§ 3.36 p.m.
§ The Paymaster-General (Mr. Reginald Maudling)
I beg to move,That this House takes note of the latest Annual Reports and Statements of Accounts of the Gas and Electricity Industries.This is one of the days which are set aside to considering the Accounts and Annual Reports of the nationalised industries. I think it was a good selection to choose gas and electricity for today's discussion for two reasons: first, because it is three years now almost to the day since we had a discussion of the Annual Reports of those two industries; and, secondly because their Reports have been published fairly recently and, by contrast with some of the discussions we have from time to time on the nationalised industries' Reports, this discussion will be able to take place on the basis of really up-to-date information.
In dealing with this subject I should like to take, in the case of each industry, the latest position as revealed by its Report and its present problems, and, finally, to say one or two things about the general problems of co-ordination of policy relating to fuel and power. I should like to start with the gas industry, because we have had in this House recently a number of discussions about the electricity industry. Those, it is true, were on the question of the organisation of the industry, but as we have so recently and so fully discussed its organisation, and established by Statute a new form of organisation, I do not propose, in this speech, to go into those questions which we have thrashed out so fully in recent months. I would start, therefore, with the gas industry.
Over the last three years, since our last debate, the gas industry has been facing very heavy competition from both electricity and from oil, and competition in varying degrees in the domestic market and the industrial market. As a result, I think that the general picture of the gas industry in the last three years is one of growing demand from the industrial and commercial sector rather more than offset by a falling demand in the domestic sector. Therefore, over the whole picture of the gas industry, there has been a slight decline in demand, though I am glad to 997 say that experience in recent months has shown a small up-turn in the total demand.
By and large, in the face of this heavy competition from oil, electricity and solid fuels, the gas industry has been having a difficult time. It is much to the credit of those concerned that, nevertheless, they have been able, in the latest Annual Report, to show a surplus of £3.8 million. There can be no question that their present possession of a useful surplus represents an increase in the efficiency of the industry in the last few years.
I should like to quote three examples of the way in which efficiency has increased. First, the number of units in the industry has been reduced from 1,050 at vesting day to 611 at present. Clearly, in this industry, as in so many others, a reduction in the total number of productive units should lead to greater productive efficiency. Secondly, if one estimates productive efficiency on a thermal basis, the industry has now achieved a level of 77.8 per cent., which I learn from those who understand these things much better than I do, is about as high a level of thermal efficiency as one can reasonably expect to reach.
The price of gas since 1950 has risen by 47 per cent. The price of coke and by-products has risen by 78 per cent. At the same time, coal and manual labour costs have risen 65 per cent. If we take these three figures together, and recognise that two-thirds of the sales of the gas industry take the form of gas and that coke and other by-products are a minor proportion of total sales, it will be found that the total price structure has risen a good deal less than the price levels of the main constituents of its costs—coal and manual labour.
That, generally, is as good a criterion as one could apply to the progressive development of the efficiency of the industry. Summing up the performance of the gas industry, in the last three years, in the face of growing competition it has maintained its sales by being more efficient. That, after all, is what we in the House expect it to do.
I turn for a while to the present problems of the gas industry which, I think, depend on two factors. First, there is the growing competition of electricity and oil, to which I have already referred, and, secondly, there is the fact that good 998 quality coking coal is becoming scarcer and more expensive. When one adds those two factors together it seems quite clear that the gas industry must concentrate upon more efficient means of production, particularly on methods of using lower-grade, cheaper coal, and on more efficient distribution, particularly on solving the very awkward and growing problem of the load factor about which we hear a great deal in relation to electricity but which is equally important to the gas industry.
I should like to explain to the House some of the ways in which the industry is tackling this basic problem of producing gas from other raw materials. It is a good story. The efficiency of the gas industry is indicated by how much it is doing to try to develop the latest technological processes. As I have said, good quality coking coal is becoming scarcer and dearer and we must look for other sources from which to produce gas. Clearly, the first source and the most valuable to exploit from the national point of view is lower-grade cheaper coal. A great deal of work is being done on that. There are two processes of complete gasification which the Gas Council has in mind. First, there is the so-called Lurgi process which has been used and of which there has been a good deal of experience on the Continent. Two plants in this country are planned to use it, one in Scotland and one in the West Midlands.
There are considerable prospects of valuable developments in this field. The only trouble is that although there is a good deal of experience of this process abroad, it is rather selective as to the grades of coal used and we have not yet been fully able to prove the process with the various grades of coal that may be available in this country. Secondly, the gas produced by the Lurgi process is of relatively low calorific value.
There is a second process, the hydrogenation process on which the gas industry is doing a great deal of research. The North Western Board is starting with the hydrogenation of oil and will then go on to coal. If the Board is successful, the process will be of importance to the fuel balance of the country because it should be able to produce good quality gas from a wide range of comparatively low quality cheap-priced coal.
999 These two processes of complete gasification of low-grade coals are promising, but we need a good deal more experience of them, and in many cases the plants involved are very large and the processes might lead to considerable changes in the transmission and distribution of gas which would involve considerable capital expenditure. In the long run, hydrogenation may be a better prospect than the Lurgi process but, in either case, complete gasification of these coals produces no coke and although, at the moment, there is a surplus and a great deal of coke is available. However, in the long run, with the development of the clean air policy, there will be much demand for coke which the gas industry will have to do a great deal to meet.
Another source of gas is oil, and there are two sources which the gas industry is considering. There is the use of surplus products from the refineries. Much has been done in the most enterprising way to make use for the production of gas of the various products of the refineries which, from time to time, become surplus. Thereby, we can obtain energy from fuel which otherwise would be merely wasted.
Secondly, there is the ability to produce gas from imported oil. In a way, that is unattractive because imported oil has to be paid for across the exchanges and therefore adds to our balance of payments problem. But the use of imported oil to produce gas is very valuable in dealing with the question of the peak load and the fluctuating load, because gas-from-oil plants are much more flexible than plants which produce gas from coal.
The boards are proceeding with research to try to find natural gas in this country. It is fair to say that, so far, the results, though interesting, have not produced anything of great commercial value. There is an interesting development in Scotland but, beyond that, nothing of large-scale commercial value has yet been proved, though research is proceeding, as I am sure the House would wish it to do.
There is another possibility in the importation of methane in liquid form, which the Gas Council and the North Thames Gas Board have been studying very closely. It is possible to import 1000 methane at very low temperatures in highly concentrated form and then turn it into gas in this country. This bold experiment is much to be welcomed, because it could produce supplies of good gas at a very low price and thereby add considerably to a solution of the energy problem in this country though, of course, it could apply over only a relatively limited sector of the total demand.
Another possible source of gas is coke-oven gas. Purchases of coke-oven gas by the gas industry are rising. Last year's Report shows that they were 11 per cent. up on the preceding year. There seems to be a general view that more can be done in the way of releasing the rich coke-oven gas for burning in the ordinary gas distribution system, and replacing that in the coke ovens either by producer gas or by blast furnace gas. The industry is studying that possibility closely at the moment.
There should be a steady increase in the total amount of coke-oven gas absorbed by the gas industry as the steel industry's output increases, but one cannot expect anything dramatic from this. There is a steady, but not a dramatic, increase. Ironically enough, one of the problems lies in the supply of gas from the coke ovens being too regular for the gas industry, because the supply from the coke ovens is fairly regular over a long period, whereas the industry is facing the problem of peaks and slumps in demand.
With the new processes, however, such as the Ruhrgas Slagging Producer, it is hoped to make available these gases for firing coke ovens, and so release rich coke-oven gases for the general distribution system on a basis which can fit in more closely with the present system and with the fluctuating demand for gas throughout the country.
Another thing which the gas industry is doing is to co-operate with the National Coal Board in using methane drained from the pits. There is an interesting development in this respect in that production is going on at Point of Ayr, in North Wales. Here again, although nothing dramatic can be expected, useful new sources of gas at a competitive price can be looked for from products which otherwise would not be utilised in meeting the general national demand for energy.
1001 As the House will be aware, experiments are being conducted on underground gasification. At present, the quality of gas so produced is such that it cannot be transported and has to be used on the spot. At first it will probably be used mainly for generating electricity locally, though in the future, with technical advances, possibly better gases with wider use can be produced.
I have been into the problems of gas production and I should add that the gas industry is also studying the problem of the long-distance transmission of gas. In the electricity industry we have seen the dramatic economies that can be realised by transmitting current over a large area, and with gas, also, there should be considerable possibilities of achieving economies by large-scale, long-distance transmission of gas if the technical problems can be solved. Those technical and economic problems are now being studied closely by the gas industry.
The industry is also looking into any possible methods of the storage of gas to meet the problem of the peak and the slump loads, and is also looking into underground storage as a way of meeting the fluctuation in the level of demand.
The value of this general picture of the experiments that the industry is making is that it shows the extraordinary technical ingenuity and the fertility of mind in the gas industry. The industry is facing great difficulties. In many ways its competitors have monopoly positions which the gas industry cannot expect. For instance, electricity has a monopoly of lighting and oil has a monopoly of traction.
The gas industry has to fight for its existence. It is doing so, and the fact that it is pursuing so many new and interesting possibilities of providing energy shows that competition is producing in the gas industry a healthy position. To the extent to which it can, by experiment and research, find new ways of producing energy on an economic basis, it is clearly contributing a great deal to the solution of the basic energy problem of the country.
Now I turn to the electricity industry. In the case of gas we have been looking at an industry facing strong competition, fighting to maintain its position, and doing so extremely well. The electricity industry has a rapidly increasing demand, and its problem basically is more to find 1002 the capital required to finance the installations needed to meet that demand than to sell its product.
During the last few years there has been a continued and rapid expansion in the sale of electricity. There was a slight slackening, perhaps, last year, comparatively speaking, but last summer the demand for electricity appeared again with renewed strength. It is interesting that last summer the demand for gas and electricity was relatively buoyant, whereas the demand for solid fuel was not. That may be partly attributable to the fact that the recovery in production has been largely concentrated on those industries which use gas and electricity more than solid fuel. By and large, the demand for electricity continues to expand at its traditional high rate. Last year, the total sales of electricity were up by 6.7 per cent., and within that total it is interesting to note that sales to farms were up by 18 per cent. That is a very rapid expansion in the consumption of electricity on our farms, which I am sure we all welcome.
Turning to costs, the average cost of electricity sold by the Central Electricity Authority was 4.7 per cent. up on the year before. Since 1948, the cost of fuel has risen by 55 per cent. and the revenue obtained per unit sold has risen by only 26 per cent.
§ Mr. Gerald Nabarro (Kidderminster)
May we be quite clear to what those figures relate? Do they relate to the Central Electricity Authority, and do they include or exclude the Scottish boards? Specifically, do they include the North of Scotland Hydro-Electric Board?
§ Mr. Maudling
I am referring to the Report of the Central Electricity Authority and my hon. Friend will find these figures in the Report when he reads it.
The figures I have given reflect a general improvement in the efficiency of electricity generation and distribution. It is difficult to ascertain whether the increase in efficiency was as great as could have been obtained, or was not as great as could have been obtained, because it is impossible to assess these things in the absence of competition.
What the Herbert Committee said on this matter was very valuable and very balanced. The more one looks at the 1003 figures, the more I think it is true to say that, in turning its raw material into energy in the form of electricity, the electricity authorities have progressively increased the efficiency of their plant, and their final price to the consumer has not by any means reflected in full the rising costs of the raw materials of all forms which they have been using. Of course, their main cost is the raw material which they obtain from the National Coal Board.
I think I should say a word or two about the progress of rural electrification. In the year 1956–57 over 13,000 farms were connected with electricity. There is at present a falling off in the rate of connection, as one would expect, because it is normal to connect the nearer farms first, and the more remote ones are obviously more expensive and more difficult to connect. It is interesting to note, however, that the five-year programme undertaken in 1953, to ensure that 70 per cent. of the farms in the country were connected with electricity, was reached by September of this year instead of March next year. That is an interesting comment on the progress of rural electrification under a Conservative Government.
§ Mr. Arthur Palmer (Cleveland)
The right hon. Gentleman will not overlook the fact that the Conservative Party voted against the nationalisation Act?
§ Mr. F. H. Hayman (Falmouth and Camborne)
Would the Minister comment on the high interest rates which are now slowing down the development of rural electrification?
§ Mr. Maudling
I will talk about the capital programme in a moment. I had observed what the hon. Gentleman the Member for Cleveland (Mr. Palmer) said yesterday at Question Time about rural electrification, so I thought it was right to point out that, despite the allegation that we were careless about rural electrification, in fact, under a Conservative Government, there has been considerable progress. That is a fair point to make.
§ Mr. Maudling
The chief recent development in the industry has been the reorganisation which was established by the Act passed last Session. It would be 1004 redundant to talk about that at this stage, because we talked at great length about that reorganisation and we have still to see what, in practice, will be its effects. I shall not refer to that nor shall I refer to our views of the personalities of the Authority and our hopes of the Electricity Council and the Generating Board, high as they are in either case.
The problems of the electricity industry are different from those of the gas industry in many ways. The industry's first problem is that of the raw material from which to make electricity: to what extent should it rely on coal and to what extent on oil? This problem will be particularly important in the early 1960s. It is very hard to be certain about this, because we can make calculations based on production and demand forecasts, but a mistake of 1 per cent. or 2 per cent. in either forecast may make a big difference in the results. We should, therefore, be wise to plan on the safe side. If our only embarrassment in the 1960s is a surplus of energy we shall be very lucky. We should, therefore, be wise to plan on the safe side.
As my hon. and learned Friend said in answer to a Question yesterday, we have recently made new decisions about oil and coal firing which will lead to a reduction in the amount of oil to be used and an increase in the consumption of electricity-coal of about 2½ million to 3 million tons a year in the 1960s. That is quite a big change. The question is sometimes asked whether we should go further. I think that the hon. Member for Cleveland asked it yesterday.
First, I should point out that we made these contracts with the oil industry—or rather, I should emphasise, the industry made these contracts—at a time when the industry very much needed these supplies of energy. It would be wrong for the industry to contract out of them and it would not dream of doing so, although it is right to say that the oil industry has been very helpful in all these matters.
Secondly, I do not believe that we should be wise to permit ourselves to be misled by the present abundance of small coal into thinking that that situation will necessarily continue, because there have been a number of exceptional factors, for example, the level of industrial production and the level of temperature. A cold winter and a rapid increase 1005 in industrial production could soon make those stocks of small coal disappear.
When we look at the reduction which was announced yesterday, of 2½ million to 3 million tons a year of coal equivalent in the consumption of oil, when we look at the rephasing of the nuclear power programme, with which I will deal in a moment, which will increase the consumption of coal for electricity generation, and when we look at the fact that the National Coal Board is determined to increase the proportion of large coal in its output, I think it will be agreed that it would be wrong to assume that there will be an embarrassing surplus of small coal in the 1960s.
It would, therefore, be wrong on supply grounds alone to suggest that we should suggest a further reduction in the contracts which have been made for the supply of oil to the power stations. As far as we can see, with the sort of increase in production which we want and to which we can look forward, with the sort of increase in consumption which we can expect, and with the other factors which I have already mentioned all taken into account, we should still be able to provide a good market in this country for all the small coals of electricity qualities which are produced by the Coal Board.
As I said earlier, when discussing the gas industry, we are investigating in this country many ways of finding other uses for small coal. As hon. Members on both sides of the House have urged, we should regard coal not merely as a source of energy, but also as a source of chemicals. If it were to be said that we were planning to have too much coal available, that is a criticism which I should be very happy to have hurled at me.
The next problem of the electricity industry is the capital cost of developing the generating programme, particularly the nuclear generating programme. As the House knows, my right hon. Friend the Chancellor of the Exchequer has made it clear that the Government intend to maintain the general level of public capital investment at its present level for the next three years. Within that, of course, there will be differences. The effect on the electricity industry as a whole is not that the level of investment will fall, nor that the level of investment will continue on its present rising curve. 1006 The level of investment in electricity as a whole will continue to rise, but it will rise at a lower rate than was previously planned. That is the position. There is to be no cut in the level of investment in electricity generation, but there is to be a slowing down of the present rising curve.
We have been asked what is the position about the nuclear programme. The four stations on which we are now working—Bradwell, Berkeley, Hinkley Point and Hunterston—will go on as planned. There will be some delay in the starting of the later stations in the programme, and the net effect that we envisage on the nuclear power programme is that the targets at which we were aiming, and of which the House is aware, will be achieved one year later than we had announced earlier this year. In other words, the nuclear programme is not reduced in size, but is spread over a period one year longer in its total operation.
I should like to say a few words about the safety of the nuclear power stations, because there is much public interest in this as a result of the Windscale episode. I believe that it is very important to stress the differences between the Windscale pile and the installations which will be provided in the nuclear power stations.
As I am advised, there are three main differences. First, the electricity power stations will be operating at much higher temperatures and, therefore, it will not be necessary so often to carry out the Wigner release which was the source of the trouble at Windscale. That will not happen so often. Secondly, they will work with carbon dioxide as a coolant instead of air, which means that the chemical possibilities of trouble are far less. Thirdly, the power stations' coolant will be working within a closed circuit and will not be open to the air, as was the case at Windscale.
For all those reasons it seems clear that an accident of the type which took place at Windscale could not occur in the power stations being built for the Central Electricity Authority and could not occur in the power stations which our industry is offering for sale to customers abroad. The latter is a particularly important point which we should bring out in the House.
§ Mr. Philip Noel-Baker (Derby, South)
Is it not a fact that at Windscale they were making tritium, which is a very dangerous process, and that they would not be doing this in the commercial electricity stations?
§ Mr. Maudling
I think that the Prime Minister, in his statement, made it quite clear that what was happening at Windscale was not in accordance with an exceptional experiment, but was in accordance with a normal, routine maintenance operation. The right hon. Gentleman will find that in the White Paper if he cares to study it.
I am sure that all hon. Members have a particular interest in this question of safety. As I have said, there are technical reasons why the accident which happened at Windscale could not be repeated in the power stations for the Authorities, but any lessons to be learned from Sir William Penney's committee and the subsequent committee of investigation will certainly be applied.
A reactor safety committee has been established, on which Lloyd's and the British insurance industry are represented, and a formal safety code for the design and operation of nuclear power stations is being prepared. I can assure the House that the greatest possible attention is being paid to these questions of safety, as I think is shown by the Windscale Report, read in the light in which all of us have read it.
One other point about the nuclear power programme concerns the question of siting, which, of course, gives rise to a great deal of heartburning and doubts in many parts of the country. As the House is aware, the sites available for nuclear power stations are very few, because the technical limitations are considerable. The ground must be such as to be able to bear the very heavy weight of the reactors. Adequate cooling water must be available. For these and other reasons there are very few sites available.
If one looks at a map prepared by the Central Electricity Authority, as I had the opportunity to do a few months ago, and sees the places which are ruled out for this, that and the other reason—being built-up areas and other reasons such as that—one sees that the sites available are extremely few.
