Nationalised Industries and Local Authorities (Fuels)

Oral Answers to Questions — Ministry of Power – in the House of Commons at 12:00 am on 25th May 1965.

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Photo of Mr Neil Marten Mr Neil Marten , Banbury 12:00 am, 25th May 1965

asked the Minister of Power by what criteria the nationalised industries are to judge whether they use coal or oil.

Photo of Mr Geoffrey Lloyd Mr Geoffrey Lloyd , Sutton Coldfield

asked the Minister of Power what estimate he made of the additional consumption of coal by local authorities as a result of his recently announced short-term measures.

Photo of Mr John Peyton Mr John Peyton , Yeovil

asked the Minister of Power how much of the extra 4 to 7 million tons of coal will be used by the gas and electricity industries, respectively.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

I cannot usefully add to the statement I made on the 12th April and the reply I gave to the hon. Member for Yeovil (Mr. Peyton) on 15th April.

Photo of Mr Neil Marten Mr Neil Marten , Banbury

Does the Minister not agree that that statement on 12th April amounted to grave interference in the duty of nationalised industries to use their commercial judgment? Secondly, is it not in direct conflict with the White Paper on Prices and Incomes?

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

No. I think that I broadly answered this, as I said, in my reply to the hon. Member for Yeovil. Of course, the nationalised industries have a duty to break even on a year-to-year basis, but they also have other duties of a social nature, which were recognised in the former Government's White Paper on the Financial and Economic Obligations of the Nationalised Industries.

Photo of Mr John Peyton Mr John Peyton , Yeovil

The right hon. Gentleman is becoming almost as skilled as his right hon. Friend the Prime Minister at not answering Questions. Will he not recollect that he made this statement, which appeared at the time to be somewhat meaningless, six weeks ago? He has had plenty of time to consult these industries and the House is entitled now to ask him what contributions the gas and electricity industries, respectively, are making to maintaining the consumption of coal at 4 to 7 million tons above what it would otherwise have been? Would he answer?

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

My skill in answering is a direct reflection of the lack of skill of hon. Members opposite in asking. The electricity industry, which, as I have said, is by far the biggest customer of the Coal Board, will naturally make the bigger contribution. Discussions are still going on between the Coal Board and the Central Electricity Generating Board as to the actual amounts, but they are ordering forward and stocking more than would otherwise be the case.

There is also the domestic market. As the hon. Member knows, we are asking local authorities and others to help in this. The degree of success we achieve in the domestic market will represent the difference in the two figures on the cost.

Photo of Mr Geoffrey Lloyd Mr Geoffrey Lloyd , Sutton Coldfield

Has the right hon. Gentleman made any estimate of the effect on the rates of the uneconomic extra consumption of coal by local authorities?

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

No, Sir, I have not.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

Is my right hon. Friend aware that where an installation either of a nationalised industry or of a local authority is operating in an area surrounded by a large number of coal-fields, it makes economic sense in the long term, and is in agreement with the best principles of location of industry, to make use of coal? Will he encourage that policy as much as possible?

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

My hon. Friend is absolutely right. This is an illustration of what I have said, that for many years ahead the electricity industry will increase its demand on coal. If the proper orders for coal were not placed now it may not be able to spend the capital to increase the level of supply.

Photo of Mr John Peyton Mr John Peyton , Yeovil

Do the right hon. Gentleman's answers mean that he is pushing the Central Electricity Generating Board into altering its "merit table" for power stations? If so, will he say whether or not he intends to issue a public instruction or directive?

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

The answer to the first part of the question is "No, Sir."