. The declaration of the four Governments agrees that nuclear power can make a significant contribution to the solution of environmental problems associated with fossil-fuel power generation, such as global warming and acid rain. When we review nuclear power in 1994, it will be important to take such considerations into account.
Home Energy Efficiency Scheme
3. Mr. French : To ask the Secretary of State for Energy if he will make a statement on the home energy efficiency scheme.
The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory) : During the first two months some 16,000 direct applications for grant were received by the administering agency. In a full year, £26 million will be available under the scheme for assistance to low-income households.
Mr. French : I congratulate my hon. Friend on the excellent progress that the scheme is making and especially
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on the way in which it encourages voluntary groups to assist elderly people. However, will he try to ensure that the scheme is publicised more widely among the general public, because, although small, it is a very good illustration of the way in which Conservative policies ensure that talking about caring for the elderly and about energy conservation are translated into positive action?Mr. Heathcoat-Amory : I am grateful to my hon. Friend for his remarks. Initial interest in the scheme has been high, suggesting that the publicity associated with its launch in January achieved the desired effect. It would be helpful, however, if hon. Members of all parties would help to publicise the scheme locally and would point out to low-income households and groups that substantial grants are available to help with better insulation and to provide good draughtproofing. The scheme also includes energy efficiency advice.
Mr. Simon Hughes : I, too, welcome the scheme. However, I deduce from the Minister's answer that it is cash-limited. I agree that we should all join in publicising the scheme, but does he accept that, if it is cash- limited, not all legitimate applications will be granted? If the scheme is really to be a success, would not it be better for it not to be cash- limited?
Mr. Heathcoat-Amory : The sum allocated to the scheme is generous. I can confirm that there is no danger of the scheme running out of cash in the near or foreseeable future.
Mr. Morgan : I welcome the question of the hon. Member for Gloucester (Mr. French), which has enabled both him and me to point out to the Minister the Government's hypocrisy in claiming that they are committed to the scheme. Their advertising budget has been spent almost entirely on the privatisation of the electricity distribution and generating companies when it should have been spent on a scheme such as this. Given the sky- rocketing increase in domestic electricity prices this coming year and in the past two years, is not the best investment that any family can make insulation to combat high electricity prices? But insulation is something which the Government have completely neglected.
Mr. Heathcoat-Amory : I reject utterly the hon. Gentleman's remarks. The home energy efficiency scheme has been well publicised and the administering agency in Newcastle has not asked us to provide further advertising or expenditure to promote the scheme as yet. However, we shall monitor the position in the light of further developments.
Coal Imports
4. Mr. Barron : To ask the Secretary of State for Energy if he has any plans to meet the chairmen of National Power and PowerGen to discuss coal imports.
Mr. Wakeham : I meet the chairmen of both companies from time to time to discuss a range of issues.
Mr. Barron : Is the Secretary of State likely to talk about coal imports? It was reported in the press earlier this year that the chairmen of the new generators had said that they wanted to import up to 50 per cent. of the coal that they currently receive from British Coal. Given the devastating effect that that would have in two years when the current
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contract with British Coal runs out, does he have immediate plans to start talking about long-term contracts for an industry which is vital to the nation?Mr. Wakeham : I am surprised that the hon. Gentleman did not give credit to British Coal for obtaining long-term contracts for the first time. The three-year contracts are longer ones than it has ever had before.
The choice of fuel is a commercial matter for the generators. Privatisation opened up the prospect of greater diversification of fuel sourcing. Both National Power and PowerGen have stated that they intend to take advantage of the opportunity. However, I expect British Coal to remain a major supplier to National Power and PowerGen in the years to come, especially if British Coal can maintain its good record of efficiency improvements.
Mr. Andy Stewart : Is my right hon. Friend aware that the recent policy statement from the Labour party on opencast mining threatens the Nottinghamshire miners' jobs and 13 of the 17 collieries which require low- chlorine coal to blend with their products before the power generating companies will buy? Is not that another sign of the Labour party's lukewarm stance on the extension of the Humber ports, which would enable British collieries to import the coal that they need to operate?