I have seen it argued in the Manchester Guardian—I think that the hon. Member 1008 for Newcastle-upon-Tyne, East (Mr. Blenkinsop) put a Question on this point recently—that we should not site any power stations until we have examined all possible sites in the United Kingdom. The argument is that if this is not done we might fix the site of a power station when there was a better place hundreds of miles away. I agree that that is a very good statement of the ideal which we should like to achieve if we could, but the fact is that we cannot do that. The survey of sites for nuclear power stations is an immensely complicated technical process, taking many months and involving very skilled people.
There are just not sufficient people to enable us to survey every possible site in the United Kingdom before the Authority embarks on building a particular power station. Therefore, if the whole of the United Kingdom cannot be surveyed in advance, the right thing to do, and what the Authority does, is to decide the general area in which it is necessary to have a power station for reasons of demand, and so on, and then to survey all possible sites in that area.
Having seen something of the care taken by the Authority in these matters, and having seen the Authority exhaustively examine an enormous number of sites in any given area before reaching its choice—of course, in consultation with the local planning authorities—although we should be very glad to have suggestions or advice on the matter, I do not think that any better system for preserving amenities while achieving the necessary nuclear development can be devised.
§ Mr. Hayman
Would one of the factors which the Authority takes into consideration be the possibility of a coal-fired station becoming redundant?
§ Mr. Maudling
Most certainly. What the Authority considers is the demand for electricity and the likely sources of supply. If a coal-fired station is to become redundant, energy will have to be gained from another source for that area.
The question of transmission lines is raised by the nuclear programme and it is probably true that as much if not more damage is done to amenities by transmission lines from generating stations than by the generating stations themselves. On the other hand, the development of nuclear power closer to areas of 1009 consumption in the South of England is enabling the Authority to dispense with transmission lines from Midland power stations to the South which would otherwise have had to be installed and which might have done considerable damage to amenities. While we lose in the transmission lines from the new stations to areas of consumption, we gain by avoiding the need to transmit power right from the Midlands to the South of England.
I have very briefly referred to the general picture of the two industries and to the main problems which they are now facing. It would be difficult to go into more detail without going into a great more detail, because there are so many matters which right hon. and hon. Members on both sides of the House wish to raise and with which my hon. and learned Friend will deal when he winds up the debate.
I now want to refer to the co-ordination of the two industries. Both are processors of primary fuel. They are interchangeable in some things and not in others. There are some functions which gas performs better than electricity, and some things which electricity does better than gas. In one way or another both compete with solid fuel and with oil.
The object of any fuel policy must be to reach a point at which both gas and electricity contribute to the national energy consumption that portion which is most economic and most efficient. That is a statement of the obvious, but one should start with that statement of principle. How do we achieve that? We cannot do it by detailed planning. It is very tempting for one sitting in one's office in Whitehall to think that one knows best—as has been said in the past in another context. It is tempting to say that electricity should do this and gas should do that.
However, the detailed considerations become too complex for any central direction to be able to achieve effective detailed results. Moreover, it is very important in this as in so many other matters to give the maximum freedom of choice to the consumer. We therefore believe that the basis of co-ordination must be competitive, as the Ridley Committee itself pointed out. On the other hand, competition alone, without any sort of Government guidance, is not adequate for our problems.
1010 There are two reasons why the Government must take a hand in these matters. The first is the balance of payments problem. An industry might find ways of making its product more competitive in the home market at the cost of a considerable additional burden on the balance of payments. What might suit the industry might not suit the economy and therefore, the Government must take a hand in that. Secondly, the Government must take a hand, and by statute it has an obligation to take a hand, in the settling of the capital programmes. In considering the capital programmes of these industries my noble Friend must be concerned to avoid any element of duplication which can be avoided.
In all these things it is very difficult to tell where competition ends and duplication starts. It is very difficult to lay down any hard and fast rule about the point at which competition between the two industries shall cease. In fuel and power matters we have a great example of the efficacy of competition. I referred earlier to many developments in the gas industry and to the efficiency and enterprise of that industry, which says a great deal for the severe competition which it has had to face.
We think that competition must continue to be the basic principle of the co-ordination of our fuel policy, but it must be competition with a good deal of Government guidance, for which the Statute provides. The Ridley Committee considered this matter at great length and produced a Report of great value. Since then we have had the Report of the Herbert Committee on the Electricity Industry. Circumstances change much in this industry and it may well be that a case will arise in the not too distant future for a similar inquiry into the economics of the gas industry. If that should happen, perhaps we can look into questions of the co-ordination of the two industries—it is unwise to be dogmatic in these matters.
People sometimes say that it is wrong to have gas and electricity competing for supplying a service for the same house when the house could be run on an all-electricity basis. On the abstract basis of the economist, it is probably true that it is wasteful to have competition between two sets of mains running into the same house. On the other hand, it is clear that competition has been of very great 1011 value. It is not easy to decide from Whitehall at what point competition becomes wasteful and ceases to be what it ought to be, a spur to the efficiency of those industries. We ought to recognise that the industries have been enabled to expand because of their competition, with a degree of co-ordination and guidance provided by the Minister.
I have endeavoured to run over the recent performances of the two industries and to explain the major problems in which they are involved. To a large extent they are competing with one another and jointly competing against solid fuel and oil. Both industries are making a considerable contribution to our national well-being and, as I said in opening the debate, it is very timely that after a gap of three years we should have another opportunity to discuss these matters.
§ 4.17 p.m.
§ Mr. Alfred Robens (Blyth)
Since the right hon. Gentleman became Paymaster-General, I have listened to every one of his speeches in the House with considerable enjoyment and appreciation and with far more agreement than those of his hon. Friends who sit behind him. The single exception to that has been when he has been borrowed by the Treasury, and has had to speak in an economic debate, but we certainly do not quarrel with him for his speeches about fuel and power, for which he has House of Commons responsibility.
The most interesting part of the right hon. Gentleman's speech was his reference to the improved efficiencies of the gas and electricity industries. He said that almost twelve months before the target date a five-year programme for connecting 70 per cent. of the farms in the country to an electricity supply had been achieved. That was a tribute to the industry and to those who have helped in connecting farms to electricity supplies.
For hon. Members on this side of the House it is interesting to recall that many years ago Labour spokesmen said what it would be possible to achieve under public ownership. The right hon. Gentleman and his right hon. Friends disagreed with us, but the justification for our arguments came in what was said this afternoon by the right hon. Gentleman, 1012 a member not of our party, but of the Government.
§ Mr. Maudling
I did make it clear that one of the difficulties of a monopoly was that although one could give praise when there had been progress, one could never prove that greater progress would not have been achieved by other methods.
§ Mr. Robens
Certainly, that is what the right hon. Gentleman said and we recognise that if he had not said it he would probably have been in serious trouble with some of his hon. Friends. That is why we forgive him that kind of statement which he knows to be a quick debating trick to placate his own supporters.
The truth is that we can look at both industries, broken up as they were under municipal and private ownership, and say, as the right hon. Gentleman knows, that it would have been quite impossible to have reached the stage of efficiency and to have done so much in the national interest if they had remained separate industrial units. It was because there was co-ordination that this has been made possible. We can compare British strides forward in these two industries with those in other countries, and show up very well. In any period of ten years prior to public ownership we can see what progress was made. But we are not arguing the merits of public ownership, but the Reports of these two industries.
I would like to refer to the comments of the right hon. Gentleman before I go to the points I wish to raise. He said that he believes that the best way to keep both industries on their toes, so to speak, is to have consumer freedom of choice and healthy competition. Broadly speaking, I agree with him. At the same time, I think he would recognise that he would not advocate, nor would he want to see, the two industries competing against each other in, say, lighting. I think that that has been accepted by the gas industry, and it may well be, as we move on, that there are other respects in which one industry or the other ought to have priority in the national interest. I want to say something more about that later.
We would agree with the right hon. Gentleman that the oil contracts entered into must be observed. It would be quite wrong if we tried to get out of contracts 1013 that have been honourably entered into. It would cause tremendous embarrassment to all concerned because of the slight change in the fuel position when the industries were taken over. At the same time, it is true to say that the power stations which are now using oil are dual-firing stations. It is technically possible to switch these power stations back to solid fuel firing should it be desired. It is possible, is it not, to have some flexibility as the supplies of either oil or coal change if we have dual-fired stations?
I shall say something about nuclear energy power stations, but it is better, I think, first to say something about these two industries and also comment on the remarks made by the right hon. Gentleman, a full note of which I have taken. There was one other indication of efficiency in the gas industry which the right hon. Gentleman omitted, not because he had not the figure, but probably because he had not put it in his notes. That was the very big reduction in staff employed by the gas industry. There has been this tremendous increase in output with 9,000 fewer people employed in the industry. That is a tremendous figure. If one could have that sort of reduction in other industries there would not be the productivity problem which the Government are now experiencing.
There is another very interesting figure which further illustrates the industry's efficiency. Had costs of raw materials remained as at May, 1949, the cost to the consumer today would have been 1½d. per therm less than it is. That, again, is a remarkable achievement. If these two points are added to those enumerated by the right hon. Gentleman, I do not think that anyone could claim that the gas industry has been inefficient in the way it has used its new powers under public ownership to be of real service to the nation.
The right hon. Gentleman referred obliquely to the gas grids. I think that all of us who have studied this matter observed with tremendous interest what has happened in the various area boards. They have laid down thousands of miles of pipe, closed uneconomic undertakings and built up gas grids within their respective areas. What are the Government advising the Gas Council to do 1014 about joining the area gas grids to a national grid? The right hon. Gentleman referred to the advantage of the two systems, high voltage and lower voltage, which the Electricity Authority has.
The right hon. Gentleman referred to a number of ways in which it is proposed to make gas in future. It is important that any gas produced from a new source should be made available over the whole area if possible. That can be done only by a national gas grid, which means connecting up the various area board gas grids. I do not know what the legal position is about that. I am not certain whether the area gas boards must remain within their areas, or whether they are able to connect up, by agreement, one with the other.
Someone must take a decision at some point and it will probably be the responsibility of the Gas Council to advise area boards to work out plans and schemes for connecting up their various gas grids so that if there is a development on the liquefied methane that is to be brought, it ought to be put in at the nearest port, so to speak, and then the gas resulting would be available throughout the whole network. Otherwise, we would have too much gas in a particular area and have a very expensive bill to meet to take it. The right hon. Gentleman might consider whether or not it is possible to take the necessary steps to ensure that the area grids are joined up and so make a national gas grid.
The right hon. Gentleman said that the Gas Council and the gas boards were very concerned about the shortage of the particular coals they like for their undertakings. This has been a constant problem to them. As time goes by, and the amount of small coal which is, perhaps, of a much lower grade, increases, their problems will increase at the same time. He said that new methods were being investigated, such as gas from oil and waste gas from the refineries which we call the tail gas methane gained from the coal mines' natural gas.
Then there was this last one, the liquefied petroleum gas to meet peak loads. I ask the right hon. Gentleman: is it worth it? As I understand, an investigation is now taking place by the Gas Council into the possibility of importing into Britain in liquid form supplies of 1015 natural gas, presumably from the United States or Canada, or from some part of the Western world, where that natural gas is being burnt to waste. The fact that it is being burnt to waste in places where there are vast supplies indicates that if we want to buy it we can get it very cheaply indeed. It would not be the first time that a waste product for which there was a sudden demand because of somebody's ingenuity became a high-priced product. I do not believe that anybody in this country can say whether or not the price at which natural gas waste product in liquid form is available to us would remain at the economic price it may be at the moment to justify the tremendous cost of importing it.
I wonder, too, whether the right hon. Gentleman is permitting the Gas Council to go on with this idea irrespective of the impact on the national interest? It is very obvious that we can produce gas from all kinds of things—even from the waste products of rotting vegetation. If we go about it scientifically there is no great problem in producing gas, but for us as a nation it must be a question of producing it economically. Otherwise, although it may be a very interesting scientific experiment, it is not worth anything to the nation. I am, therefore, a little bothered about the suggested importation of liquid methane.
If there are any scientists present, they can correct me if I am wrong, but I am told, and I accept, that to liquefy natural gas it has to be brought down to a temperature of about minus 250 degrees Fahrenheit, and that if that liquid gas were put in an ordinary steel tank it would go right through the bottom of it. One of our big tasks is to find a container to hold liquid gas at this temperature, and if we are to bring it across from the United States of America we have to build a tanker specially for this task.
It is very easy to talk about bringing liquid gas from the United States, but we must remember that special steels will be needed. The ship would have to be constructed not only with special metals, so as to contain the liquid gas, but would also have to be able to withstand the stress and strain of Atlantic voyages in all sorts of weather. I understand that the first cargo will be about 3,500 tons. 1016 Who will make the tanker to bring it across? Will it be a British job? Or will it be an American job? This is a very important matter nationally, and I ask the right hon. Gentleman whether it is a worthwhile project. I am open minded—I do not know.
On the face of it, I should have thought that if all the resources of the Gas Council and of the gas boards were directed to the gasification of our indigenous coal we should be using our scientific skill, and our money, to much better purpose than in trying this liquefied gas experiment. This is a luxury experiment. It is fraught with great dangers. I do not believe that its economics have been worked out, or that anyone is in a position—and I ask the right hon. Gentleman to tell us, if it is so to say what the price of the gas now being burned to waste in the United States would be if we built part of the industry on it—
§ Mr. Maudling
My hon. and learned Friend will later deal with this matter, but may I say now that this is not a project? It is an experiment, the economics of which have been worked out with great care, and the points to which the right hon. Gentleman refers have been taken into account. I make it clear that this is an experiment, not a project, and if it comes off we will produce gas at a remarkably low price.
§ Mr. Robens
I hope that the right hon. Gentleman will look at the strategic position, and the fact that dollars are involved. While it is true that, given the right price for the liquefied gas, we can produce at a very low cost, I am told that there is so much waste gas in the world that we could, in fact, do without any coal supplies at all and produce our gas from this source alone, but that would not be in the national interest.
It is all very well for the right hon. Gentleman to shake his head, but if we permit the Gas Council to go ahead with this without regard to all the other aspects involved, it is entitled to say that the task is to produce cheap gas, irrespective of the effects on the coal industry or anything else. The Council could go full steam ahead in that direction, and I ask the Government: have they looked at all the things involved?
I criticise that as a purely luxury experiment, but my main criticism about the 1017 gas industry is that it has been so slow in its progress towards the complete gasification of our indigenous coal. This is scandalous, because the industry has been experimenting for years. I saw these experiments on complete gasification years ago in the laboratory. The Germans have been for about thirty years using the process to which the Paymaster-General has referred. It is really a little late in the day for the Gas Council now to say that it is beginning to build pilot plants. It should have done that a long time ago, and should now be much further ahead.
I urge the right hon. Gentleman to make it plain to the Gas Council that while it may be possible to indulge in this luxury experiment, which may give a lot of interesting information, the Council's main task is to make gas from British coal. If the coal is of bad quality, or if it gets worse because of continual mining operations, then its continuing scientific task is to use its knowledge to go on producing gas from coal from this land. That is important, and I hope that he will address the Gas Council on such lines.
I now turn to what has been said by the Paymaster-General about the electricity industry. Before I pass to the main part of my remarks, I think that it would be most appropriate to pay a tribute to Lord Citrine who, at the end of this year, will resign his office as Chairman of the Authority and will, I understand, become a part-time member of the new Council.
I suppose that Lord Citrine had one of the most difficult tasks in the world to perform. It is not easy to have to translate a political decision into practical terms. It is not easy to become the head of such a vast and rapidly-growing industry as the electricity industry is, to take over all the undertakings and to bring some order into the industry.
I believe that his driving force, and particularly his expert technical knowledge of the industry, together with his tremendous experience in the field of human relations, have probably made him the best man for that post for the years during which he has held it. The amazingly good labour relations that have been built up, the wealth of committees and the consultation that takes place throughout that industry, will remain a lasting tribute to the work 1018 of Lord Citrine, and I am sure that all in this House would say to him at the end of the year, "Well done, and a happy retirement."
One of the great problems of the electricity industry, as revealed by the figures, is that of load factor. In 1950–51, it was 47.03 per cent., and in 1956–57 it was 43.26 per cent. That is extremely serious because, while there is not very much in those figures, behind them lie hundreds of thousands of pounds of capital lying idle for too many hours in the day—
§ Mr. Nabarro
Would the right hon. Gentleman agree that a 1 per cent. fall in the load factor of the electricity generating system means that £21 million of valuable capital equipment is lying idle, and that the 4 per cent. drop to which he refers means that about £84 million of equipment, which should be productively employed, is lying idle?
§ Mr. Robens
I am obliged to the hon. Member for translating these percentages into figures. This represents a tremendous problem, not only for the electricity undertaking but for the nation. After all, this is a national investment, and to have an enormous amount of plant lying idle seems to be an awful waste of our capital resources.
That is easily said, but it is not so easy to produce the solution. Obviously, we have to find some method of storing electricity. I know that some work has been done on the problem of electricity storage, but I am not satisfied that everything which could have been done by scientists has been done. When my right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) was Minister of Fuel and Power, as it then was, this was one of the things about which he was very keen. After the discussions we had—I was Parliamentary Secretary—and the way in which my right hon. Friend went into this question, I am satisfied that a lot could have been done had research been undertaken with the same vigour as was devoted to research on nuclear energy. Had that been done, I am certain that by now we should have achieved some result in the matter of the storage of electricity.
As in the case of the Gas Council, I consider that the Government cannot stand on one side and say, "Let the industry work out its own salvation." They should realise that the question of lowering the load factor is an important aspect 1019 of our national resources, and, as a matter of urgency, they should be spending a lot of money and devoting a lot of scientific skill and research to discovering ways and means of storing electricity.
That is not the whole story. The best thing is to reduce the peak periods of demand, and the only way to do that is to persuade more people to use more electricity during the off-peak periods. Why not make the use of electricity during the night and during the off-peak periods so cheap that it will pay people to utilise machinery and other sources of consumption to a greater extent during those periods than is now the case? Why not make off-peak power so cheap that it would pay people to go in for storing electricity in a modest way by means of storage batteries? That is the sort of incentive to offer to manufacturers who have ideas about the storage of electricity.
I am not now referring to vast storage schemes, but the kind of storage which would prove useful in the home and in small shops and factories, schemes which would enable power to be taken at night and stored for utilisation during the day and at what are now peak periods of consumption. Money would have to be expended and scientists set to work, but if we solve the problem of selling electricity during off-peak periods, and find some method of storing electricity, the overall cost of production will be reduced considerably.
I feel that I have been speaking for too long, but there are so many interesting things which one can say about these Reports that it is possible to go on talking for a long time. However, I will now jump to what I wish to say about Windscale and the nuclear power programme, leaving my hon. Friends and other hon. Members to pay further tributes to the industry. The Minister told us that the nuclear power programme would be re-phased to extend the target date by a year, which means that we are to get the nuclear plant to produce 5 million to 6 million kilowatts of energy installed by 1966 instead of 1965.
I was glad that the Minister drew the distinction between the Windscale method of cooling and the method adopted at Calder Hall, which is the method to be adopted in the nuclear power stations. In other words, in the power stations air 1020 which supports combustion will not be used for cooling; it will not be an open circuit, but a carbon dioxide closed circuit will be used for cooling. This should eliminate a tremendous amount of risk, so that that what occurred at Windscale cannot happen again at any of the new nuclear power stations.
