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Orders of the Day — Electricity Bill

Part of the debate – in the House of Commons at 9:12 pm on 13th December 1988.

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Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change) 9:12 pm, 13th December 1988

I acknowledged that earlier. I am sure that the Secretary of State for "Nuclear" Energy did not miss it.

What the right hon. Gentleman has said is that this is to pay for a nuclear programme. It is to pay for the PWR programme that the CEGB has said in evidence is more expensive than British coal. It is the penalty that consumers will have to pay for the Government's obsession with nuclear power.

As the debate got nearer, the sound of the bugle of retreat was heard louder and louder. We are now led to believe that the nuclear levy is to pay for the nuclear programme. In The Observer on Sunday, the Department of Energy said: the levy would not, as expected, go to subsidise the multi-billion pound construction of a new family of nuclear reactors. A department spokesman said National Power, the new generating company responsible for nuclear energy, will be expected to raise the finance on the market like everybody else. If that is so, why the levy?

We are led to believe that the reason for that decision is, according to the Secretary of State in his speech yesterday to maintain a strong nuclear industry. Yet the British nuclear industry has never been strong, either in security of supply or economics. It is not the diversity of supply that concentrates the minds of industrial and domestic consumers, but security of supply, and it is that which the Bill puts at risk.

The current forecast of demand by the year 2000 is 56·9 GW. Between now and then, over 5,000 MW of coal capacity is to be closed together with over 1,000 MW of oil and nearly 3,000 MW of nuclear power.

It is predicted that necessary capacity for the year 2000 will be between 12 or 15 GW. We are led to believe that nuclear power, if it comes on stream, will provide us with about one third of that need. We have heard from the Association of Independent Electricity Producers that the maximum capacity that could be supplied by private generators would be about 4 GW.

Another option that could be used to meet future demand—I do not know whether it is being considered —is the refurbishment, rather than retirement, of coal-fired power stations. A decision on that should be taken as soon as possible, since a programme of refurbishment would be carried out over years, not overnight.

Opposition Members would welcome the addition to our electricity supplies of the long overdue combined heat and power schemes. Their contribution will of necessity be small. Given that the applications for new generators, which are talked about but never named, are likely to be top-up stations rather than for baseload generation, there must be a major question about whether the short-termism of the newly privatised industry is adequate to ensure the efficient replacement of retiring stations.

Replacing baseload capacity that is being lost involves many "ifs". We cannot risk any shortfall in supply and, therefore, the building of a big coal-fired power station is imperative. That should not be on a green-field site because we have seen the problems at Fawley, but it could be built somewhere like West Burton. That is necessary if the Government are to show that they are concerned about security of supply. It would bridge the gap between the supply and demand forecast and would enable the CEGB to do what it is good at. No matter what its critics have said, it is good at using proven technology to guarantee security of supply in this country, and a new coal-fired power station in the midlands coalfields would be able to do that.

The Secretary of State has a problem in his reluctance to discuss the strategic role to be played by the British coal mining industry. The Government have chosen to ignore a major fuel supplier in electricity generation. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) said in his contribution to yesterday's debate that British Coal's half-year operating profit was £119 million—the best half-yearly figure that it has reported in 20 years. Unfortunately, the press conference and the debate surrounding that result had an atmosphere more like that of a wake than a celebration, and talk by media pundits of a rundown in British coal mining on top of the 10,000 to 20,000 jobs that have already been lost was totally uncalled for—yet it was not contradicted by British Coal or the Secretary of State for Energy.

Instead, we must grow used to indifference and the perpetual stance taken by the Tory Government to the domestic coal mining industry. Of course the Secretary of State speaks of investing large sums of taxpayers' money, to ensure that we have a modern and competitive coal industry. However, the right hon. Gentleman gave evidence to the Select Committee, which commented that such observations avoided the real issue.

The issue is simple. Today, the British coal industry simultaneously faces two major problems: first, the need to establish a new commercial relationship with the electricity supply industry; secondly, the unprecedented low level of international seam coal prices. To ignore them, and to suffer more job losses while having increased dependency on imports, will be of no use to this country.

At the heart of the matter is the Government's involvement in the historic pledge argument. The Secretary of State for Energy made an historic pledge at this year's Conservative party conference. I have some experience of historic pledges, and I say to the right hon. Gentleman that there are few occasions on which they are worth the paper they are written on. In my experience, few historic pledges have ever come true. We shall have to wait to see whether that of the Secretary of State does.

The Select Committee on Energy, with its majority Conservative membership, clearly summed up the Government's attitude in its conclusions. The Select Committee said that it was disturbed at the uneven treatment being given by the Government to coal and nuclear power. The problems of nuclear power have been glossed over, while there has traditionally been emotional hostility towards coal mining. Such hostility does not go back just to my time in the industry but for generations; the Tory party's hostility to it is well known.

It must be difficult for the Secretary of State for Energy to accept that in the last few years the British coal industry has lowered prices by 20 per cent. in real terms, reduced costs by 30 per cent. in real terms, and increased productivity by 75 per cent. in real terms. All that has been done at some economic and social cost to mining communities, with every one of them still having an unhealthy share of the nation's unemployed—very much so. And in his speech yesterday, the right hon. Gentleman said that he did not know the projected likely fossil fuel costs for years to come.

The Electricity Bill is not born out of consumer needs, it does not argue the case for privatisation of the electricity supply, and its claims to introduce competition are fictitious. Most Conservative Members have had to apologise when, having trawled through the Bill, they failed to find where it introduces competition.

In his speech on 12 October to the Tory party conference in Brighton, the Secretary of State claimed that this was the first privatisation to be regionally based. He said: In privatising the area boards, we shall be creating 12 powerful companies, each with its headquarters and decision-making in the region that it serves. He gave the example, and I am pleased that he did, of the Yorkshire electricity board. He said that the decision that governs the quality and price of electricity supply to my home will be made in Yorkshire by Yorkshire men answerable to the people of Yorkshire, and that domination by London will be a thing of the past.

The Secretary of State obviously has plans to move his Department up to Yorkshire. He is obviously going to appoint a director-general and/or agent who comes from Yorkshire and has offices in Leeds, London and Edinburgh. That must be his master plan, because he knows as well as I do that any major decisions on electricity will be made by the Secretary of State for Energy and the director-general. They will decide the price of electricity; they will set the nuclear tax and levy; they will set the costs of transmission; they will issue the licences for generators and supply boards; they will be responsible for security and sufficiency of supply.

As has been pointed out by many hon. Members and highlighted by the hon. Member for Havant (Sir I. Lloyd), Chairman of the Select Committee on Energy, the Secretary of State will be involved in detailed obligations in no few than 67 distinct and separate parts of the Bill. The Bill does not offer consumer choice, but says, "Take it or leave it." It has not satisfied the concerns of industries whose energy costs are a major part of their expenditure. It has not satisfied the needs of consumers, nor has it quelled the doubts of the 55 per cent. of the British public who want the electricity industry to stay in the public sector. We shall speak for them tonight, and vote against the Bill.