Mr. Wakeham : My hon. Friend, with his deep knowledge of the coal industry, makes a good point.
Mr. Barron : The hon. Gentleman has not read the document.
Mr. Wakeham : The Government favour a successful opencast sector. I assure the hon. Gentleman that I have read the document, which Opposition Members have not. If the Opposition set an annual limit on opencast coal output, British Coal's viability would be reduced and job losses would result, in both the opencast sector and deep mines, where opencast output is relied upon for blending.
Mr. Hood : What is the Secretary of State doing about coal dumping in the EC? Is he aware that countries such as America and China are dumping coal at well below the price of production? British Coal has made representations to the Commission, but as yet has had no positive response. I met Sir Leon Brittan in Brussels a fortnight ago and raised the matter with him. He took a Pontius Pilate attitude and said that it had nothing to do with him. I find that strange because he is the Commissioner for competition. Will the Secretary of State assure the House that he does not intend to play Pontius Pilate with regard to coal dumping in the EC? Does he accept that the British coal industry produces coal more cheaply than any other country in Europe? Will he fight the case for British coal in the EC?
Mr. Wakeham : Of course, I should be concerned about any coal dumping, but it is for the European Commission to decide whether to investigate complaints of this nature. There is no evidence of subsidised imports from the main coal-exporting economies. The heavily subsidised exports from the German coal industry account for only about 2 per cent. of coal imports.
Mr. John Marshall : As the world price of coal is somewhat lower than the price charged by British Coal, would not increased coal imports lead to lower electricity
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prices, which would benefit consumers such as pensioners and benefit energy-intensive industry and employment therein?Mr. Wakeham : My hon. Friend is right. If we protected coal from overseas competition, industry would have to pay extra for its electricity and would be less competitive in the world market. That is where real damage to jobs and the balance of payments would occur. But provided that British Coal is competitive, National Power and PowerGen expect it to remain a significant supplier. That will be apparent when the coal contracts are signed.
Offshore Installations
5. Mr. Doran : To ask the Secretary of State for Energy when he last met representatives of offshore trade unions to discuss safety on offshore installations.
The Parliamentary Under-Secretary of State for Energy (Mr. Colin Moynihan) : My right hon. Friend and I met representatives of the Trades Union Congress, together with representatives of a number of trade unions, on 12 February 1991.
Mr. Doran : The Minister will be aware how seriously trade unions take the question of safety, but is he aware that the Scottish Trades Union Congress, with support from offshore unions, has established a training course for health and safety representatives ? Will he encourage oil companies and other offshore employers to use the facilities offered by that course ? We await the ministerial announcement on the transfer of responsibility from the Department of Energy to the Health and Safety Executive and wonder whether the Minister can give us a progress report.
Mr. Moynihan : I welcome any project that involves trade unions in improved training and I wish them well with the projects to which the hon. Gentleman referred. I understand that the Health and Safety Commission will formally consider a proposal regarding the transfer at a meeting tomorrow. I hope that an announcement will be forthcoming shortly thereafter regarding a possible transfer in April.
Mr. Patrick Thompson : Will my hon. Friend confirm that every employee involved in the offshore oil industry should be involved in safety in every possible way ? Will he also confirm that that has been enshrined in recent regulations ?
Mr. Moynihan : I can confirm that. The safety committees are intended to allow for full and active involvement of the work force as an essential formulation for improvements in safety, irrespective of whether the work force is unionised or non-unionised.
Mr. Robert Hughes : Does the Minister recall our recent debate on Piper Alpha and Lord Cullen's report during which many specific instances were given of people being elected to safety committees and then suddenly losing their jobs ? As he promised to investigate allegations of victimisation--and some were made--has he checked them out ? Will he confirm that it would be much better if there were proper trade union representatives to give their backing to safety ?