It is important that that should be said over and over again. It is very important from the point of view of the safety of our people and also because these nuclear power stations, embodying so much skill and engineering knowledge and so little material, represent one of our most valuable exports. It would be a very bad thing if we did not do everything possible to make clear to foreign countries contemplating the purchase of these nuclear power stations—for example, Italy, where one has recently been purchased—that there is nothing in the happenings at Windscale which need cause them to revise their opinion about the safety of our nuclear power stations.
At the same time, I wish to ask the Minister whether he is absolutely satisfied about the functioning of these new stations. I ask because we are now dealing with a size of pile which was not known at the time of Calder Hall or Windscale. These piles are bigger and are working at higher temperatures which, of course, is more economic. Prior to this debate I was reading up some material and I came across the lecture given by Sir Christopher Hinton in Sweden in March of this year. He said:Shortly before the Calder reactor went into operation, it was suggested by Cottrell at Harwell that the worst conditions would arise in the lowest fuel elements… He suggested that fission might give rise to tiny zones of high stress which would make the fuel elements behave as if subject to a higher load than that which could be calculated… tests confirmed Cottrell's theory…I should explain that this was in connection with the fundamental change of design and the decision to stack the fuel elements vertically so that those at the bottom were carrying the load. Sir Christopher Hinton said:At that time the first reactor was actually being loaded and it was impossible to make any adjustments in the design… Arrangements were made for the discharge of selected fuel-elements which would enable a working check to be obtained on the prediction and this has since been done and shown its correctness. The difficulty is one which is easily dealt with, because lateral support can be given to the fuel 1021 elements in the Calder Hall reactors and when we consider the more recent developments in design, we shall find that it is possible to give individual support to the fuel elements.If that effect had not been noticed by Cottrell, Calder Hall would have been built as planned. Probably it would have worked as planned. It might not have been the case that the pressures and the temperatures would have distorted the fuel elements and so blocked the pile. But that does not necessarily mean that when we build a much bigger pile, distortion will not occur. This was really a new theory advanced by a scientist and discovered at the time when a reactor was being charged.
Are we pushing on too quickly? If a pilot plant had been built, would that have been discovered? I consider that we cannot be too careful and I do not think we should push our scientists on too quickly. I think I am right in saying that in the new stations the pile will be twice the present size, perhaps more. The reason is not that it was impossible to make piles as big before, but that the size of the pile is contained by the ability to prepare a casing to hold it. Until it was found technically possible to weld four-inch steel, the size of the pile was limited, and presumably the size is limited by the ability to weld the thicknesses of metal. This means that in these new stations there will be a larger pile operating at increased temperatures for which no pilot plant has been constructed. In effect, the first station will be an experimental station.
All I say about that is not that we should not build a station, but that it means that the Government have a very heavy responsibility. No one really knows, and can definitely swear, what will happen with these new temperatures and this size of pile. Therefore, does not it mean that the Government must make absolutely certain that the relations with the local authorities and those who are responsible for public safety must be taken care of long before that station goes into operation?
We must learn from the Windscale experiment and mishap that we cannot leave things until they happen and then tell the local population, "Keep a stiff upper lip; we have got these things under control." Let us be perfectly frank and plain about what we are doing. There is no reason to be ashamed of the 1022 progress that we have made. Certain risks have to be taken, and we must take them, but it is the Government's responsibility to reduce these risks to the absolute minimum. I urge them to take steps to prevent anything happening such as occurred in Windscale, not only with regard to the actual mishap within the Windscale pile, but in their relations with public authorities outside and those who are responsible for the safety of the civilian population.
I think also that the Government must, through the appropriate Department, tighten up considerably their inspectorate. It seems to me that a special inspectorate must be given the job. The inspectorate must be tightened up. I do not know whether it would have beet discovered, if there had been a sort of factory inspectorate, that the scanning mechanism at Windscale was out of order. It seems to me a shocking lapse on someone's part. There must be an inspectorate and if we in Britain, the first in this field, do not do all that we can in the realm of public safety, then, in my opinion, we shall be making a great mistake.
We must sell confidence in our nuclear power stations. I urge the right hon. Gentleman to look into these matters, to make sure about the safety measures within a station and to make absolutely certain that relations with outside bodies responsible for public safety are on the right basis. If we do that, we shall be making a constructive proposal and doing something which will help and not hinder British industry abroad.
I conclude by saying that when one reads these Reports—and one must do so if one is to take part in a debate such as this—one cannot help but feel that those who have been entrusted with the gas industry and the electricity industry have, on the whole, done an excellent job of work. They have acted in fact as the Civil Service acts, as men and women of acute public responsibility. I do not think that we pay them anything like that which is paid in private industry for comparable work, but we have certainly built up within the publicly-owned enterprises a sort of second civil service of men and women who are proud of the service to which they belong, whose integrity and responsibility to the nation as a whole is above reproach, and I am glad about this.
1023 I would offer the congratulations of all on this side of the House, and I think of all Members of the House, to those who have tackled some very difficult jobs in a way which has brought great credit to them and to the nation.
§ 4.54 p.m.
§ Mr. Maurice Macmillan (Halifax)
It is, I think, quite a frequent convention that when a Member addresses this House he should say that he does not intend to follow the previous speaker. I prefer to break that convention because I wish to follow the right hon. Gentleman the Member for Blyth (Mr. Robens) in what he said about raw materials.
My right hon. Friend the Paymaster-General mentioned the competition between electricity and gas. At the same time, he mentioned the problem of raw materials, a problem in which, I think, the two industries are not in competition. He developed the point that this difficulty of raw materials would be vital in the 1960s, despite the increase of oil production and the use of nuclear energy. He went on to point out that the worst that could happen to us would be that we should have a surplus of energy.
The right hon. Member for Blyth pointed out, in his turn, that some of these extra sources of energy were uneconomical. I think that hon. Members on both sides of the House would agree that the primary responsibility of our power authorities is to develop the sort of energy which is most native to this country—that is, its coal, despite the various longterm contracts we have made concerning the importation of oil.
I do not wish to detain the House for more than a few minutes, but I should like to make one point about a certain type of coal and ask the Parliamentary Secretary what is happening about it.
The Paymaster-General mentioned the use of waste products, and the Coal Board plan to increase the proportion of large coal. I should like to ask my right hon. Friend to what extent the experiment, which seems both economical and efficient, to use some of our undeveloped coal resources is being exploited? I refer to the use which is being made of the waste products of coal mines, particularly of small coal when it has been washed and pulverised and introduced with a 1024 proportion of high grade coal for use in power stations. I understand that this experiment has been successfully carried out at Wakefield, and perhaps the Parliamentary Secretary would let the House know whether it can be extended to other power stations, and whether it is possible to extend it to the gas industry as well as to the electricity generating industry.
As our coal resources become less, as the seams become thinner, and as the mechanical methods of mining are increased, it surely means that we must have more and more waste product from coal washed on the surface; any steps that we can take to utilise such near waste is of vital importance to our economy.
Despite what my right hon. Friend said about oil and about nuclear power, I feel—and I agree with the right hon. Gentleman the Member for Blyth—that coal is our major source of power, and I would point out that, on the figures that have been shown to us, it is bound to be our major source of power for some time to come. The waste products of any industry are still extremely important, and I hope that my hon. and learned Friend will be able to give some assurance on this matter.
§ 5.0 p.m.
§ Mrs. Lena Jeger (Holborn and St. Pancras, South)
I will limit my few remarks to the consumers' point of view of the gas and electricity services, rather than take the broad, national view that other hon. Members have done.
Mention has been made of competition between gas and electricity. Consumers, especially housewives, would appreciate changes in the present system. We are all anxious for a fair choice as between gas and electrical appliances, but it often seems to a housewife that there is an extraordinary waste of overheads when she has to go to one end of the town to look at electrical appliances and to a different showroom at the other end of the town to look at gas apparatus. I may want to have an electrical cooker and a gas copper in my home, but I do not see why anyone should be paid to try to persuade me that I ought to have a gas cooker and an electric copper. The present situation is that there are two completely separate hierarchies of gas and electricity respectively, competing like a couple of private costermongers to sell their products against each other and 1025 thus paying a double lot of overhead charges.
There should be a rationalisation of the situation. One should be able to go to one showroom to see the complete range of domestic apparatus, and there have one member of the staff explain how each should work and its cost. Then he should leave the housewife to choose which she prefers. I should not like anything I am saying to be interpreted as an argument in favour of restriction of the range of choice of apparatus, but the consumer should have reduction in the amount of trouble she is put to to find out what is available, and the boards might well reduce some of their overheads in making all apparatus available at one showroom.
§ Mrs. Jeger
I would now refer to paragraph 50 on page 11 of the Annual Report of the Gas Council, which deals with safety. I was brought to realise the importance of this matter by a fatality which occurred in my constituency. The landlady of a certain house had been warned three times by an official of the Gm Board that a gas fire in a room she was letting was defective and dangerous. She took no steps at all about it. The result was that her tenant in that room, who had no knowledge of the warnings that had been given, was found dead of gas poisoning. The coroner at the subsequent inquest severely reprimanded the woman. She has learned a bitter lesson. One does not want to harry her any more, but I did ask a Question arising out of it of the Minister of Fuel and Power on 20th February, 1956. I asked:… if he will introduce legislation to confer power on gas and electricity boards to enable them to cut off supplies in cases where written danger warnings of faulty apparatus have been ignored by consumers and life is thereby endangered.The Minister replied:Electricity boards already have this power and the question whether it could usefully be conferred on gas boards is among those which I am considering with the Gas Council in my general examination of what I feel to be the serious and growing problem of gas poisoning accidents."—[OFFICIAL REPORT, 20th February, 1956; Vol. 549, c. 9.]I therefore looked anxiously at the Report of the Gas Council, which was issued in March, 1957, to see the outcome of those discussions. I found no reference to any consideration of legislation to 1026 confer on gas boards the same powers as are possessed by the electricity boards to disconnect supplies in cases of this kind. I would ask the Minister to say what stage has been reached in these discussions and to refer to the general question of the danger from gas poisoning.
I am not sure that the public generally are sufficiently aware that there has been a serious increase in the number of gas-poisoning fatalities. In 1953, the number of people who died as a result of accidents involving gas poisoning was 591. This figure is apart from the 2,213 cases which were believed to be suicides. By 1955, the fatality figure from accidents had risen to 784 and the figure of cases believed to be suicides had risen to 3,334. These are figures for England and Wales. I have no figures for Scotland and Northern Ireland.
I know that the Gas Council is giving serious consideration to the matter. I hope that the Minister can say something on the possibility of making the smell of gas more penetrating, so that the whole of a house can get early warning of a leak. I believe suggestions have been made to give a tear-gas effect to coal gas, so that somebody is likely to hurry to turn off a tap accidentally left on. I understand from the Home Office statistics that two-thirds of the accidental fatalities from gas poisoning are of people over 65 years of age. The Report of the Gas Council refers to visits made free of charge to pensioners to check apparatus, but one of the difficulties with older people is that, if a fault is discovered in their gas apparatus, they have to find money to effect a repair. Apart from the human welfare aspect of these cases, could not the gas and electricity boards put apparatus in order free of charge for old age pensioners, and work out the economics of the matter in some way with the Chancellor of the Exchequer? After all, much public expenditure is incurred by the National Health Service as a result of these accidents.
Another serious danger in homes is from fire. Unfortunately, 18 per cent. of these fires are caused by electrical apparatus, and 5 per cent. by gas. A heavy burden is placed on fire brigades and hospitals in dealing with these cases. Most of the trouble is caused by the fact that old electric fires and gas fires do not carry guards. I am not convinced that the gas and electricity boards are doing 1027 all they can to ensure that people with old fires get them fitted with guards. I know from my own experience that if we ring up and worry an electricity board or a gas board we can get advice about guards, but I have not seen any deliberate attempt to put this matter in the front of the showroom window, as it were. Unfortunately far too few people go in and ask how to get a guard fitted to a fire, and they need to be reminded and persuaded to do so.
The Wales Gas Board recently sent out a small notice with its bills to consumers informing them that guards could be fitted to gas fires at a cost of 10s. each and saying:The Board is anxious that all gas burning appliances should operate with efficiency and safety…That kind of propaganda, which could not have cost that board a great deal, would bring worth-while returns. It is something which other boards should be encouraged to do. The 10s. charge, however, is a serious problem to people living on pensions. Again I hope the Minister may be able to look sympathetically for some way of dealing with that problem.
These, I know, are all comparatively small points when we are considering the vast future of these two industries, but they are points which very much concern the individual consumer, particularly in the home.
One last point I wish to raise is about increased charges. When the fixed charge for electricity went up recently it was apparently thought sufficient to inform the public through the Press, but many people had quite a shock when they received their bills and saw that at the lowest end of the scale of fixed charges there was an increase of about £1 a year for that alone.
I had complaints from constituents that they had not had it explained to them and had not been informed about it. They did not consider it sufficient for the board to fall back on its rights under the legislation of merely having announcements made in Parliament and in the Press. Many letters must have been received by the boards and they had to be answered. It would have saved many inquiries if, when the accounts were sent out, they were accompanied by a brief covering letter with an explanation of the increase.
1028 To very many of the points I have made the Minister can say that users must please themselves, particularly in regard to safety matters, but, although all who use gas and electricity have a great personal responsibility in following the advice which is given, there is much for which we cannot be responsible. For instance, how can a householder know that old gas pipes are corroding outside his premises and may be in a very dangerous condition? That must be the responsibility of a gas board. There was a fatality in Liverpool last week-end, to which probably it would be improper to refer in detail because, I understand, an inquest is pending. That incident has raised in the minds of many people the gravest worries as to the state of gas pipes of which the public can be expected to have no knowledge. I hope the Minister can give some reassurance and some information as to the steps the Gas Council is taking to reduce the possibility of such fatalities and dangers.
§ 5.15 p.m.
§ Mr. Gerald Nabarro (Kidderminster)
The fascinating and, I think, most attractive part of our fuel and power debates in this House is the rapidly changing circumstances of our national economy, against the background of which they are debated. I recall that only five years ago we were debating here the most voluminous Report on fuel and power resources ever produced, the Ridley Report. The general anxiety expressed on that occasion was that the static condition of coal production and the unlikelihood of it rising to any appreciable extent during the following decade might seriously prejudice the means of developing sufficiently our needs for electric power for our expanding industrial economy.
If one re-reads the Ridley Report today, one observes the significant omission from it of any reference to nuclear power. In a period of five years—a very short period of time—scientific and technical development has caused us entirely to reframe our ideas of fuel and power economics and finances. Today we should be ill-advised to cast our minds very much farther forward than a matter of ten years. There is the quite revolutionary news filtering through to us now, that the timing of the thermo-nuclear reactions, which so far have been manifested only in terms and conditions of 1029 explosive power for warlike purposes, and the slowing down of those reactions may well provide us with near limitless forces of energy in this country and render within our grasp what is the optimum in my view, namely the employment of our very large coal reserves for purely chemical purposes.
When I refer to the slowing down of thermo-nuclear reactions in the hydrogen bomb that brings into our consideration at once the fact that our islands are surrounded by sea water, in all of which there are hydrogen atoms and one hydrogen atom in 6,000 is deuterium, just one atom of which is said to provide as much energy as 100 gallons of petrol or oil provide in present circumstances. It follows that we are on the threshold of developing limitless sources of energy from nuclear and thermo-nuclear means. It is, therefore, in my opinion unwise to try to project into the future too far the considerations of fuel and power economics which have guided our debates so far to today.
I want to devote most of my speech to the Electricity Authority because, in terms of our scarcest commodity, capital, it is by far the most expensive of our nationalised industries. I make no complaint of that; the production of electrical plants is a very expensive business. The Electricity Authority, at the date of its last annual Report, 31st March, 1957, wrote that the value of is fixed assets before depreciation was about £2,082 million. That is a figure greater than the assets of the whole of the coal industry, the whole of the railways and the whole of the gas industry added together.
It is because the electricity generating and distributing industry is so vastly expensive in terms of our scarcest commodity, capital, that it should figure most largely in our considerations today. I am constantly having it suggested to me, generally by people of Socialist political persuasions that the Government have cut down the investment programme in electricity generation. That is not true. In the year which ended 31st March, 1957, the total capital investment in electricity was £206 million. In the present year, 1957–58, the total electricity generation capital investment, including transmission and ancillaries, is to be £233 million, an increase of 12 per cent.
1030 My right hon. Friend has recently made public the fact that the eletcricity generating new plant programme for 1962 has now been authorised and it shows a figure of new investment at least equal to the record figure of the last 12 months, which provided an amount of new installed capacity of no less than 1,828 megawatts, an increase of about 9 per cent. to 10 per cent. in the total generating facilities of the nation. I say that, in present circumstances, not only is that huge sum of money being devoted to electricity capital investment enough, but it is more than enough, and, in fact, if we use our existing resources wisely, will provide for an even greater rate of electrical power expansion than the 10 per cent. increase per annum arithmetical progression, or a doubling of power, facilities each ten-year period. That, in itself, is generally considered to be a reflex of the growing prosperity of an industrial nation.
I wish to justify very closely and carefully what I have said about the sufficiency of our existing investment in electricity generation, the most expensive form of capital investment today in any of our nationalised industries. I see several coal mining hon. Members in their places with whom I regularly quarrel over coal mining economics. I say, "the most expensive form of capital investment today in any of our national industries" because while, this year, we might invest £100 million in the coal industry we are investing 2.3 times as much in the electricity industry.
I claim that we are not using the huge sum of capital invested in the electricity industry today to optimum benefit, in the national interest. The wastage of resources within that industry is very big, and it is that wastage that I want to see reduced, if not stopped altogether. I do not blame those in charge of the electricity industry for it. As always, I blame my right hon. Friend, who is responsible for fuel and power policy. He and his colleagues in the Cabinet are the principal culprits owing to their failure to co-ordinate fuel and power policy with a view to saving fuel and power investment moneys.
I will start with the admirable point made by the right hon. Member for Blyth (Mr. Robens). The right hon. Gentleman had other considerations to bring, into his speech and he did not, 1031 I am sure, wish to devote very much of his time to the crucial issue, namely, the load factor of our power stations. May I explain in lay terms roughly what load factor means? It means the degree of occupation of the electrical generating plants. If they were generating to maximum capacity 24 hours daily, the load factor would be 100 per cent.
The load factor of our generating stations has been steadily dropping and it is of great importance that we should study what Sir Edwin Herbert, in the Report Cmd. 9672 published last year, said about load factor. In paragraph 399 of the Report he wrote:The present system load factor of the British electricity system (1954–55) is 46.8 per cent. At this level, not only is there an ample margin of spare plant for the Central Authority to fit in their maintenance programme, especially during the summer, but the plant capacity as a whole is much underemployed. In the United States, system load factors of about 60 per cent. are experienced in various regions…The paragraph goes on:The Authority have stated that they envisage a general load factor improvement from 44.4 per cent. in 1953–54 to 48.2 per cent. in 1959–60, and we have seen that the system load factor for 1954–55 was 46.8 per cent.In other words, the Herbert Report suggested that the load factor of our power stations, by 1959, would have risen to 48.2 per cent.
