HC Deb 19 March 1956 vol 550 cc816-8
26. Mr. Callaghan

asked the Minister of Fuel and Power if he will make a detailed statement on what part of the investment programmes of the coal, gas, and electricity industries are to be reduced, following the recent capital cuts.

Mr. Aubrey Jones

The proposed fixed investment programmes of these industries before the recent revisions and the programmes subsequently approved are as follows:

Coal: Proposed for the calendar year 1956: £112 million. Approved: £107 million. The reduction will affect ancil lary operations at collieries, but not coal production.

Gas: Proposed for the financial year 1956–57: £56 million. Approved: £52 million. The gas boards are still looking at their plans in the light of this reduction, but I think it likely that the reduction will bear primarily on distribution.

Electricity: Proposed for the financial year 1956–57: £204 million. Approved £195 million. Since the proposed programme already represented a curtailment in distribution, this reduction will fall in the main on generation.

Mr. Callaghan

As far as the electricity industry is concerned, is it not rather foolish to cut at the base of our industrial economy? How can we double our standard of life in 25 years if generation is to be cut at this stage?

Mr. Jones

Reductions in investment are always regrettable. On the other hand, one of the alleged advantages of nationalisation is that the nationalised industries are subject to direct control by the Government. Hon. Members ought not, therefore, to complain if the control is exercised on occasion.

Mr. Nabarro

Does my right hon. Friend observe the fact that the reduction in the electricity industry's investment programme amounts to 4½ per cent. only? Has he also observed from his study of the Herbert Committee's Report that very large economies are available in the electricity industry without prejudicing in any way generation of essential electrical current or the distribution of it? Can we have some real economy in these fringe activities?

Mr. Jones

Economy is always desirable. When certain reductions are made they must of necessity be balanced.

Mr. Callaghan

Reverting to the question of the control of nationalised industries, is not the whole point that the control ought to be exercised wisely? The question I put to the Minister is, how can we expect an expansion of our industrial base if he cuts away at the generation of electricity in two or three years' time?

Mr. Jones

I have acknowledged the regrettable nature of all reductions in investment. On the other hand, we have an overloaded economy and certain reductions had to be made. The nationalised industries were clearly amenable to direct control by the Government. Other industries are amenable to such reductions as can be effected through prices and rates of interest.

Mr. Callaghan

How is the Minister ensuring that the nationalised industries are not bearing an unfair share of this cut in capital investment, in view of their importance to the development of our economy?

Mr. Jones

I have already said that it is an aim of mine to ensure that the reductions are balanced.