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Mr. Moynihan : The hon. Gentleman will recall that I promised on that occasion to take up any specific case. That promise remains on the table. I have received no details of specific cases, but I should be only too happy to take up an individual request and respond to it fully.In answer to the hon. Gentleman's first point, Lord Cullen also recommended measures along the lines suggested by the hon. Gentleman that safety representatives should be given protection against unfair dismissal. We agree with that conclusion and we shall implement it accordingly.
Colliery Closures
6. Mr. Hannam : To ask the Secretary of State for Energy how many collieries were closed (a) between 1964 and 1970, (b) between 1970 and 1979, and (c) how many have been closed since 1979.
Mr. Wakeham : According to figures available from British Coal, between 1964 and 1970 there were 263 closures ; between 1970 and 1979 there were 67 closures and since 1979 there have been 132 closures. Those figures do not include colliery mergers.
Mr. Hannam : I thank my right hon. Friend for those figures, which show that under successive Governments the coal industry has been streamlining itself in order to become more competitive. Does he agree that it is vital for British Coal's future that it continues to aim to achieve the right balance between size and productivity and will he continue to support those aims?
Mr. Wakeham : I agree entirely with my hon. Friend. Since 1979, the Government have approved over £7 billion of new investment and made available grant aid of about £17 billion, including the provision of over £6 billion in deficiency grant under the Coal Industry Act 1990. I say with absolute confidence that no Government have ever given more assistance to the coal industry than this Government. We have cleaned up the balance sheet and given it long-term contracts. It has every opportunity to establish itself on a long-term viable basis with the privatised British generators.
Mr. Hardy : Does the Secretary of State agree that many of the collieries that have closed since 1979 did so following substantial and often recent investment about which the Government boasted and Conservative Members supported? Does the right hon. Gentleman also agree that many of the post-1979 closures have meant the locking away of at least a century's worth of Britain's coal reserves while Conservative Members and the Government welcome, and are enthusiastic about, coal imports?
Mr. Wakeham : No one could accuse me or any of my hon. Friends of not wishing British Coal to be a competitive and successful player in the coal business of Britain--and I expect British Coal to remain so. I would not say that every investment that British Coal has made in its history has necessarily been wise. I want wise and profitable investment because I believe in a long-term future for the coal industry. Only if British Coal makes wise and sensible investments will it be able to continue to improve productivity, as it has done so remarkably well in recent years.
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New Housing
8. Mr. Steen : To ask the Secretary of State for Energy what statutory provisions cover consultations between the gas industry and a developer prior to new house building developments.
Mr. Moynihan : There is no statutory requirement for consultation in the relevant gas or planning legislation.
Mr. Steen : As I understand it, the first that a gas company knows of a new housing development is when someone calls and asks to be connected. Does my hon. Friend agree that the right way to proceed is for the gas company to be consulted--just as the National Rivers Authority is consulted--before a new housing development takes place, so that the infrastructure can be in place before new housing is built?
Mr. Moynihan : My hon. Friend has been assiduous in pursuing this matter, not least with my hon. Friend the Parliamentary Under-Secretary of State for Energy on 28 January. It is common practice for developers to consult British Gas before proceeding with their proposals to ensure the adequacy of supply and transmission lines, but we do not believe that it is necessary to superimpose a rigid statutory requirement on the process. My hon. Friend referred to the National Rivers Authority. The requirement for developers to undertake prior consultation with the NRA in certain cases applies only to developments where water contamination problems may occur. I am sure that my hon. Friend would agree that there is no close analogy with gas.
Coal Industry Productivity
10. Mr. Knox : To ask the Secretary of State for Energy what has been the increase in labour productivity in the coal mining industry since 1983-84.
Mr. Heathcoat-Amory : British Coal has increased productivity in its deep mines by more than 85 per cent. since 1983.