What is happening? Exactly the reverse process. Here are the figures. The right hon. Member for Blyth touched lightly on the subject, and though absolutely correctly, in principle, he did not support what he said by figures from a period of years. The following figures ought to be studied by all hon. Members: 1953–54, 44.4 per cent.; 1954–55, 46.8 per cent.—rising nicely1955–56, 44.9 per cent.; and 1956–57, 43.3 per cent. as against the Herbert suggestion of 48.2 per cent. by 1959–60.
May I translate that to figures in terms of £ s. d.? A 1 per cent. drop in load factor means that 1 per cent. of the capital assets of the electricity industry is not being used to greatest advantage. One per cent. of £2,082 million, which is the value of the industry's assets, is about £21 million. This load factor today is no less than 4 per cent. lower than Sir Edwin Herbert thought it would be in 1959 which means that we are approaching an 1032 unemployment figure of about £85 million per annum of capital assets in the industry compared with the extent that Sir Edwin Herbert suggested would be probable.
§ Mr. Palmer
Without wishing to take from the general good sense of what the hon. Gentleman is saying, may I make the point that that temporary fall-back in the load factor is mainly due to the taking out of service of old and obsolete plant?
§ Mr. Nabarro
No, Sir, the hon. Gentleman is quite wrong. If he reads the Electricity Authority's Report he will see that the Authority attributed it in part, no doubt, to an extremely mild winter, but the fact is—and I repeat it for the hon. Gentleman's benefit; I am sure that he could not have been listening sufficiently carefully—that paragraph 399 of the Herbert Committee's Report includes the following statement:At this level, not only is there an ample margin of spare plant for the Central Authority to fit in their maintenance programme…It used those words.
I say that Her Majesty's Government today, and particularly the noble Lord who has the responsibility for power matters in another place, and who is represented in this House by the Paymaster-General, are engaged in the practice of vying with former Governments, no doubt partly for political reasons, to demonstrate how large is the sum of money that they are providing year by year for the nationalised industries so that Tory candidates can go to the country and say, "See; we love the nationalised industries better than the Socialists themselves love them." This year they propose—I intend to embarrass my right hon. Friend and to prod him—to call for £233 million of new money for the electricity industry while my right hon. Friend is deliberately condoning the system of wasting the existing assets within the industry.
All charity should begin at home. My first principle in business has always been—and I am sure it is sound, because I have always made money out of business—to employ to maximum effect, as continuously as I possibly can, every capital asset of a productive character within that business, to work machine tools of an expensive character the longest possible hours and to get the greatest possible 1033 output from them. We are not doing that with the electricity industry today.
I ask my right hon. Friend to review these capital investment programmes in the electricity industry with a view to employing more effectively the existing plants before he furnishes by way of Ministerial authorisation these huge sums of new money for forward programmes.
Finally, in connection with generation, I commend to my right hon. Friend once again what Sir Edwin Herbert wrote about the employment of these vastly expensive plants. I know that my right hon. Friend has read the Herbert Report with great care, but I wish that he would apply his mind to paragraph 400 of it. In that paragraph it is stated:The greatest single contribution that could be made to improve the British load factor would be the introduction of extended shift working in industry.It is not only a question, as the right hon. Member for Blyth said, of ensuring the sale of electrical current at off-peak times by offering preferential tariff rates. That is one factor and one consideration. But the counterpart of it is that this nation cannot afford, and an individual business cannot afford, to invest huge sums of money in expensive capital equipment and to use it, largely, for only eight hours a day. Though not literally correct, that is substantially what the electricity industry is doing today.
I am sorry that my right hon. Friend the Paymaster-General is not here. The Minister of Power sits in the House of Lords. My right hon. Friend has Cabinet responsibility as his spokesman in this House. He makes his own speech and then disappears. He should be here to listen to mine. I hope that my hon. and learned Friend will tell him of my comments, because I am very cross about his lengthy absence.
We are concerned not only with load factor considerations, but also with the thermal efficiency of power stations. It was said earlier in the debate—and my right hon. Friend was correct to draw it out—that the thermal efficiency of the gas industry last year was said to be 77.8 per cent. The thermal efficiency of our power stations last year was a mere 24.93 per cent. That is less than a quarter of maximum efficiency. It means that of all the huge quantity of coal, and to a lesser extent oil, used by the industry, 1034 three-quarters was wasted. The industry is the largest single consumer of solid fuel in the United Kingdom—42 million tons approximately. Three-quarters of that huge quantity of fuel was wasted and only a quarter was productively employed.
Of course, those who are strong supporters of the electricity industry's case will say that on nationalisation, in 1948, the thermal efficiency was 20.91 per cent.; that over a period of nine consecutive years it has risen to 24.93 per cent. and that it is, therefore, going in the right direction. I agree that it is going in the right direction, but from the point of view of the optimum employment of national resources it is surely most damaging to our national economy that year after year we listen to Ministers of Fuel and Power—this year the Paymaster-General—reciting eulogies upon the nationalised industries without putting their finger on the salient facts which show where, and when, these industries are proving so uneconomic within the national economy.
I have drawn attention to only two examples—the load factor of our power stations and the insufficient thermal efficiency of our power stations—which I commend to my right hon. Friend's attention. I want to pass to a second wastage of our national resources, namely, the treatment by the Chancellor of the Exchequer, no doubt after due consultation with the Minister of Power, of tax considerations on the very large quantities of household appliances which use gas and electricity.
I first raised this matter in the House two years ago. I was then told that it was a very good point; patronisingly, the Treasury Bench drew attention to my observations, agreed that they were correct, agreed that my arguments were sound and said that the matter would be looked into. In the debate on the last Budget I did the same thing. The Financial Secretary to the Treasury replied that there were anomalies and that he would look into them. Another seven months have gone by. Nothing has happened. Why is the load factor falling in our power stations? Because the Chancellor of the Exchequer, by an onerous rate of Purchase Tax, is deliberately discouraging the employment of the most efficient appliances for the conversion of coal to refined fuels, namely, gas and electricity.
1035 When my hon. and learned Friend replies to the debate, will he please give me a single justification for the fact that a gas space heater or gas water heater, and an electricity space heater or electricity water heater, carries Purchase Tax at 60 per cent.? These appliances use indigenous fuel. On the other hand, if one brings oil from the other side of the world and uses it in an oil heater, then, just to encourage the employment of foreign and imported fuel, there is no Purchase tax on that oil heater. Equally, there is no Purchase Tax on a solid fuel heater. Gas and electricity space and water heaters carry Purchase Tax at 60 per cent. whereas their oil and solid fuel equivalents carry no Purchase Tax at all.
This encourages two things. First, it encourages the employment of foreign fuel to the detriment of indigenous fuels and, secondly, it encourages the burning of coal by the most inefficient means, in open grates, instead of by the most efficient means, as a refined fuel in gas and electricity appliances. Will my hon. and learned Friend rise to the heights this evening of explaining his right hon. Friend's fiscal policy and the reasoning behind these economics of the lunatic asylum? [HON. MEMBERS: "Hear, hear."] I have a lot of support from all sides of the House. I shall go on using these arguments, because I know that they are sound, but I cannot get any explanation from any Minister, Cabinet Minister or otherwise, in the Treasury or the Ministry of Fuel and Power, of these extraordinary anomalies.
I have another point to make about the wastage of our resources. Her Majesty's Ministers take full credit for the clean air legislation. Of course, they say, they always intended to introduce it. In fact, a group of private Members, six on this side of the House and six on the other side, compelled them to do so. But for the prodding of the Ministers, there would have been no clean air legislation.
§ Mr. Nabarro
I recognise that it will take a few years to implement a clean air policy.
Gas and electric appliances promote clean air policies and coal appliances do not, unless they are used with smokeless 1036 fuel, which is scarce and expensive. Coke is the best smokeless fuel. It is a by-product of gas, but the gas industry has very considerable difficulties in correctly balancing its output of gas, on the one hand, and coke, on the other, although they are both smokeless fuels. The promotion of a clean air policy is being aggravated by this ridiculous fiscal anomaly which has been perpetuated from so long ago.
The Financial Secretary to the Treasury made very sympathetic noises the last time he replied to me. Since then seven months have passed. In the meantime, and damage goes on week by week and month by month. Her Majesty's Government move at a snail's pace in the matter. If I had moved at that pace in business I should have been in Carey Street many years ago.
This is all related to the Central Electricity Authority's Annual Report. I quote from paragraph 272, and I hope that my hon. and learned Friend will note these words:Sales of electric cookers and water heaters were little different from those of the previous year and were well below the level of 1954–55, though towards the end of the year they were showing signs of recovery. This group of essential appliances is of considerable value in the improvement of load factor, and it is unfortunate that no alleviation of Purchase Tax was possible.Lord Citrine is a diplomat indeed in the restrained terms of his language. My language today has been far less restrained. I hope that it will be more effective.
A third and final example of the deliberate encouragement by the Government of the wastage of our resources is to be found in thermal insulation. After great difficulties, in the last Parliamentary Session we put through the Thermal Insulation (Industrial Buildings) Act. This is recognised to be a large saver of industrial coal and other forms of fuel. Does my hon. and learned Friend recognise the appalling position today in respect of the insulation of new houses? Does he realise that every house which is being put up today, be it a council house or a house for private owner-occupation, is inadequately insulated, and that at a very reasonable estimate—indeed, on the low side—every new house which is erected wastes one ton of coal or its equivalent per annum as a result of failure to conform to effective standards 1037 of thermal insulation? I hope that whichever party is in power we shall average 250,000 new houses a year over the next twenty years. That adds up to a wastage of 5 million tons of coal or coal equivalent annually, in respect of new houses alone, after twenty years' building, and lesser tonnages in the interim.
There is a model byelaw upon thermal insulation which local authorities may accept or reject as they wish, but the standards of that byelaw are so feeble and low as to have little impact upon fuel economy considerations. If my hon. and learned Friend were building himself a new house I feel confident—knowing him as a foremost proponent of the conservation of fuel by more efficient methods of combustion—that he would employ appropriate architects to advise him so that it would be adequately insulated thermally, against heal loss. Why will not he apply to private houses the same admirable principles as have now been applied to new factories, fully supported by the gas and electricity industries, who contribute, through the Gas Council and the British Electrical Development Association, to the Domestic Insulation Committee of the solid fuel, gas and electricity industry?
If he does nothing about it I threaten him—in the utmost Parliamentary sense—and say that I shall bring in, during this Session, a Thermal Insulation (Domestic Hereditaments) Bill. I thought that name up as I went along, as a counterpart to the Thermal Insulation (Industrial Buildings) Act of the last Parliament.
§ Mr. Nabarro
That is the Short Title. I shall bring in that Bill in an effort to apply to new houses the same important principles of thermal insulation which have now been so widely accepted by Parliament, professional interests and industrialists for new factories.
I now want to say a word about wastage in administration. We live in inflationary times, and the pressure of inflation will obviously continue so long as full or over-full employment continues; I say that in no party political sense. But I see no evidence on the part 1038 of my right hon. Friends to try to economise by greater efficiency in the administrative fields of the nationalised industries.
Two weeks ago the Postmaster-General startled the House by asking Mr. Speaker's permission to make a short statement about telephone charges. That caused groans on both sides of the House. Hon. Members were all imagining that he proposed to make increases in the charges. I shall never forget the startled reaction when he said that he proposed drastically to reduce them. I think that the benches in this House would collapse under the astonishment of hon. Members on both sides if the nationalised gas and electricity industries ever announced a reduction in charges.
I do not say that in any party political sense, but there are economies to be made. The hon. Member for Holborn and St. Pancras, South (Mrs. Jeger) touched upon them, and I have mentioned them before. There are 14 million electricity consumers in this country, of which at least 12 million are domestic consumers, householders or occupiers. There are 12 million gas consumers in this country. Does any hon. Member know of many homes which have gas, but no electricity? Practically all houses which have gas also have electricity, at least in the urban areas. It is not true the other way round. Those who have electricity do not necessarily have gas notably in rural areas; but, by and large, those urban areas which are supplied with gas are also supplied with electricity.
Both the gas and electricity industries are nationalised. I do not want to denationalise them. In fact, many times I could have made out a reasoned case for gas being nationalised, in spite of the 44 hours spent on one Sitting in Committee upstairs, because many economic advantages were to be derived from gas nationalisation. But we are not deriving those advantages. Why do I receive, in my home, an account for gas and then, say a week later, a separate account for electricity? Why it is not possible for these 12 million or more houses with both services to be dealt with by means of a unified accounting system with a single account tendered to the householder for both, and whereby their meters are read by the same man?
1039 Why is it not possible? Simply because of the age-old warfare between gas and electricity. But they are both nationalised. They do not belong to the bosses in the industry; they belong to the members of the general public. I want to make a suggestion which my hon. and learned Friend may care to pass on to the Paymaster-General when he returns. I want my hon. and learned Friend to suggest to the Paymaster-General that there should be a formal inquiry, either at Ministerial level or independently, to establish whether, by administrative fusion between gas and electricity in their accounting and metering systems and readings, and in their showroom premises, substantial economies are not to be derived for the hapless and helpless consumer—I repeat, the hapless and helpless consumer.
Two days after the Chancellor's first announcement of an increase in the Bank Rate—the trenchant pronouncement by the Chancellor that that was the first step to be taken in halting inflation, and that there would be other attendant measures—I travelled to North Wales, where a number of ordinary men and women said, "What we have read in the papers is all very fine, but the North-Western Electricity Board proposes to put up its charges by a substantial amount, dating from next February." Is that halting inflation? Of course it is not. The Board has a statutory duty to pay its way, taking year with year.
The Paymaster-General will no doubt tell the House that he has Ministerial control by Statute over house coal prices, but that he has no such control over industrial coal prices, and no control over gas or electricity prices. These boards must pay their way, taking year with year, within the Statutes. But what nonsense it makes of the Ministerial pronouncements upon inflation when these boards continually and continuously put up their tariffs to account for higher charges and costs in their respective industries.
I want my hon. and learned Friend to do something constructive to find economies in the nationalised industries by the methods that I have described and, finally, by the method of fusing the selling arrangements of the two industries. A gas salesman will tell housewives in Worcestershire, "Gas makes the best use 1040 of the nation's coal; use gas for heating and cooking." Along comes the electricity salesman and says, "Electricity makes the best use of the nation's coal; use electricity for heating and cooking." The poor, bewildered woman, I suppose, goes to her Member of Parliament and says, "Is it really true that both gas and electricity make the best use of the nation's coal?" The housewife today simply succumbs to the greatest sales pressure brought to bear upon her by those two competing statutory monopolies.
I say that the whole system is nonsense. I say that we should do what was done in France in 1946, upon first nationalisation of gas and electricity, namely, to fuse in a single authority the whole of the selling and accounting arrangements for all the products of those two complementary and parallel industries, gas and electricity. In France, the amalgamation goes under the title of "Gaz et Electricité de France." Then the housewife and the consumer would not only have the benefit of paying the lowest possible price for the products of the two industries, but would also have the benefit of unbiassed advice and guidance as to the best and most economic appliances to use.
There is a great deal wrong today with ministerial control of these nationalised industries.
§ Mr. Godfrey Lagden (Hornchurch)
Does not my hon. Friend agree that there would be a tremendous saving of money paid in the rental of machinery by the accounting offices? They are paid quarterly in rentals, which reach an enormous sum, and the job could quite easily be done with half the machinery involved.
§ Mr. Nabarro
I am in agreement with my hon. Friend. The methods of these boards are often antiquated and certainly far, too diversified. The benefits of large-scale business organisation and of automation have not yet made any impact whatever upon prices charged to the 12½ million gas consumers and the substantially larger number—14 million—of electricity consumers. My hon. Friend the Member for Hornchurch (Mr. Lagden) has merely touched on a different aspect of the same matter, but it needs high-level ministerial inquiry and not a shelving of this problem. It was not touched 1041 upon by the Herbert Report and it has not been touched upon by any other independent inquiry.
That, then, is a catalogue of some of the wastage of resources in the most expensive terms, by nationalised industries. I do not attack them. I do not attack the head of any of the nationalised industries. I do not wish to be called a "hoodlum" again. I attack my right hon. Friend who is responsible and has continuously been responsible. Evidently he spends much of his time running around Western Europe on common market proposals. He should spend his time in this House, dealing with fuel and power matters for which he is the responsible spokesman.
The catalogue is the very low load factor of our power stations, the poor thermal efficiency of our power stations, the unenlightened fiscal policy which leads to the Purchase Tax anomalies and the drain on resources vested in these hugely expensive capital assets, and the failure of my right hon. Friend to recognise the potentialities of preventing avoidable heat loss in millions of houses and thus wasting large quantities of fuel.
I commend to my right hon. Friend for his weekend reading the admirable book The Neglect of Science from the Clarendon Laboratory at the University of Oxford, written by the Professor of Thermo-dynamics there for so many years, the late Sir Frederick Simon, who wrote in lucid terms, easily understood by the layman, something of the economics of fuel and power, and with emphasis upon the avoidance of waste by scientific means. Today, Her Majesty's Ministers are the most wasteful in these matters of any Administration in my memory.
§ 5.52 p.m.
§ Mr. W. A. Wilkins (Bristol, South)
The House always listens with interest and attention to the observations of the hon. Member for Kidderminster (Mr. Nabarro) when we discuss matters relating to fuel and power and associated subjects. I think there are those in the House who have now come to regard him as an expert in matters of this kind. We pay him the credit that he makes a very considerable study of the problems associated with the industries which are under discussion today, and I think I can say quite truthfully that this is probably the first 1042 occasion on which I can remember the hon. Gentleman being what I would call really non-political. So far as we on this side of the House are concerned, he has not been particularly provocative. His provocative remarks have been addressed to his own Front Bench, and no doubt his own Front Bench will be hard put to it to find answers to some of the questions which he has addressed to them.
I am gratified that for the first time, I believe, since I have been in this House, I can say that I find myself in agreement not with one but probably with two or three of the major points which the hon. Member for Kidderminster has made. I should like to feel that we discuss the gas and electricity industries free from political bias as much as possible. I believe the time has come when we must forget that these industries were once in private or municipal ownership. They have now been in public ownership since 1948, and it is time we realised that and made our contributions in the debates with that fact in mind.
For that reason I resented to some extent the observations of the Paymaster-General when he tried to make what I thought was some cheap political capital by illustrating to the House the increases in consumption and other matters in connection with the electricity industry in particular since we have had a Conservative Government. After all, he might remember that there are now four atomic energy stations being built for generating electricity. They will come into commission during the lifetime of the next Labour Government, and I think that the Tories would be rather upset if we were to go around the country saying, "See, we have now opened four atomic energy electricity stations." We should be past this stage and we should be regarding all the developments in these industries as developments which have been encouraged by Parliament and directed by the Minister responsible to this House.
Having said that I am in agreement with two or three of the things which the hon. Member for Kidderminster said, I must say that at one point of his speech I thought that the logical conclusion of his remarks would be that electricity is too expensive to produce and that we should resort to some other form of heat, 1043 light and power. That was implicit in the criticisms that he made of his right hon. Friend when he referred to what he called the excessive capital investment programme, the failure to use the machinery, the generators, and so on, which are needed all round the clock.
The hon. Gentleman quoted to us the axiom which he said he employed in his own business. He said—I think I took it down correctly—that in his own business he was concerned to use all his plant capital for every available minute of time. Of course, he has an advantage if he is concerned with a business in which he is able so to employ his plant capital. Nevertheless, he, with others, underlined the principal difficulties with which the electricity industry is confronted.
I am not an expert in the technical sense. I do not understand the technicalities of generating, but I have been closely associated for over twenty years with all other aspects of electricity supply, distribution, sales, appliances and matters of that kind. I sometimes think that that knowledge is perhaps more valuable in this House than even the technical knowledge of the experts. I know that the great anxiety which has always confronted municipal electricity undertakings in the past has been the enormous amount of capital that had to be expended on plant for a comparatively short period of maximum usage. Indeed, the peak load period is only, roughly, one hour in every twenty-four, and yet we have to have enough generating equipment and turbo-alternators to supply all the needs of the general public and industry for that one hour of peak load. It means—and let us admit it frankly—that an enormous amount of capital is lying idle for considerable periods every day and night.
As has been remarked two or three times this afternoon—my right hon. Friend the Member for Blyth (Mr. Robens) and the hon. Member for Kidderminster referred to it—the problem confronting us is the problem of the peak load and the off-load. It seems to me that no one is capable of offering any solution to that problem which comes within the bounds of practical application. I have always been waiting to hear some satisfactory solution. I listened in vain to the speech of the hon. Member for Kidderminster, hoping that he would tell 1044 us what we could do with all our electrical plant to make it effective during the off-peak period.
The truth is that there is very little which can be done about it. When we speak of electricity storage, we are speaking about something which I have always been advised is impossible. I am told that the only effective method is to use the product derived from the current which has been generated. We have made some advances in thermal storage, and I believe that there is scope for much greater advance in the use of thermal storage equipment. In the domestic use of power, far more encouragement could be given to consumers to use in the home those appliances which would take large quantities of electricity in the off-peak period. I find myself in complete agreement with the hon. Member for Kidder-minister in what he said about that. I have in mind space heating in particular, and I am sure that considerable advances in the domestic use of electricity are not beyond the realms of possibility.
In the early days of my association with the Bristol municipal electricity undertaking, we installed electrical apparatus for lighting in thousands of houses in the city, but there was an enormous prejudice among consumers at that time against the use of electricity for cooking. Gas was then the all-important fuel for cooking. We resorted to all kinds of encouragement to housewives in Bristol to get them to use electricity for cooking. We believed that if we could get housewives to use electric cookers, it would absorb some of our off-peak load and that we should be able to use machinery which was otherwise lying idle during the middle of the day. There are great opportunities open to the electricity industry today to encourage the housewives of the country to use all manner of electrical appliances during the periods when our plant is lying more or less idle.
I agree also with the hon. Member for Kidderminster on another point, an extremely important point in this connection, namely, the need for Ministerial control. It seemed to me rather strange that an hon. Gentleman on the benches opposite should be pleading with his Front Bench to exercise more Ministerial control over a nationalised industry; but I really agree with the hon. Gentleman, and I was concerned to listen to the 1045 observations of the Paymaster-General in his opening speech. The right hon. Gentleman was at some pains to point out that there were advantages in the use of electricity for some purposes and in the use of gas for other purposes; yet he went on to say, almost in the same breath, that he believed that the stimulus of competition between the two was of the greatest advantage.
I ask the House to believe that I am trying to speak from a completely non-political standpoint about this. As I said earlier, we ought by now to have passed beyond the political stage. I have been trying to examine the problem with some care, and, frankly, I have come to the conclusion that something ought now to be done to bring the operations and administration of the two Boards nearer together. If one had the time, or dared to intrude upon the time of the House, one could show that there is considerable waste and much overlapping as the result of the functions of the two Boards being separated. After all, they supply what are essentially identical commodities—identical, at least, in their major uses for heat, light and power.
Both industries are capable of meeting those needs. I agree with the observations of the hon. Member for Kidderminster in this connection. I believe that the time has come for the House to consider very seriously bringing the two industries closer together, at least from the administrative standpoint if not from others. This may well be one example of a situation where the element of competition is of no advantage. I am not saying that competition may not be of value in some ways, but it is of little or no advantage here. There are various ways in which the two concerns could he co-ordinated.
I expect to be criticised, perhaps severely criticised, for the observation which I am about to make, but it is my personal, practical experience that, for what I call normal domestic purposes, the use of electric fires, electric cookers, electric irons, electric lighting, and so forth—appliances which, in the main, are used to remove drudgery in the home—gives the greatest advantage to the housewife. It is my view that, for these purposes, electricity proves cheaper to the consumer than does gas. If that is so, I see no reason at all why we should not try, through policy 1046 decisions if need be, to encourage the development of one industry, in this case the electricity industry, in those places where it would confer the greatest advantage to the consumer.
What I am suggesting does not involve the elimination of the gas industry, at least not for any time in the foreseeable future. As the right hon. Gentleman said, there are uses for gas and uses for electricity. In my view, gas is more useful to us now as a fuel to provide motive power, very largely for industrial use. If we could come to some agreement amongst ourselves that electricity is the best modern aid in the home and endeavour to concentrate our efforts in that direction, great benefit would result.
I am sorry to have delayed the House, but we are discussing an extremely important subject today. We do not have these debates very frequently, and there are one or two other matters I wish to mention. First, I am concerned about the more efficient use of by-products. I am, to some extent, alarmed at what, to me at least, appears to be the vast accummulation of coke stocks. The Minister will remember that I made an aside during his speech. From inquiries I have made, it would appear that at one gas station alone the stock of coke is already something like 40,000 tons and is. I believe, growing rapidly.
The truth is that domestic consumers, at least, will no longer buy coke because they have to pay more for it than for coal. If I know the English people at all, they would far sooner see a nice coal fire blazing in their grates than a redder, but duller, coke fire. I gather, too, that coke, in addition to being dearer per cwt. than coal, has to carry a 5d. per cwt. delivery charge.
What are we to do with this coke? Who is to buy it? When will it be used? Unless this problem is considered, we shall have a problem of storage in addition to many other problems, because there will come a time when the limits of storage capacity will have been exhausted. I should have thought that this was one of the instances when it would pay to cut our losses and get rid of the coke, even if that means selling it at a reduced price. I know that the gas boards might be afraid that Questions would be asked in the House about why their commodity 1047 was sold below price, but this is an instance in which that kind of suggestion must be considered.
My other point is one which seems to be lost sight of in our debates on these two industries. I am not one of those who believe that we should never change the structure of a nationalised industry. If at any time weaknesses are found in a nationalised industry, it is our duty, in the interests of efficiency, to change the structure. Equally, it would be unwise for us to lose sight of the intentions and desires which actuated us in nationalising the industries and the principles involved. I think, however, that we have lost sight of probably the most important of them.
One of the reasons why I supported—and still support—nationalisation so strongly was that I always thought that the ultimate aim of nationalised industries such as those we are discussing was to provide a uniform and standardised tariff throughout the country. I am extremely sorry that that stage has not so far arrived. I am even more sorry that there seems to be no inclination whatever, by either of these two industries, to reach that aim.
When I first raised the point in the House some years ago, the answer was given—it was a fair answer at the time and I accepted it—that we could not consider standardised tariffs until we had seen the industries in operation for something like five years. We needed that time to obtain an idea of the costs of coal consumption in the industries and the rate at which it was consumed. In addition, it was said that a period would be required during which calculations—actuarial calculations, I presume—would have to be made.
These industries have now been in public hands for ten years and we hear even less talk today of standardised tariffs than we did before. This aspect must seriously be considered, because to me it does not seem right that a nationalised industry, bought with public funds, with the money of every individual in the country, should not have a standardised tariff.
The nationalisation of electricity brought greater benefits to some parts of the country—notably the Midlands and the industrial North-West—than to other parts. Similarly, grave disadvantages came to certain regions. I would 1048 describe the South-West, the region in which I am most interested, as the Cinderella of all the regions except, possibly, for the Eastern region.
When the Minister watches the progress and the advantages which accrue from these industries to our great industrial population, he must never forget the disadvantages which come to people living in the scattered, staggered rural areas such as those to be found in Wales, in Cornwall in particular, and in places like Devon. A terrific burden is still placed upon them, because the change of structure of these industries was designed to make them individually self-sufficient over the years.
It is true that even the South-West region, after a terrific struggle—and all praise to the two men principally at the head of the electricity undertakings in that and the Eastern region—has this year again made a surplus. It has, however, been made very largely at the expense of people in the City of Bristol which happens to be the only industrial centre in the whole of the region. A terrific burden has had to be placed upon a population which, prior to nationalisation, enjoyed almost the cheapest electricity supply in the country. We were very proud of it as a municipal undertaking. We encouraged and developed its use and we had a first-class supply at an extremely reasonable price.
No stretching of the imagination is required to understand what the burden of the rural electrification of almost the whole of the south-west of England below Bristol meant in terms of money to our people. We have been shockingly treated. We have pulled ourselves out of "the red" by dint of very hard work. Although I am not pleading about it, consideration should be given to all those regions which, because of their nature and geography, do not find development easy.
In conclusion, I wish to pay a tribute to those people who have been responsible for the magnificent return which has been made by the South Western Electricity Board. This is an occasion when we do not want to be too parochial, but the growth of sales, the increase in turnover and the maintenance of the surplus are due, I am most gratified to say—I hope the Paymaster-General will take particular note of it—to an increase 1049 in productivity per employee. That ought to be very gratifying to the Minister, to the industry and to the House.
I am grateful to the House for having been so generous in listening to me for what I think may have been a fairly long time. I hope—and I say this very sincerely—that in future the House will regard these industries as being the property of the nation and will not make them the cockpit of political fighting, and that whoever may be in power will bend all their efforts to the development of these two industries in the interests of the nation and the interests of the consumers.
§ 6.21 p.m.
§ Mr. H. R. Spence (Aberdeenshire, West)
It will not surprise the House to hear that I should like to draw its attention for a moment to the affairs of the North and, in particular, to the affairs of the North of Scotland Hydro-Electric Board, which comes under the authority of the Secretary of State for Scotland.
My hon. Friend the Member for Kidderminster (Mr. Nabarro), when he was speaking a few minutes ago, asked the Paymaster-General very pertinently, whether the programme he had in mind for the future development of electrical power had taken fully into account the developments which were very likely to take place in atomic research and development. My hon. Friend indicated the latent forces which might be derived by the release of energy in gradual degrees from water as a source of hydrogen atomic power. I should like to know, when the Parliamentary Secretary winds up the debate, whether the whole question of hydro-electric development in Scotland has been considered in the light of developments which may possibly take place in the next few years.
My hon. Friend the Member for Kidderminster said that only five years ago we did not envisage this tremendous new source of power, atomic energy. During the next five years there is no reason to assume that progress will be less great. Indeed, there is reason to assume that it will be greater. I say this because the capital expenditure involved in developing new hydro-electric schemes is very large indeed. We should assure ourselves that the money we spend is spent in the right way, if we go ahead with some of these 1050 tremendous projects which, I know, are still in mind.
Both my hon. Friend the Member for Kidderminster and the hon. Gentleman the Member for Bristol, South (Mr. Wilkins) have referred, in connection with the cost factor, to the high load factor for our generating stations. They referred to a number of possible uses being made of power at off-peak periods to keep the generating plants running at the reasonably high output of 50 per cent. to 60 per cent.
I understand that proposals are being considered for the use of off-peak surplus current in Scotland as a form of reservoir storage, where the off-peak power is used to pump water up to a high reservoir, and then the same water comes down through the turbines and generates power for the peak loads. It would be very interesting if the Parliamentary Secretary would give us some idea of the probable economics of this form of utilisation of off-peak power.
I shall not emphasise further what has already been well said about a differential tariff to encourage the use of power at night, but I am convinced that the Minister should call for research to be made into tariffs which might be offered through some special form of metering which turns the current off during peak load periods for those who wish to use electric power for thermal storage or space heating in one way or another.
I turn to what is, perhaps, a more domestic problem for me, and that is the supply of electricity in Aberdeenshire itself. We have all hoped, during the last ten years, that gradually the network of grid electricity would completely cover our rural areas. I can only say to the Paymaster-General and the Parliamentary Secretary tonight, and to the Joint Under-Secretary of State for Scotland, whom I am glad to see here, that we in Aberdeenshire feel an intense sense of disappointment at what has been done hitherto, and, indeed, a sense of frustration, which we have felt especially during the last two or three years when very little has been done to increase what I may call local distribution.
High voltage mains across the county and failures of current in Aberdeenshire are almost unknown in the network of high power supply, but there are areas in Aberdeenshire, quite near to Aberdeen 1051 itself, some of them, such as Keith Hall and Balmedie, where we have asked again and again that something be done. We have asked in letters direct to the Hydro-Electric Board, and in an Adjournment debate not very long ago I asked that something should be done for what I, on that occasion, described as islands of isolation.
There are two main factors which should be considered. There is the hardship of those who cannot get electricity in their homes although their neighbours only a mile or two away can get it; and there is the other hardship which is involved through no fault of the individual who wishes to use current, but caused rather through the delay of the authority in providing the current, and that hardship is that year by year the cost of installation is going up and up. Farmers who, gladly, would have had electricity supplied three, four or five years ago are today looking very carefully at the cost of installation and are wondering whether it would not be better to put in diesel plant and to dismiss any idea of ever getting a grid supply.
I am reporting to the Government tonight that Aberdeenshire feels it has not had a square deal. I hope that either the Joint Under-Secretary of State or the Parliamentary Secretary will give some figures to the House showing how much has been spent on rural and local electrification in Aberdeenshire during the last three or four years, and how much in neighbouring counties, and how much in Scotland as a whole. There is a very definite impression in Aberdeenshire that we have not had a fair deal in this matter.
I hope that my hon. Friend will not only do that, but will undertake to see that there is a change in the attitude of the North of Scotland Hydro-Electric Board towards the business of getting this local network established and filling in the blank spaces, and to see that the Board makes that its priority job. The feeling is strong, and if the Parliamentary Secretary can do anything to allay it, and, above all, if he can promise some action, that will be very welcome indeed.
Previous speakers have made a point of the necessity for economy in administration and for co-ordination, for instance, by having one set of inspectors and collectors for the reading of meters and the 1052 collection of accounts. I am sure that there would be no difficulty about doing that in the north-east of Scotland. I hope that the Minister will endeavour to give effect to some of the very helpful suggestions made in the last two or three speeches to which I have listened.
I should like to emphasise particularly that while some parts of Scotland are amply and practically completely covered, in the sense that domestic electricity can be supplied to any house in any area, we in Aberdeenshire do not enjoy that happy state of affairs. I ask whether the Parliamentary Secretary can reply to the points that I have raised and give satisfaction to many people who are waiting to find out whether there is any chance of their having electricity or whether they should go over to the use of Calor gas and diesel power and give up all hope of their houses being connected to the grid and of enjoying all the benefits that that would bring.
§ 6.31 p.m.
§ Mrs. E. M. Braddock (Liverpool, Exchange)
I want to speak on a quite narrow, constituency and local government point but one which affects very many hundreds of people on Merseyside—exactly according to how the wind blows. On the outskirts of my constituency is a large power station, the Clarence Dock power station which was built by the local authority in the 1930s and which has been used very extensively for the production of electricity. When the industry was taken over by the Government, the local authority ceased to have any responsibility for modernisation or for alterations, and difficulties have arisen, particularly within the last three years, because Liverpool has been desirous of establishing clean air zones.
Difficulties have arisen with M.A.N.W.E.B.—the Merseyside and North Wales Electricity Board—because that Board cannot find any way of preventing the very extensive emission of smoke from the three chimneys of the Clarence Dock power station. There has been very extensive correspondence between the local authority and the Board. Efforts have been made, although the local authority considered them insufficient, to reduce the amount of very dangerous smoke that comes from these chimneys. The matter came to a head 1053 when the health committee of the local authority, feeling frustrated after a great deal of correspondence, requested the medical officer of health to take legal action against M.A.N.W.E.B. When this matter came before the finance committee of the Liverpool Corporation and before the council it was felt that it would be rather unwise to take legal action, without further consultations, to compel a nationalised industry to carry out requirements which the medical officer of health was requiring private enterprise to carry out.
The city council, therefore, decided to ask for permission to send a deputation, not to meet the Minister of Power, because this action was to be taken under clean air regulations, but to meet the Minister of Housing and Local Government. The request was made in August, and it was not until almost the end of October that a reply was received from the Ministry of Housing and Local Government. The authority was then told that perhaps it was not the right thing for a deputation to meet the Minister and that there ought to be more consultation with M.A.N.W.E.B. on what could be done.
I agree that there have been some developments and research, but those have not stopped the emission of very dangerous smoke front the chimneys. On almost every day of the week, according to which way the wind blows, complaints are made about it not only in Liverpool but in Crosby and Wallasey. One of the complaints from the other side of the river was that the local authority in Wallasey was unable to carry on with its work because its property was filled with fumes from the Clarence Dock power station across the river. Pilots coming in from the Isle of Man or over the bar of the river say that it is difficult to find the airport although smoke from the Clarence Dock power station's chimneys tell them exactly where Liverpool lies, and we in Liverpool are often prevented from seeing the blue sky because of haze from these chimneys.
We were told that experiments were being carried out with a certain type of coal, but that the amount of this coal that M.A.N.W.E.B. could obtain was limited. The Coal Board was not willing to allow the electricity board to obtain the quantity, needed. The local authority has 1054 renewed its request to see the Minister of Housing and Local Government. The Minister does not think the matter important enough for him to see a deputation, although he says that if the local authority so wishes it can see his officers and officials. I hope that the Paymaster-General will look at the correspondence and will consider whether he thinks it advisable that further action should be taken in order that the situation in Liverpool may be alleviated. If something is not done, and if the local authority goes to the trouble of taking legal action against the electricity board, then, judging from my knowledge of Liverpool and of what happens when these three chimneys emit smoke for long periods, I do not think that there will be much difficulty in securing a decision in the courts for the local authority against M.A.N.W.E.B.
It is very difficult, in these circumstances, for the local authority to insist that other types of industry should not emit smoke in a smokeless zone and that the method of stoking the tugs on the River Mersey should be changed to prevent the excessive emission of smoke. It is difficult for the local authority to insist upon other people carrying out the clean air regulations in the city if a nationalised industry is the very worst offender and there appears to be no means of preventing this emission of smoke at the power station.
It is not only the local authority which is complaining. The Mersey Docks and Harbour Board makes serious complaint about the position, and everybody who owns buildings in the Liverpool area complains about the quantity and type of smoke, dangerous smoke, coming from the chimneys because of its effect throughout the area. It is impossible to keep buildings clean in Liverpool largely because of the type of smoke emission from the chimneys of this power station.
I hope that further action will be taken on this matter. I hope that the officials of the Ministry of Housing and Local Government and of the Ministry of Fuel and Power will be prepared to have discussions with my local authority. If anybody in the Government is not satisfied that the position is as bad as I have said, may I say that I have already made provision for any one of them who wishes to do so to go up with me in 1055 one of the small Auster planes and look at the situation around the Clarence Dock power station at almost any time of the day.