Mr. Knox : To what does my hon. Friend attribute British Coal's extraordinary good performance on productivity? How much does he expect productivity to rise in the next five years?
Mr. Heathcoat-Amory : The existence of a Conservative Government has helped the process and British Coal's management and workers have worked together to put behind them the spectre of industrial strife and dislocation that gave the industry a bad name in the past. I cannot predict what will happen in the next five years, but if British Coal continues its impressive improvement in productivity, its future will be bright.
Mr. Lofthouse : How does the Minister think the miners, who have put such massive efforts into increased production, feel now that Mr. Baker, chairman of National Power, says that, whatever British Coal's results, he proposes to import 50 per cent. of his coal? If that comes about, it will add a further £750 million to the balance of payments deficit and put out of action millions of tonnes of our national energy resource. Does the Minister think that that is good practice and does he have no influence on Mr. Baker whatever?
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Mr. Heathcoat-Amory : It would not be in the long-term best interests of the mining industry or British industry generally to keep out imports and try to insulate this country from world trade. The future of the coal mining industry is in the hands of the workers and the management and I am sure that, if they can sustain the productivity improvements, the electricity generating stations will continue to buy substantial quantities of coal from British sources.
Oil Production
11. Mr. Teddy Taylor : To ask the Secretary of State for Energy what is the total amount of oil produced from United Kingdom land and waters in the most recent annual period for which figures are available ; and what he anticipates will be the change in this level of production.
Mr. Moynihan : In 1990 oil production from the United Kingdom continental shelf was 91.6 million tonnes. I expect that by the mid-1990s, output will be significantly higher.
Mr. Taylor : Does that remarkable total mean that Britain is still self-sufficient in oil--that we produce more oil than we consume? Can the Minister give us an estimate of how long he expects Britain's oil reserves to last?
Mr. Moynihan : On the latter point, I believe that those reserves will last well into the next century. On the first question, with the exception of low production in the second quarter, due primarily to safety- related platform shutdowns, oil trade for 1991 is expected to show a significant surplus. I believe that that surplus will continue.
Mrs. Margaret Ewing : Although I welcome the increase in production, has the Minister taken steps to ensure that orders for the modules, jackets and platforms are allocated to British companies? Is he aware that recently two major contracts went to Norway? I represent a constituency which depends greatly on the offshore fabrication yards and I should welcome a clear statement from the Government on their intentions in that respect.
Mr. Moynihan : Only last week I visited Highland Fabricators and McDermotts and I believe that the outstanding contribution that the workers in those yards make to high-quality fabrication will ensure that they have an important role in the future.
There is additional competition coming from mainland Europe, not least because many of the yards are working at capacity with a high level of activity in the market. I assure the hon. Lady that last year, on the most recent figures published, 98 per cent. of orders on the United Kingdom continental shelf for the specific items to which she referred were placed with United Kingdom companies.
Mr. Bowis : Does my hon. Friend accept that the price of oil will justify in the foreseeable future the exploration and drilling in the deeper waters west of the Shetlands ?
Mr. Moynihan : We are extremely pleased with the response to the frontier round, the first of its type, which covers the area to which my hon. Friend referred. I am confident that the interest shown--there have been 13 applications, involving 53 companies--is a reflection of the buoyant prospects that the frontier round presents to the oil and gas sector.
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Mr. Wilson : Will the Minister translate the expected quantities of oil into oil revenue ? Does he accept that many of us believe that the most astonishing feature of the past decade and more has been that the vast revenues to the Government from oil production in the North sea have not been matched by industrial regeneration in many parts of Scotland and the United Kingdom ? Will he accept it from me that under the next Labour Government the income from oil will be spent on regenerating the British economy and not squandered as it has been in the past decade ?
Mr. Moynihan : I totally reject the hon. Gentleman's concluding remarks. Oil revenues undoubtedly have played an important part in industrial regeneration.
The hon. Gentleman will know full well that it is impossible to predict prices for one month, let alone throughout the 1990s. We can, however, create a stable fiscal and regulatory framework that enables companies that work in the North sea to exploit our resources, through the licensing round, given the available opportunities. I am confident that that will lead to growth in an already buoyant sector.
Coal Industry Manpower
12. Mr. Eadie : To ask the Secretary of State for Energy what information he has received regarding contraction of manpower in the coal industry.
Mr. Heathcoat-Amory : Manpower levels within the coal industry are a matter for British Coal. The key factor will be the extent to which the industry can maintain a profitable share of the energy market.
Mr. Eadie : But surely, as has transpired during this Question Time, it is absurd that at the same time as miners are creating record levels of coal production, Mr. Baker has announced that, when the next contracts are agreed, National Power wants to import 50 per cent. of its generating capacity. Does the Minister agree that that policy will mean that there will be more pit closures and thousands of miners will be flung on the scrap heap? Is his answer to the House that all that the Government can do is appoint a new chairman for British Coal at a salary of £250,000 and depend on the privatisation of the coal industry to solve its problems?
Mr. Heathcoat-Amory : We could not isolate ourselves from the world energy market, even if we were allowed to by the rules of GATT and other international treaty obligations. To keep open uneconomic pits would not provide long-term job security for mineworkers. In recent years there have been a number of job losses, but it is to the credit of the industry that they have been achieved without a single compulsory redundancy. Every mine worker wishing to remain in the industry has been offered alternative employment.
Mr. O'Brien : The Minister may believe that this is British Coal's responsibility, but is he aware that a good number of mine workers who have been made redundant because of pit closures are still trying to obtain employment? Men have been thrown out of work because of pit closures, but the Government are idly standing by and doing nothing to offer alternative employment. Is that not the Government's responsibility?
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Mr. Heathcoat-Amory : The Government have not been idly standing by. We support British Coal Enterprise, which has been extremely successful in promoting and finding alternative employment in the areas hit by colliery closures.Independent Generators
13. Mr. Pawsey : To ask the Secretary of State for Energy what is his estimate of the amount of electricity likely to be generated by independent generators by 1995.
Mr. Heathcoat-Amory : Twenty major independent generating schemes have come forward for approval. The eventual total capacity will depend on planning decisions and on the commercial decisions taken by the companies concerned.
Mr. Pawsey : I am grateful to my hon. Friend for that helpful response. Clearly, independent generators are expressing interest in sites in urban areas, such as Rugby in my constituency. Will my hon. Friend suggest to developers that they go to derelict areas rather than green- field sites? Do the planning regulations have sufficient teeth to protect the environment?
Mr. Heathcoat-Amory : My hon. Friend has written to the Department about a planning application in his constituency. I cannot comment on that, save to say that the planning conditions and requirements are as strict as ever and if a local authority objects to a proposed generating site, a public inquiry will be held.
Dr. Reid : Does the Minister share my hope that when approaching independent generators with advice, the Government will do so on the basis of more information and less stupidity than they have shown in the privatisation of the electricity industry? Will the hon. Gentleman confirm from his experience that the sulphur content of Scottish coal used in Scottish generation stations is much lower than that of coal in the rest of the United Kingdom? Will he therefore comment on the extraordinary report in this morning's newspapers that the Scottish electricity industry has been asked to bear the £300 million to £400 million costs of flue gas desulphurisation equipment to extract sulphur from coal with the lowest sulphur content in the United Kingdom? Would not that money be better spent extracting sulphur from coal with the highest sulphur content?
Mr. Heathcoat-Amory : We have a programme to retrofit 8 GW of capacity of coal-powered stations in the rest of the United Kingdom to meet our international obligations to reduce sulphur dioxide emissions.