This is not a frivolous complaint; it is a serious one. This type of smoke emission is injuring the health of the people in Liverpool. It is a chesty place, and the records taken by the medical officer of health show that the condition is affecting health. I do not want to give figures and facts at length, but I hope I have said sufficient to convince the Government that some action should be taken, with the Central Electricity Authority, to inquire into what can be done to prevent smoke emission from the Clarence Dock power station.
It has been said that the power station is a legacy left by the local authority. That is so, but the local authority built it as an up-to-date power station, and if the local authority had still been in control of electricity, and a clean air Bill had established the responsibility for smokeless zones, the local authority would have been compelled to find the money to make such alterations to the power station as would make it as smokeless as possible. So it is no use saying that this is the responsibility of the local authority twelve years after the nationalised industry took control.
I stress the point that we in Liverpool are serious about this matter. We feel that little has been done, perhaps because of the restriction on capital investment, but something can be done if there is sufficient good will. I hope, therefore, that notice will be taken of what I have said on behalf of the local authority—because I am speaking on its behalf, as well as on behalf of my constituency—to get officials of the Ministry of Fuel and Power, the Ministry of Housing and Local Government and the local authority together, to find out what can be done to get rid of the trouble caused by the Clarence Dock power station.
§ 6.43 p.m.
§ Mr. Arthur Tiley (Bradford, West)
I am happy to follow the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock) because, as the House knows, she is anything but frivolous. Some months ago I read that in our industrial cities only 8 per cent. of the value of the 1056 sun's rays percolate through to those of us who live there. I also read that all the inhabitants of those cities have the lungs of city dwellers. We all know that there is nothing wrong with the lungs of the hon. Lady, and we all respect the sincere manner in which she voices her opinion on all things which affect her constituents and the country. Therefore, I hope that the Minister will be able to help her to solve this problem.
I believe that the country will applaud the manner in which the House has been conducting this debate, because on both sides we have been departing from party politics, and many thousands of my constituents tell me that the country is sick of party politics. We have been endeavouring to find a way to make more perfect these two large nationalised industries. When the hon. Member for Bristol, South (Mr. Wilkins) was speaking, I felt certain that many hon. Members on both sides of the House would have been able to say, as he did, that in our great, progressive, industrial cities there were many of us who felt that the nationalisation of electricity and gas had been a deterrent to our local progress. I believe, however, that over the years most of us have seen that the country generally has benefited from the Measure. [HON. MEMBERS: "Hear, hear."] When I hear voices from the Opposition benches I feel I must say that we entered into nationalisation in a most imperfect and hurried fashion, and only by dint of common sense over the years that lie ahead will it eventually be made to show that this has been an advantage to the country.
I hope, therefore, that if I voice some criticism of a section of the Central Electricity Authority's accounts, it will not be thought that I am indulging in party politics, because that is not my purpose. For instance, in Statement A6(a) and A6(b) we are given the turnover, the expenses and the profit in connection with the contracting and sales of fittings in the trading accounts of the twelve area boards.
The accounts for this year show that on a turnover of £41,200,000, which is a massive amount of business, there was a net profit of only £740,000.
§ Mr. Tiley
It is very low, as the right hon. Gentleman says; it is almost nonexistent. I am not trying to make points against the various boards, but in the Midlands there was a turnover of £6 million and a profit of only £10,000, while in South Wales there was a turnover of almost £1½ million which produced a loss of £51,000.
My point is that in carrying out our duties we all receive complaints from time to time from our constituents about the methods employed by the area boards in the fitting of various appliances in our homes. We are all told stories, such as of a five-ton lorry arriving with a driver and a mate to deliver a washer. What I would like the Minister to consider, and to comment upon, is why the profit is so small. The turnover last year was approximately the same and yet there was a decline in the net profit of approximately two-thirds during the last twelve months.
Would it not be better if the nationalised industries, especially the two under review today, produced the power, brought it to our homes and then allowed private enterprise to carry out the selling and fitting of the various appliances? It is a task which the Authority makes a bad job of doing because it has not the facilities for the personal service of all the small items involved. If we could show common sense in the matter, it would have the effect of doing the following things.
First, it would release a good deal of capital to be applied to the broader expansion of the electricity and gas boards. The right hon. Member for Blyth (Mr. Robens) said that we were short of capital. Millions of pounds of capital must be lying dead in electricity and gas board shops all over the country. Why should we not allow private enterprise to take over that section of our trading? Just as the nationalised electricity and gas industries are doing their job, so the private enterprise section of our community is doing its job, and this is a job which it does much better than any Government Department can do.
§ Mr. Tiley
The hon. Gentleman can never resist a party jibe to further his miserable little attitude.
1058 Secondly, this would allow a great deal more of the time of the leaders in the industries to be directed to the more important job of developing the boards.
There would be a third effect. We have a huge problem to solve. We have to decide how much of our manpower we can afford in the distributive trades on clerical and administrative work. If we could transfer a huge portion from that work into production, science and technology, it would be a very great advantage to the country.
Many points have been put to the Minister, and they should provide him with a wonderful opportunity in replying to the debate. We had various plugs from my hon. Friend the Member for Kidderminster (Mr. Nabarro), who wants to prevent wastage of heat. We had various plugs in favour of the hon. Member for Kidderminster by the hon. Member for Kidderminster.
It is most unfortunate that any hon. Member on either side of the House should complain if a Cabinet Minister leaves the Front Bench for part of a debate. It ill becomes any back bencher to expect these responsible men to stay here all day. Only a short time ago the Prime Minister pleaded with the House to be considerate in this respect. We have had the pleasure of the presence of my hon. and learned Friend the Parliamentary Secretary to the Ministry of Power, and I know that he will have an opportunity to reply to some of the points which have been raised.
§ 6.53 p.m.
§ Mr. Sydney Silverman (Nelson and Colne)
The hon. Member for Bradford, West (Mr. Tiley) has made an extremely fair-minded speech. It was both brave and generous on his part to begin with a confession of a change of mind and of error based on experience of the nationalised industries. I think that we all appreciated the spirit in which he made his speech.
If the hon. Member will not regard it as an impertinence to offer any encouragement to him, I would add that he need not have apologised for accompanying his acceptance of the principle of nationalisation of these industries with criticisms of their administration, operation or finance. To think that one needs to apologise for doing that is to mistake 1059 the whole purpose of the nationalisation of the industries.
I do not know whether the hon. Gentleman is right or wrong in the criticisms which he offered about finance, and it does not matter, from my present point of view, whether his points are well or ill taken. The important thing is that he should have an opportunity of discussing them. The important thing is that when one is dealing with such a basic matter as the fuel and power, on which our economy ultimately rests, this should be a matter which hon. Members assembled in Parliament should have the right to comment upon, to discuss, to criticise and to debate and to hold the Minister responsible for, although the opportunity comes only once a year.
Without nationalisation, none of these criticisms could have been offered. Even if there were nothing else, the holding of this debate is, in itself, a complete justification of the policy in these matters of the Labour Party. One recognises that a great many hon. Members on the other side of the House who resisted it at the time have come to see that in the case of coal, gas and electricity, and one can only hope that their experience will enable them to approach in a less doctrinaire fashion any further nationalisation proposals that we may have the opportunity of bringing forward.
Whatever hon. Members opposite may have thought about it at the time, I doubt whether a single one does not today look back with a little shame when he remembers the kind of opposition which my right hon. Friend had to face when piloting through the House, and particularly through the Standing Committee, the Measure on which one of these great achievements rests.
The Standing Committee on the Gas Bill set up a record, having an all-night sitting on two successive nights. It sat through the whole of one day, the whole of a night, the whole of another day, the whole of another night, and part of the succeeding day before the Bill could be got through the Committee stage. My right hon. Friends did not complain then, and I am not complaining now. Right hon. and hon. Gentlemen opposite believed that the business of an Opposition was to oppose. They were not in favour of the principle of nationalisation, and 1060 when they were asked to adopt it they were not convinced that it was right. They were perfectly within their rights, and they exercised their rights with great fortitude and devotion in opposing the Bill at every stage. I made no criticism of them then for doing it, and I make no criticism of them now for having done it.
However, having regard to the experience that we have had, we are entitled to say to them that in any future exercise in this matter—we are not entitled to ask them to accept everything we offer without criticism and inquiry—they should abandon the doctrinaire notion that private enterprise is necessarily a better thing than public ownership, public control, public administration and public criticism of those matters which are vital to the nation's life and welfare.
I think that the hon. Member misunderstood an interjection which I made. He referred to vast trading figures and asked why the profit was so small. Why need there be a profit?
§ Mr. Tiley
If those are the economics on which the hon. Member intends to pursue his argument, surely they must fail. He asked why there need be a profit. I showed that there was a profit of about 1.2 per cent. A wage award could wipe that out and produce a loss, and one cannot engage in business on those principles.
§ Mr. Silverman
The hon. Gentleman is not doing justice to my point. No one says that the finances of such an industry must not be sound. Of course they must be. No one says that such an industry ought to run at a loss. Of course it ought not to run at a loss. But if the finances of the industry are so managed that it pays all the interest on its borrowed capital, all its administration charges, all its development charges, sets something aside for reserves and for further capital investment, pays all its wages, and so manages its accounts that it provides for every contingency that the most conservative accounting could legitimately ask one to provide for, there need not, in our opinion, be anything surplus over and above that.
In so far as a profit is made over and above having provided for all those things, the consumer is being charged too much. That is all very well for a private business which has to pay a dividend to 1061 shareholders. That is its duty and no one complains. But it is not the business of a nationalised industry which is trying to run a part of the national wealth in the interests of the community as a whole.
Provided the accounts balance and that there are proper reserves, then, if the accounts show that some money is left, it should be reinvested in the expansion of the service, or returned to the consumer by a reduction in price. A profit, to our way of thinking, becomes a complete irrelevancy. I apologise for having said so much about that topic, but I was tempted by the hon. Member for Bradford, West and incited by his intervention.
I rose to make only one small point. There is another matter in the operation of a nationalised industry which is legitimately open to criticism and review. That is how it treats its individual consumer and especially how it treats the poorest of them. This, again, is one of the peculiar advantages of a nationalised system, because a privately owned industry run for profit cannot afford to pay over-emphasised attention to the needs of its poorest customers. A nationalised industry ought to do that.
I have been prompted to speak in the debate by an experience which I had while going round my constituency some months ago. I found an elderly lady living in a slum house, which had long been condemned, and who was living in complete darkness. Her gas had been cut off. She could not boil a kettle. She could not make herself a cup of tea on her own fire and she had been living like that for many months. The gas board had cut off her supply long ago and had refused to reconnect it until certain conditions had been fulfilled.
People like that are very poor and can buy their gas and electricity only in small quantities for which they pay in advance. They are the only consumers of gas and electricity, and of most other things, who are called upon to pay for what they use in advance. They pay for it in advance by putting coins into a meter and until they have put a coin into a meter they cannot get gas or electricity.
That lady's meter had been robbed. She had not robbed it and nor had anyone connected with her. She had no responsibility for interference with it, but the gas board called upon her to repay the money. She said, "I do not owe you 1062 anything. I have paid you already in advance for all the gas I consumed. It is true that the money was in my meter. It is true that my house was broken into and that the meter was wrecked and the money taken away. But it was your money which was taken away and not mine. Why should I pay twice, even if I could afford to pay twice?"
I am bound to say that I have considerable sympathy with that view, especially as the woman was poor and had been without gas in a house of that kind for so long. I made some inquiries, and on behalf of the gas board I am bound to say that I discovered that it was not the first time that this had happened. There had been two or three earlier robberies and no doubt that had led the board to take a more severe view of its rights and duties than it would otherwise have taken. I fully understand that.
Nevertheless, the point of principle remains. The gas board takes the view that once a person has parted with the money and put it into the gas meter it ceases to be that person's property and becomes the board's property. That is reasonable enough, because if one pays a shopkeeper for goods which one wants to buy and he then gives one the goods, one cannot say that the money is not then the shopkeeper's.
In this case, the money is obviously the gas board's and that is the board's view, so much so that in those cases where a householder can be shown to have interfered with a meter the gas board is not content merely to say that the householder is the custodian or trustee of the money and that if he pays it the board will be satisfied. The boards says. "You are a thief. This is our money. You broke into our meter. You took the money away and you are guilty of larceny." In many cases the board takes such people to the police court and has them convicted of a criminal offence and criminally penalised.
However, where the householder is in no way concerned, he is caught on the other horn of the dilemma and the gas board points to the conditions in the pamphlet and says, "We made it a condition that you should be responsible for the safe custody of the meter and its contents." In that way a householder is caught both ways. If he steals he is guilty of larceny and if someone else 1063 steals the money he is the insurer for it to the benefit of the gas board.
That is not a correct view and I ask the Minister to consider it very carefully. Of course, it is perfectly right that the tenant should be responsible for the safe custody of the money and the meter and that if it can be shown that the loss is due to any want of reasonable care then, obviously, the occupier ought to be fairly held responsible for that. However, the board does not take that view. It does not say that the householder has not taken proper care of its property and is, therefore, responsible. It says that the money is gone and the householder is responsible for safe custody and must pay.
Having taken that view, the board is enabled to be judge in its own case and to apply its own remedy. There is no question of having a court determine whether in the circumstances of a case there has really been any want of care. Indeed, in many cases where the board has prosecuted the real thief to conviction it has still held the occupier responsible for the return of the money. The board does not have to test it in any court, because it has the power to apply its sanctions at once, by cutting off the supply and leaving people without light and without heat until they accept the board's view.
I am not saying that this is a vast social problem—I do not believe that it is for a moment. The number of cases, compared with the large number of people who buy their gas and electricity in this way, is very small. There are cases, and some are bad ones, but there is not a large number and I grant that on many occasions the boards concerned act with humanity and consideration, not always exacting the full penalty which, on their own interpretation of the contract, they may be entitled to exact.
Nevertheless, it is wrong in principle. It causes a certain amount of hardship. It is unjust when it causes hardship and I think that this is one of the minor matters which it is right to discuss on occasions like this. I hope that the Minister will not mind that I have introduced this minor detail of administration into a debate which has dealt with very much more important things. The debate has ranged far. It has dealt with a number of matters on which the future prosperity 1064 of our nation must inevitably depend. This is the only opportunity we have of raising points of principle, even though they are minor administrative points. I hope that the Minister will have another look at this matter and consider whether an alteration or amendment might be made.
§ 7.12 p.m.
§ Mr. Cyril Osborne (Louth)
I want to look strictly at the Motion before the House, which is,That this House takes note of the latest Annual Reports and Statements of Accounts of the Gas and Electricity Industries.The first thing we look for in accounts is to see whether the company or organisation has made a profit or loss. The hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman), who speaks with great clarity on these matters, asked why there need be a profit at all. I want to answer that question if I can. It is rather important to us, because of future legislation which is likely to follow the legislation now under consideration.
The revenue accounts of the gas industry show, in page 119, that last year sales totalled £207 million, and the surplus was £3,800,000. Item 16 is Profits Tax and item 17 is Income Tax. Against both those items there are dots. No contribution at all has been made. [An HON. MEMBER: "Lovely."] "Lovely", says an hon. Gentleman; but he should wait until he has heard what I have to say. In page 139 of the Report of the Central Electricity Authority the total sales are shown as £298 million and the net surplus available for general reserves as £2,729,000. That was after there had been added a transfer from taxation reserve of £3,880,000. It is true that £10 million was transferred to the supplementary reserve for depreciation of fixed assets, but in normal accounts that is a charge. Therefore, on the accounts presented at page 139, the Central Electricity Authority made a loss, not a profit.
The issue I want to put to the House is this. The hon. Gentleman said, "Why need we make a profit at all?" It is very largely from the profits of industry that the Welfare State is maintained. Both sides of the House will have to face the problem that if more and more of our industries are nationalised and they produce accounts like these, then some other sort of taxation will have to be invented 1065 to raise the revenue for old-age pensions, hospitals, and all the services of which we are so proud.
The hon. Gentleman asks, "Why need we make a profit?" The answer is because the greatest shareholder in every industry which makes a profit is the Chancellor of the Exchequer. If industry does not make a profit, there will be no Welfare State. This is something we have to face. Whilst I am not saying that we can undo what has been done—the nationalised industries have to remain nationalised, as I see it—somehow we must do our best to improve efficiency.
These accounts warn me of the folly and danger, in which hon. Gentlemen opposite may indulge when the next election takes place, of suggesting that the great industries now making great profits—60 per cent. of which goes to the Chancellor—should be nationalised, and have to produce Reports like these that show a nil payment under the items Profits Tax and Income Tax. If the Opposition gained power and did that they would be faced with a problem as to where to get alternative revenue.
§ Mr. Palmer
I hope the hon. Member is not overlooking the fact that these nationalised industries have paid considerable interest on their loan capital.
§ Mr. Osborne
That is quite true; but they are paying interest not much in excess of the fixed charges of the industries they took over. That was paid by their predecessors under private enterprise.
§ Mr. S. Silverman
Is the hon. Gentleman suggesting that the accounts of the Gas Board would be healthier if they showed a 25 per cent. profit on turnover, so that they could pay Income Tax out of it?
§ Mr. Osborne
No. Perhaps the hon. Gentleman will be good enough to listen. If the proposals that he and his colleagues support, that other industries should be nationalised—insurance, sugar, steel and the like—are put into effect, they should hear in mind that if those industries present their accounts and show no payments of Profits Tax or Income Tax, then the Government of the day will be faced with the problem of finding some other source of revenue with which to maintain the Welfare State. It is an issue to be 1066 faced, because it is from industry that this revenue must come. I should be most interested to know from what source they propose to raise their revenue if it is not from industry.
The hon. Member for Nelson and Colne reminded us of the bitter debates we had in this House in 1945–50 over the nationalisation of these industries. I remember the Standing Committee on the Gas Bill sitting continuously for, I think, fifty-seven hours—[HON. MEMBERS: "Forty-four."]—I accept the correction—forty-four hours without a break, a great feat of endurance. Let us see how that atmosphere has changed. Earlier on this evening there were present only four hon. Gentlemen opposite, and there were six Members on this side of the House. At 6.35 there were only three hon. Gentlemen opposite, and there were five only on this side. There were more paid officials in the Officials' Box than there were Members in the whole of the House. Compared with the enthusiasm of ten years ago, the debate on these accounts shows that nationalisation is a dead issue.
§ Mr. Osborne
On my figures, at 6.35 there were five Members on this side of the House as against three on the other side. The issue of nationalisation is utterly dead.
§ Mr. Osborne
Because it has proved so unsatisfactory to the consumers. Ask the people who buy coal. Ask the old-age pensioners who have to buy electricity and gas to keep themselves warm. That is why it has been a failure. The accounts show that these nationalised industries made no real profits, nor any great contribution to the Welfare State. They did not do a thing towards maintaining the Welfare State. I point out to hon. Gentlemen opposite the immense problems they will face should they nationalise other industries in the way they nationalised these two industries.
§ 7.20 p.m.