Mr. Rost : Is my hon. Friend aware that many new power generation schemes are seriously at risk because of British Gas's overnight increase in gas prices of 35 per cent? If my hon. Friend wants genuine competition in the electricity market as against a duopoly, will he ensure that there is proper competition in the gas market by encouraging the oil industry to market gas independently of British Gas?
Mr. Heathcoat-Amory : Gas prices are a matter for discussion between the independent regulator and the firms concerned. I confirm that it is only a short-term problem and in the longer term gas reserves in the North sea and around our coastline will remain high.
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BNFL
16. Mr. Butler : To ask the Secretary of State for Energy if he will make a statement on future prospects for BNFL.
Mr. Heathcoat-Amory : British Nuclear Fuels plc is a profitable and experienced supplier of nuclear fuel cycle services both at home and abroad. The company has a strong order book including business worth some £6,000 million for the first 10 years of operation of its thermal oxide reprocessing plant.
Mr. Butler : Are not BNFL's exports to countries such as Germany a sound indicator of a secure future for the company?
Mr. Heathcoat-Amory : My hon. Friend is quite right. It is to the great credit of BNFL that it has not only secured the first 10 years of operation of that plant, but is on its way to securing the profitability of its second decade.
Mr. Dalyell : Is the Minister aware that my reply to the Daily Star questionnaire on the future of Sellafield was too ribald, rude and vulgar to be repeated in Parliament? What did the Government say to the Daily Star ?
Mr. Heathcoat-Amory : On the information that I have, I believe that the Daily Star article was seriously misleading. I can well believe that the hon. Gentleman's reply was robust as he has been a staunch supporter of the responsible use of civil nuclear power in the past and doubtless will be in the future.
Combined Cycle Gas Technology
17. Mr. Pike : To ask the Secretary of State for Energy whether he has discussed with the Director-General of Ofgas the sale of gas for generation of electricity using combined cycle gas technology.
Mr. Pike : When the Secretary of State met Ofgas, did he discuss the maximum proportion of electricity that should be generated by PowerGen and National Power? If not, does it mean that the Government have no policy on the best use of our energy resources?
Mr. Wakeham : Government policy is to have diverse sources of supply so that, so far as possible, we can move to a point at which they all pay their proper economic cost. Generators can then decide which fuel to use in the best interests of their business.
Mr. Beaumont-Dark : British Gas is increasing its prices because it says that it is losing £250 million due to bad weather. It seems to think that it can insist on doing that when it loses money due to problems of bad weather, good weather or lack of industry. If private industry could have things so easy, it could earn riches beyond the dreams of the Pharoahs. Can we not stop this kind of nonsense in nationalised industries which have become private cornucopias?
Mr. Wakeham : Since becoming privatised, British Gas has a good record of keeping consumer prices down. The role of Ofgas is to be welcomed. There is a supply problem in terms of gas for the generation of electricity, and the company could have become over-committed on previously scheduled prices. I understand that the problem
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relates to 1993-94. I welcome the efforts being made by British Gas and Ofgas to find a solution which offers a positive future for independent gas-fired generation. That is the right way forward and I am hopeful that a solution will be found.Mr. Barron : The 35 per cent. increase in British Gas prices to industrial generators has implications for the long-term supply of gas to domestic users and raises a number of questions. Does the Secretary of State think that it is right for the Government to talk about the need for a diversity of supply and that the matter should be left to the market? We want to know how domestic consumers will be provided with gas in the not- too-distant future if the burning of gas for electricity generation takes off in the way that the right hon. Gentleman wishes.
Mr. Wakeham : As the hon. Gentleman well knows, not much gas will be burnt at prices that are 35 per cent. higher than before. We shall have to see how negotiations proceed. British Gas is not the only source of power station gas. Some projects have already obtained supplies direct from producers, and I hope that others will also do so.
Coal Imports
18. Mr. Lofthouse : To ask the Secretary of State for Energy if he has any plans to meet the chairmen of National Power and PowerGen to discuss coal imports.
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