§ Mr. William Hamilton (Fife, West)
The point made by the hon. Member for Louth (Mr. Osborne) that the first thing one should look for is the profit emphasises the difference in the basic 1067 approach of the two sides. Profit is the yardstick of hon. Members opposite, but let me tell the hon. Member that we do not always see profit in figures on the balance-sheet, but in the homes of the workers, and on the faces of their wives and children. We see it in these two industries, not in the balance-sheet but in the 70 per cent. of the farms that have been electrified; in the light that now shines in the faces of the farmers' wives that did not shine before. The bulk of those farms have been electrified by the nationalised industry—
§ Mr. Osborne
The hon. Member asked why it is necessary to make a profit. It is necessary because in these two industries there is a capital charge of £250 million, and unless they make a profit they cannot have those capital, developments.
§ Mr. Hamilton
I answer the hon. Gentleman by asking him where we find the profit from the nationalised Army? Do we look at the Army Estimates to see what the profit is? We have a whole series of nationalised institutions of which we never think in terms of profit in the accounts presented. If the electricity and gas boards chose to double and treble their charges they could very soon make a profit and, by the hon. Gentleman's yardstick, would then be successful. Do I take it that he is now advocating doubling and trebling those charges in order that we may prove those industries to be successful by showing a profit, as he says, in the accounts? Is that what the hon. Gentleman wants?
The hon. Member for Louth makes the point that nationalisation is a dead issue. It was not so very dead in the days to which he has referred, when the slow progress of legislation was due not so much to lack of enthusiasm on this side, but to the bitter and doctrinaire opposition from the other side, when Conservative Members spent twenty minutes trying to decide even how to spell "nationalisation."
It is a very interesting exercise to watch Conservative Ministers taking responsibility for the nationalised industries. They are rather like a Labour Minister in charge of a Defence Department. They are always anxiously looking over their shoulder, because they are defending 1068 something with which, basically, they do not agree. They are looking over their shoulders for the stab in the back.
The Paymaster-General was faced with this dilemma today. He has had to defend and applaud, as have his predecessors, the activities of the nationalised boards whilst, at the same time, trying to placate somewhat his hon. Friends behind him. So he indulges in this double-talk. He talks of planning—a dirty word in the Conservative vocabulary—and then immediately talks about the benefits of competition as between gas and electricity.
I agree that the sooner we take these industries out of party politics the better, and the fact that, as an hon. Member opposite said earlier, they are no longer a basis for party politics is due precisely to the success of the industries themselves. But that only applies in this House. It is no good right hon. and hon. Gentlemen opposite applauding in the House what the industries are doing, and then devoting a good proportion of their propaganda campaign outside it to denigrating them.
They cannot have it both ways. They must either criticise them violently inside and outside the House or support them strongly inside and outside. I recall the fate of the former Minister of Fuel and Power who is now Minister of Education. I remember the scintillating speeches he made about the nationalised industries—and look what happened to him. I could not help feeling this afternoon that the Paymaster-General had that very much in mind.
The 70 per cent. of farms that have been electrified—most of them, undoubtedly, since nationalisation—have been supplied precisely because the primary motive has been not the profit motive, but a form of social service. They have been electrified because it is in the national interest to do so and not because a profit would be made out of them. From the financial point of view it has probably not been worth while electrifying them, but I will give the House a case in point from my own constituency.
Some forestry workers—an essential and important section of the community—occupy about ten houses in an isolated spot. A lady came down to tell me that they were using oil lamps, and so on, and would like electricity. I wrote to the area board and, my goodness, within a 1069 fortnight the men were measuring up, and those forestry workers have been promised electricity before this Christmas. Had it been a private company the answer would inevitably have been that, on the £ s. d. criterion, it was simply not worth while.
I am far from saying that we have nothing more to do in these industries. They have both big and small problems to face, but let me quote a contrasting example. Some of the people who live in the small Cumberland village of Cleator Moor work at the atomic plant at Calder Hall, the twentieth-century fuel development establishment. A relative of mine works in that ultra-modern plant, and then comes home to read in gaslight. He can have only an electric accumulator radio. Cleator Moor is not an isolated community at all—it is within a few miles of Whitehaven. Electrification there has, I think, been delayed over the years because of the Government's financial policy, which has restrained investment of that kind to an uneconomic degree.
A further point relates to a difficulty in which I, personally, find myself. I think that some employees of the board are using its time going round getting private business for themselves. I could quote a case, but it would mean a man losing his job, and I do not know what to do about it. I appeal to the Minister to tighten things up so as to prevent that kind of abuse because there are within the industry people who are sabotaging it in this way. As I say, I do not want to be responsible for getting a man the sack, but I do want the Minister to give an undertaking to ensure that that kind of thing is cut out as far as possible. We all want to make a success of these industries, and that should apply to the staffs within them no less than to the politicians.
We, on this side, are very proud of the record of the nationalised industries. Problems remain, but who can deny that but for the nationalisation of our basic fuel industries we should not have enjoyed the standard of living that we have had ever since the end of the war, and ever since these nationalisation Measures were enacted?
§ 7.30 p.m.
§ Mr. J. C. George (Glasgow, Pollok)
I had not intended to take part in this debate because I understand that we 1070 who represent constituencies in Scotland are to have an opportunity to discuss our section of these industries in a few weeks' time, but one or two points were mentioned today with which I wish to deal.
Had I been a Member of the House at the time when the industries were nationalised, I should have opposed the legislation as did my colleagues. But now that they have been nationalised, and will continue as nationalised industries, I believe it our duty to do everything possible to make them a success and an asset to the nation. Nevertheless, I cannot recognise the electricity industry from the description contained in the speech of the hon. Member for Fife, West (Mr. Hamilton). He pictured it as a beneficent industry willing to connect up outlying places cheaply and at a loss. The description by the hon. Member is far from the truth, as he would appreciate if he went to the north of Scotland and found out what the North of Scotland Hydro-Electric Board is asking from crofters to connect up their homes. I am told that a charge of £700 has been asked to connect up a single house. Of course, electricity will never be provided in that area so long as the price remains as high as that.
I have had a personal experience with the Board. I wanted to start an industry in the Highlands in an isolated area far removed from the present sources of power. The company with which I was connected was asked to give a ten-year guarantee to the Board before it would think about providing power. To ask for a ten-year guarantee in the Highlands in the case of a highly speculative industry is a sure way of keeping industry out of the Highlands.
I wish to deal with points about the Central Electricity Board which were raised first by the right hon. Member for Blyth (Mr. Robens) and then reinforced by my hon. Friend the Member for Kidderminster (Mr. Nabarro). When dealing with the load factor. I think that they both created a wrong impression, and, if what they said is misunderstood, they are to blame. They argued that the poor load factor was the fault of the Board, because plant was being worked inefficiently, and that this could be prevented by proper management. That is not true. The Board installed the plant 1071 but industry is responsible for the load factor. If industries work only day shifts and take no power for night shifts, what can the Board do about it? Surely the answer to the load factor problem can be supplied by industry.
§ Mr. George
Yes, industry should change to double shifts, and even triple shifts. I read recently that in the great textile industry of this country—which we are told so often is threatened with extinction—the unions refused to tolerate double shift work. But that is the answer to the load factor problem. Do not let us condemn the Board. Certainly, the Board should carry out all the propaganda possible to encourage a greater use of power during off-peak hours, and that is being done. I have met servants of the Board who plead for the use of methods to help solve the problem of the load factor. They are very much alive to this problem.
I consider that the terms for power used during off-peak periods are not widely know and not easily understood. Perhaps they might be simplified. Another point the Minister might think about is that today certain industries are enticed to use power during off-peak periods by the offer of cheaper rates. Industries which have always used power during those periods get no reward and there are growing up two types of industry; one type has always used power during off-peak periods and receives no reward, and the other is being enticed to do so by the provision of a reward in the shape of cheaper rates.
A lot could be done to help solve the problem of power storage, although the storage of water for use to provide power for off-peak periods is by no means cheap or easy. We are faced with the great question of the capital expenditure necessary to install pump storage throughout Britain. Incidentally, there are not many suitable places to do this. But such installation must mean the expenditure of a lot of capital and we have the eternal question of priorities—whether to extend the power system of the country by meeting immediate needs or to divert some of the capital to a system of pump storage. I do 1072 not think, however, that we should condemn the Board for not using pump storage methods at the present time.
My hon. Friend the Member for Kidderminster criticised the Board over the question of thermal efficiency. He seemed to deride and scorn the figure of 24 per cent. thermal efficiency in the electricity industry. I do not think that my hon. Friend should be so quick to condemn, because this is quite a remarkable technical achievement. During the adolescent years of the industry it was easy to make great improvements. In 1907 it took 5 lb. of coal to generate one unit of electricity. By 1950 that amount had been reduced to 1½ lb., and that represented a considerable technical advance before nationalisation. Now every decimal point must be fought for, and it is a brilliant scientific achievement to obtain even 1 per cent. more efficiency. To condemn the Board because it has now reached what is indeed a high percentage of thermal efficiency is, in my opinion, wrong and unfair.
Private enterprise is making a contribution in this connection. Private enterprise is helping to raise the efficiency of the nationalised industry by research and other aspects of generation. In the field of free enterprise increasing thermal efficiency is to be gained, and I regret that the Board should have been condemned over this matter in which it has done so well.
My hon. Friend the Member for Kidderminster raised another point which I consider foreign to this debate, the question of thermal efficiency in the home. I feel that my hon. Friend introduced it for his own purposes. I must declare an interest in the matter before I go on to refer to the statement of my hon. Friend that no council house or private house in the country was built with any regard for thermal efficiency. I have been sufficiently altruistic to build a house which is completely insulated in order to find out what thermal efficiency can do for homes. The need for thermal efficiency in the home is no new cry. Could we but afford thermal insulation, we know that it is the right thing to incorporate in our houses. But I can say now that the cost of thermal insulation is so high that it is not a practical proposition.
1073 The type of brick we use in this country has been mentioned and again I do not consider that germane to the debate. We use a solid brick which has no value from the point of view of thermal insulation. We could use a perforated brick containing air spaces which would provide good insulation and help achieve the object which the hon. Member for Kidderminster has in mind. In my opinion, no matter how many checks and inquiries we carry out—we have heard a number of demands today for inquiries into the industry—there is no substitute for relentless, ruthless and informed searching for efficiency on the part of officials in the industry, and in the two industries we are discussing today we find that in fairly full measure. In any case, I consider that we should not always be inquiring into these industries; we should leave them alone for long periods.
§ 7.40 p.m.
§ Mr. George Thomas (Cardiff, West)
We listened with great interest to the speech of the hon. Member for Pollok (Mr. George). At the beginning of it I thought that he would generate more heat than a power plant. But as he continued it became clear that he had a tribute to pay to the nationalised industries.
I believe that the British economy rests on the nationalised industries more than on anything else at present. It is a tribute to publicly-owned industry that Minister after Minister, belonging to the party opposite, has come to the Treasury Box, through the years, to pay tribute to those who are employed in this industry and to its high efficiency. I should have thought that it would have been a matter of pride for both sides of the House that the British character reveals itself at its very best in publicly-owned industry, and that, in the struggle for our economic survival, a gigantic contribution is being made by the fuel industries, particularly in the matter of keeping down prices.
I realise that, in common with every other aspect of our national life, the nationalised industries have to deal with higher wage levels and higher prices; but it is little short of a miracle that the prices of gas and electricity have been kept at the low level that they have been. When the hon. Member for Louth (Mr. Osborne) goes prancing away on his favourite horse—profits—they are always 1074 just dangling in front of him—he is doing a disservice to his own cause, because the maximum contribution of these industries has been, I believe, not only to increase their productivity but to maintain stability in prices, which the private sector has been unable to equal.
I want, in particular, to refer to the Welsh side of this matter, and the House will perhaps forgive me if I make a passing reference to the South Wales Electricity Board. The Board suffered a very sad loss during the past year owing to the sudden and unexpected death of its Chairman. Mr. Howles came to the South Wales Electricity Board from the South Wales Power Station. He was a well-known opponent of nationalisation and a distinguished servant of the greatest power plant in South Wales before nationalisation, but he brought to the public service an open mind and an enthusiasm in service which has left all Wales, and, I believe, the United Kingdom in his debt.
I am glad to have the opportunity tonight to say how much the Welsh Members on, I believe, both sides of the House, regretted this tragedy, and how much we appreciated the work that was done in the past. I have only that to say on the electricity work in Wales, but I believe that my hon. Friend the Member for Brecon and Radnor (Mr. Watkins)—I am not canvassing, Mr. Speaker—is also hoping to speak in this debate.
I want now to speak about the Wales Gas Board. It has become a part of our Welsh economy and it is a part of our Welsh life today. The Chairman of the Wales Gas Board is regarded in a very special light by leading Welsh industrialists. He is consulted by industrialists on all great issues in the Principality, and he has proved that the department is capable of first-class public relationship. I hope that when the Parliamentary Secretary is winding up tonight he will find it possible to refer to this side of the Wales Gas Board's work. It produces in Welsh, as well as in English, its annual Report, and I heard this year the Welsh talk which Mr. Mervyn Jones gave to the people of Wales to explain all that the Gas Board was trying to do in the life of the Welsh nation.
It made me very proud to have been in this House at the time when the gas industry was taken over for public control 1075 and public ownership, because its record of achievement in Wales is particularly high. The Wales Gas Board, as the Minister will know, has extended its activities in almost every sphere. The grids now span Wales in the north, south, east and west. Industry nowhere in Wales today is dependent on local gas undertakings. The connections are now so extensive that it is enabled to rely upon a basic supply, however great the industry. This is reflected by the fact that the supply of gas to industry in Wales has increased during the past year by 5.2 per cent. and its increase since the vesting date to industry in Wales alone is no less than 82 per cent. The gas industry in Wales has become a thermometer to measure our industrial success.
I am particularly pleased to see in the Report an account also of the Board's new experiment with methane. The Father of the House, my right hon. Friend the Member for Gower (Mr. Grenfell), whom I am glad to see in his place, has been many years in the mining industry of South Wales, and he will know, as will all of us from that part of the country, how the miner dreaded fire damp. It is a strange thing that today the gas board is able to use the fire damp that was the very curse of the coal mining industry to produce this new power which it is making available.
In page 19 of the Report of the Wales Gas Board I find that, for the first time, it has been possible to include a reference to gas from coal mines and oil refineries. Although, today, this represents only 1.3 per cent. of the output of the gas industry of Wales, it is an astonishing proportion to be reached so soon. I note with pride thatWork began on the construction of a Methane Grid to take gas from three collieries in the Afan Valley to the Aberavon Works of the Port Talbot Undertaking, ultimately to pass into the South Wales Grid System…. This is true natural gas—firedamp extracted by the National Coal Board from its collieries to improve mining conditions.It is little short of miraculous that our mother industry in Wales should be so closely linked to the gas industry, which is giving to the Port Talbot Steel Works almost its lifeblood at present. I am pleased to see that this experiment with methane is not limited to South Wales. At Wrexham, it is being continued with considerable success.
1076 We have not had an exciting debate today, for success does not make for exciting debates here. It is failure that makes for exciting debates on the Floor of this Chamber, when someone is trying to pin responsibility and blame upon people who have failed the public. The very fact that there is no fire in this debate, and that spite has not revealed itself, is a measure of the success of these basic fuel industries.
I am glad that Government supporters are as great nationalisers as we are for the basic industries. [Interruption.] The Paymaster-General, who interrupts me, came to this House later than I, and he has gone a good deal further; but that is by the way. He was not here to share the bitterness of the post-war years to which my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) referred. I do not think that there is anyone now sitting on the Government benches, except the Joint Under-Secretary of State for Scotland, who was here in those exciting years. We accept these industries as part of modern Britain. We believe that they have justified themselves and they give us great confidence as we look to the future.
§ 7.52 p.m.
§ The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)
I hope that it will be acceptable to the House and for its convenience if I say a few words now in response to what has been said this afternoon.
I would start by saying that the two Scottish Electricity Boards—I shall not deal with gas—have shown the same continuance of growth of demand by consumers as has been revealed in England. Demand for the North of Scotland Board increased last year by 10 per cent. and for the South of Scotland Board by just short of 9 per cent. I do not think that I need go into great detail because it will be within the knowledge of the House that a Select Committee is likely shortly to report on the two Scottish Electricity Boards, and the House will no doubt have an opportunity of considering the Report. I shall confine myself to the questions that have been put to me this afternoon.
My hon. Friend the Member for Aberdeenshire, West (Mr. Spence) asked whether the North of Scotland Hydro Electric Board had plans for nuclear 1077 stations. So far, no proposals have been put forward, although the board has been considering whether certain sites might be suitable.
He raised the very interesting question of pumped storage and asked what was happening in that regard. The House may be aware that the principle of pumped storage is that surplus electricity should be used in off-peak periods to pump water up into a reservoir, generally high in the hills, from which power can be generated in peak periods. This idea is particularly useful in view of the nature of atomic stations, which are best used on a long-term twenty-four-hour basis and thus are capable of supplying surplus power in off-peak periods to pump the water up, and so supplement at peak periods the power that they themselves produce.
An example of this is the Loch Awe scheme which includes an important pumped storage project for pumping water up from a reservoir to a corrie on Ben Cruachan. This constructional scheme, No. 28, was published on 18th July. Objections were made to it, and those which were not withdrawn are under consideration at the present time. One feature of that scheme is the very low cost per kilowatt installed, as compared with hydro-electric schemes in general.
My hon. Friend the Member for Aberdeenshire, West and my hon. Friend the Member for Glasgow, Pollok (Mr. George) referred to differential tariffs. I am sure that the South of Scotland and the North of Scotland Boards will note what my hon. Friends have said on this subject. The House will be aware that tariffs are essentially a matter for the Boards.
My hon. Friend the Member for Aberdeenshire. West spoke of the very strong feeling in certain parts of his constituency which have not yet received a supply of electricity. I understand that the board will not require a contribution from those who signed an agreement before capital contributions were introduced.
I am not saying that the Government may not from time to time request the nationalised boards to re-phase their capital investment programme, as was done at the end of 1955—as my hon. Friend knows because we had an 1078 Adjournment debate on the subject—and as has recently also been done. It is for the board to decide the priority in which it will deal with outstanding applications for a supply and how it will lay out the money it can afford to spend on distribution to new customers. That the limiting factor is what the board can afford is indicated by the fact that it is unlikely this year to spend all the money set aside for such distribution. I am afraid that my hon. Friend must advise his constituents to put to the board itself or to the consumers' council the question he put to me about the prospect of their getting a supply of electricity.
The hon. Member for Fife, West (Mr. Hamilton) referred in passing to rural distribution. The figures for the South of Scotland Board—I think he was speaking of that board although his area is rather on the fringe of the two boards—are rather better than he said. I understand that the board has now electrified 79 per cent. of all farms in its area, which is very creditable. The proportion of farms in different areas which had an electricity supply before nationalisation varied very considerably. In my own constituency, the number of farms that bad a supply was one of the highest in the country. Indeed, the present chairman of the South of Scotland board was a pioneer in that work.
I agree with my hon. Friend the Member for Pollok that our duty is to do everything possible to make the boards as successful as they can be. The temper of the debate has shown that that is the spirit of the House of Commons as a whole. The object of this kind of debate, as the hon. Member for Nelson and Colne (Mr. S. Silverman) said, is not simply to pat the boards on the back but to raise difficulties and discuss general questions. My hon. Friend the Member for Pollok raised one or two difficulties and criticisms. In quoting £700 as the charge to connect a single house in the crofting area my hon. Friend was taking rather an extreme case. The charge is necessarily related to the cost of giving a supply. The North of Scotland Board makes a fixed contribution, which is related to the amount of guarantee which the applicant himself has to put down.
§ Mr. Hamilton
Will the hon. Gentleman say how much that figure of £700 is above the average typical figure?
§ Mr. Macpherson
I am afraid I have not got that figure here. I imagine that it is constantly changing. It would be rather difficult to give a fixed figure.
Reference was made to the load factor. The House may wish to know that the load factor for the South of Scotland Board is 47.8 per cent. My information is that that is fairly closely in line with the load factor in the country as a whole at present.
I conclude by saying, on the general question of debates on the nationalised industries, that I heartily agree that we have to look at their policy, and do so in a sympathetic manner. It is not possible, however, nor is it desirable—I say this to my hon. Friend the Member for Aberdeenshire, West—that we should use this kind of debate to induce the Government to give directions, which in any case they probably have no power to give. It is a very good thing indeed that the House should take the opportunity of making, not only the Government, but also the boards, aware of particular difficulties which may be occurring. It is a good thing that, apart from the normal machinery of consumers' councils, there should be this additional outlet.
§ 8.2 p.m.
§ Mr. F. H. Hayman (Falmouth and Camborne)
Speakers in the debate have taken a regional point of view after the two main speeches which opened the debate. I think that is right since our constituencies are in different areas. I make no apology, therefore, for referring in particular to the South West Area Board, which covers my constituency.
The Minister smiles at that, but so long as he is there I shall continue to remind him about it. The South West Area Board has an excellent record. It has completed its five-year rural development programme within four years. Having regard to particular difficulties and the sparsely populated area it covers, that is a remarkably good achievement. In the last year, in reinforcing existing services, it has laid 669 miles of mains and set up 1,284 sub-stations. I was glad to note one thing which does not always happen when new connections are made—there has been a great increase in sales of electricity.
Over the eight or nine years of nationalisation the increase has been no 1080 less than 114 per cent. As an indication of the importance of the domestic consumer in this area, I should point out that this class of consumer uses 41.5 per cent. of total consumption and since nationalisation the use of electricity by the domestic consumer has increased by 25 per cent. One of the dominating features which we have to face in rural electrification is increasing costs. The programme of the South West Area Board for the next five years will involve no less than £25 million. Most of us who think carefully about it will realise that the Bank Rate of 7 per cent. will impose a terrific burden in addition to that £25 million and that, in the end, it will have to be borne by the consumer.
I listened with some agitation to the percentages which were given of connections for electricity to farms in other areas. In the South-West, in spite of remarkable achievements by the Board, which have increased the number of farms connected by more than 100 per cent. there are still 43 per cent. of farms in the area without electricity. To achieve the national average of 85 per cent., nearly 10,000 more farms will have to be connected. The increasing cost of connections is causing anxiety. I quote an instance, which came to my notice in the past week, of one scheme in my constituency which the area board has phased for the 1959–60 programme. It will cover fourteen farms and twenty-two other premises. It will require four miles of mains and 11 sub-stations, and the total cost will be £7,000
I stress again, as I have done in the past, the fact that many farms do not use electricity to the extent that they should. The country is bearing a heavy cost, which falls mainly on consumers in urban areas, in bringing electricity to the countryside. When one reads that 20 per cent. of the farms connected in the south west used less than 200 units in the last winter quarter, one feels that those farmers are not playing the game. I know the National Farmers' Union is conscious of its liability and is doing all it can to remedy the trouble.
Nevertheless, we ought to say that if the rural electrification programme is to proceed those who receive its benefits should consume as much electricity as can reasonably be expected. Electricity is not brought to the countryside merely for the purposes of television or electric 1081 light; it should be used for power, for cookers, as much as possible in order that we may be fair to consumers as a whole. The main cost of rural electrification is borne by urban consumers, but, as the cost increases, in years to come, when dealing with more sparsely populated areas, I think this House will have to face the necessity of giving a subsidy out of national funds.
When he was speaking this afternoon. I put a question to the Paymaster-General about atomic power stations. When one is to replace a redundant coal-fired station, consideration should be given to siting it as near as possible to the redundant station because, otherwise, men will be thrown out of work, and because of the immense capital investment by the local authority in social services such as schools, sewerage, water supplies, council housing, and so on.
Part of the report of the South West Electricity Area Board includes a report from its area consultative council. The Parliamentary Secretary will remember that that consultative council gave great consideration to the Electricity Bill which was before the House earlier this year, and thereby gave evidence of its virility and—I have forgotten the word I wanted to use—
§ Mr. Hayman
—initiative which it has always shown in the South-West. I pay tribute to the new chairman of the South West Area Board for the fresh initiative he is giving in the new phase of the industry's existence. I pay my tribute also to the staff in every section. The industry has been working very smoothly, and one hears very few complaints about it.
§ 8.10 p.m.
§ Mr. Raymond Gower (Barry)
I, like other contributors to the debate, wish to pay my tribute to those who preside over the destinies of these two very important basic industries. One of the most attractive features of our debate has been its non-partisan, non-political character. Very often in our political life we fight our battles about a particular issue and then, whatever the results of those battles may be, we generally contrive later to make the thing work.
1082 It would be dangerous for us, however, after saying that State ownership is accepted and is recognised as a fact, to say that we are complacent about the organisation or administration of these two industries. Indeed, as the hon. Member for Bristol, South (Mr. Wilkins) has rightly said, we must be ever vigilant and anxious to improve their administration and efficiency. There is, I think, little danger of any of us feeling complacent after hearing the speech of my hon. Friend the Member for Kidderminster (Mr. Nabarro).
If I have ever been in danger of being complacent, I received a corrective when I looked recently at some figures showing the progress of the comparable industries in the United States. In the United States, one can see what has been achieved on a much larger scale in providing, for instance, for rural electrification on a far higher level than anything yet achieved here, and in providing for the much greater demands of far larger industrial and domestic consumption.
If there is a danger of ministerial complacency, it emerges occasionally, I think, when there is talk about progress with rural electrification. Speaking parochially, the circumstances in South Wales do not warrant complacency. The progress of rural electrification in South Wales, though doubtless not unreasonably poor in the circumstances which confront that particular board, is, nevertheless, rather less than that achieved in some other parts of the United Kingdom.
I wonder whether my hon. Friend the Parliamentary Secretary will address himself to the problem of rural electrification, which has been mooted in some degree by a number of hon. Members tonight. Correspondence which I have received—some of which I have forwarded to me—reveals that some smaller farmers find the initial payment an impossible burden. Is it possible for the boards to reconsider the matter generally and, also, as it affects particular cases? I do not object, nor do I imagine that anyone could object, to a board's requiring some assurance that electricity, if provided, will be used to a reasonable extent.
Like the hon. Member for Falmouth and Camborne (Mr. Hayman), I have come across cases of individual farmers who have, for the first time, received a 1083 supply of electricity and have then used it, perhaps, only for their own domestic lighting. In such circumstances, I should not be surprised if the electricity boards were very disinclined to put in a supply of electricity at great expense, while anticipating no great revenue, or no reasonable revenue, as a result of their great expenditure. However, where the electricity boards can receive fair assurances, I hope that they will be able, particularly in the South Wales area, which lags so much behind, to assist with the initial payment.
§ Mr. Tudor Watkins (Brecon and Radnor) indicated assent.
§ Mr. Gower
I see the hon. Member for Brecon and Radnor (Mr. Watkins) nodding in agreement; his experience in Mid-Wales is similar to mine in South Wales. There is a rather disappointingly low level of rural electrification in parts of Mid-Wales, too. Though I appreciate some of the reasons for it, and though I appreciate the great improvement, I hope that in the near future there will be even more improvement.
As the hon. Member for Cardiff, West (Mr. G. Thomas) justly pointed out, we in Wales have a special pride in the Wales Gas Board. This, I think, is due in part, though not entirely, to the fact that it is a Wales Gas Board and it has presiding over it a very distinguished Welshman. I am not a Nationalist, but I sincerely hope that the lesson to be drawn from this will not be missed.
I come now to something a little more controversial. My correspondence in the last few years from many parts of Wales has revealed a very widespread desire—informed or uninformed, as some may judge—that there should be a Wales electricity board. My right hon. Friend has told me, and I have been told by his predecessors, the Herbert Report to some extent supporting their view, that this would not be desirable on economic grounds. Most of my correspondents, however, including some persons of great technical experience in the electricity industry, dispute that assessment of the problem.
I ask my hon. Friend now whether it may not be possible for there to be a much more exhaustive treatment of the 1084 problem, the result of his deliberations being sent to me, perhaps, or in some way being published. I assure him that the great success of the Wales Gas Board has certainly added fuel to the desire entertained in some quarters for a Wales electricity board. Other things being equal, or almost equal, I, too, would then support the idea of a Wales electricity board.
Other things being equal, I am quite satisfied that the minor aspects of natural, local and national pride are not things we can completely ignore. I believe it to be a fact that the people concerned in the administration of the Wales Gas Board, many of them born in Wales, take a particular pride in that institution, for the reasons I have tried to express.
There has been a suggestion today that the operations of the gas industry and the electricity industry should in some ways be merged, at least on the administrative and distributive side. I should not like to accept those arguments at their face value. For one thing, the areas of the different industries are not always the same. I have just cited one example. We all know that Wales is deemed to be an ideal area for the gas industry, but we are told, on good authority, that it is not an appropriate area for the electricity industry. I assume that it would be extremely difficult, if not impracticable, to combine any facet of the administration of the Wales Gas Board with the administration of the two Boards in the electricity industry, the South Wales Electricity Board and the Merseyside and North Wales Electricity Board. I do not think that this plea, made by my hon. Friend the Member for Kidderminster and supported, I believe, by the hon. Member for Bristol, South, should be accepted at its face value. There are serious difficulties, which they have skirted over tonight.
My hon. Friend the Member for Kidderminster, who made such an informed and entertaining speech, implied that advertising in a nationalised industry was reprehensible. That is another argument which I distrust. We in this country are unduly frightened of advertising. The level of advertising is far below the level in North America. While it may he possible to have an excessive amount of advertising, I do not think that we suffer from such an excess here.
1085 Indeed, we all know that advertising in many things evens out demand and spreads it over a number of new installations. I cannot see that the reasonable, or even the existing, use of advertising in either industry is to be condemned or even questioned. It has been done well and reasonably and, on balance, it is right that the consumer should have the merits of these alternative forms of domestic power brought to his or her notice in an attractive manner so that people can make their own choice.
I hope that my hon. and learned Friend the Parliamentary Secretary has noted the separate pleas which have been made in this debate for him to approach the Treasury and Treasury Ministers for an alteration in the Purchase Tax on different forms of heating appliances. It really is ludicrous that those appliances whose use should be encouraged bear the main brunt of Purchase Tax and that those appliances which either use imported fuel or are wasteful in operation bear no Purchase Tax. I should have thought that it would be one of the first priorities of my hon. and learned Friend's Ministry to make the strongest representations to the Treasury that Purchase Tax on these items should be altered at the earliest possible date.
§ 8.23 p.m.
§ Mr. Tudor Watkins (Brecon and Radnor)
One suggestion in which I join with the hon. Member for Barry (Mr. Gower) is that the Parliamentary Secretary and the Minister should consider what the hon. Member has said concerning one electricity board for Wales. Two Scottish Members have made excellent contributions in this debate. For that reason, no doubt, there was an early intervention by the Joint Under-Secretary of State for Scotland. I am the third Welsh Member who has spoken tonight, but the Minister for Welsh Affairs will not be replying to us—I did not even expect him to be present and he did not, of course, know that we should be speaking. The Parliamentary Secretary will, however, have realised that half of the speeches to which he will have to reply deal with Welsh affairs.
We are examining the Reports of both the gas and electricity industries. We are here to scrutinise them, to give praise where praise is due and to criticise where criticism is necessary. I join with my 1086 hon. Friend the Member for Cardiff, West (Mr. G. Thomas) in paying tribute to the late Mr. Leonard Howles and I do so from the rural parts of Wales. I pay tribute also to the good work which has been done, and is still being done, by the Chairman of the Wales Gas Board. Mr. Mervyn Jones. Since names have been used, another to which I should like to refer is the elevation of Mr. R. G. Williams, the Secretary of the Consultative Council in Wales, to be Secretary of the South Wales Electricity Board. It is now a case of a poacher turned gamekeeper, and I hope that all the letters which I have had occasion to write to Mr. Williams in the past few years will bear fruit now that he is the Secretary of the South Wales Board.
I wish to raise one or two matters of policy concerning the administration of the boards in the important Mid-Wales area. In the Report of the Council for Wales and Monmouthshire, great play was made of the lack of uniformity of payment for connection charges. In the area, we find three different boards, each with a separate policy for connection charges. The Merseyside and North Wales Board bases its charge on acreage. The Midlands Board has not a charge, but a guarantee, making up half the difference of the guaranteed sum. This is a good arrangement. The South Wales Board, in whose area are many farms to be electrified, has a system of capital contributions. In an Adjournment debate some years ago, I spoke of it as a tax on villages, with which I thoroughly disagreed.
I am sure that it would be a good thing to have uniformity of policy in connection charges. The Parliamentary Secretary would be well advised to ask the boards concerned, and particularly the South Wales Board, to examine the system operated by the Midlands Board. My reason for making this suggestion is that as the hon. Member for Barry said, as the development programmes proceed, the costs involved will become higher.
Each of the Reports that we have had on Mid-Wales has laid stress on the number of farms which still are not connected to electricity. The latest figures, in the Mid-Wales Investigation Report, show that for the whole area 1,404 of 1,880 farms are without electricity supplies. In one of the counties which I represent— 1087 Radnorshire—502 out of 562 farms are still without an electricity supply. It is, therefore, a big problem. I hope that we can get an assurance from the Parliamentary Secretary that in the rephasing of capital expenditure, rural development programmes in Mid-Wales will have his sympathetic consideration.
One of the Mid-Wales reports suggested that the sum of £60 million should be made available by the Central Government for basic services for which capital expenditure is required in Mid-Wales, a large proportion of which would be required for rural electrification. I hope that the Parliamentary Secretary is in a position to assure us that, apart from the normal rural electrification, the Government will implement their promise to give every consideration and assistance to rural electrification by allotting additional capital expenditure for the purpose in the Mid-Wales area.
I am very glad to be able to place on record to the credit of the South Wales Electricity Board that it has issued a further programme of rural development, the programme for stages 16 to 20. With the consultative council I have been in touch with the board about that to point out that areas which are at the end of that programme, areas which really should not be in the programme at all but should have been in the earlier programme, are still no better off than they have been for some time.
Will the Parliamentary Secretary kindly inquire whether the consultative council in South Wales was satisfied with its negotiations—if that is the right word to use—with the board and what the council's reactions were when the rural development programme stages 16 to 20 was made known? My information is that although the council argued for a long time the board insisted upon the council's accepting that programme. The consultative council is supposed to represent the consumers, and, therefore, the board ought to bear in mind its viewpoint and representations.
For some time representations have been made by my constituents in the Llanwrtyd Wells to the Sugar Loaf area for a scheme to cover all the farms there which are on good productive agricultural land, but they are told that nothing can be done until 1961. If that is the 1088 case, then very likely the farmers will instal their own power units. That would be dangerous in that it would threaten sources, possible future sources, of income for the board.
I come again to the consultative council. In an appendix to the Report are some details of the consultative council and about the sub-area committees, but why are not the addresses of the members of the consultative council published in the Report? What is published does not convey very much to anybody. It would not even to me as a Member of Parliament but for the fact that I know most of those people. One thing we could learn from a list of the names and addresses would be whether the rural areas are represented to the extent they ought to be. I put this suggestion to the Parliamentary Secretary. It requires only a message from him to the consultative council to have this omission remedied.
What is really the position of a member of a consultative council? Is he supposed to be an agent of the board? I wonder, because, to my surprise, I found certain members of the consultative council on the same platform as members of the board advocating the board's proposals involving capital contributions, whereas the job of the members of the consultative council is to defend the consumers and to speak on their behalf. It is a contradiction that members of the council should be agents of the board. They even come up against Members of Parliament. I can tell them on which side my constituents are. The members of the consultative council should win the confidence of my constituents, of the consumers. They will not win their confidence if they side with the board in putting capital contributions as a tax on villages. Members of the consultative council should be arguing in favour of the consumers whose interests they are supposed to represent.
If they have not enough work to do already—though I am sure they have a lot to do—they could do something of great importance to rural districts. They could convene conferences in districts where the consumption of electricity is low and point out to the people there, "If you want greater rural development programmes it is important that you should increase the income of the board by using more 1089 electricity yourselves." I have often found in different parts of South Wales that the amount of electricity consumption by farmers has gone up by only a decimal point or two, and they should be encouraged to use electricity more.
I hope that some of the things I have said will have the attention of the South Wales Electricity Board and the consultative council, particularly on the subject of uniformity of charges, on the subject of the position of the members of the consultative council, and on the value of the names and addresses of the members of the council being published. If possible, the names of the nominating bodies should be published, too, bearing in mind that they do not actually represent them. One would be surprised to know where some of the nominations come from.
I hope the House will accept the reports of all the boards. I myself am very proud of the great work done by the board in one of the counties in my constituency. When I first came to the House only 1 per cent. of the farms of Radnorshire had electrification. Now the majority of those farms, I am glad to say, have it. But there are still 502 out of the 562 farms in one part of Radnorshire not connected to the supply. They are not isolated farms. These are communities, and I want to see them supplied with electricity—and not by taxing chapels, churches and village halls and the farmers, though it is true that the farmers have grants by way of schemes with hill farming, livestock rearing and marginal land production.
I wish the Parliamentary Secretary every success in his winding up speech, particularly after the contributions made by Welsh Members, and I hope that we shall have replies to the points that have been raised.
§ 8.36 p.m.
Vice-Admiral John Hughes Hallett (Croydon, North-East)
I am sure that the House has listened with great interest to the remarks of the hon. Member for Brecon and Radnor (Mr. Watkins) about consultative councils. I do riot intend to follow his remarks in that direction, because I do not know enough about the work of these councils. Nevertheless, I think that it would probably be generally agreed on both sides of the House that, taking it all in all, these consumers' councils have been one of the 1090 more disappointing features in the practical working of the nationalised industries.
It is difficult to say why that should be. Perhaps there is a tendency on the part of those who are running the industries to take the line that they know already what the troubles and demands are without being told by consultative councils. However that may be, it is, nevertheless, unfortunate that so far we have not discovered a more effective way of enabling these councils to make their weight felt.
§ Mr. Hayman
Will the hon. and gallant Member make inquiries in the South-West? The consultative council there has been a very effective body. It works in close liaison with the area board, but still remains a body fully representing the interests of the consumer.
§ Vice-Admiral Hughes Hallett
If that is so, I am glad to hear it.
I had not originally intended to intervene in the debate, not because I am not interested in the nationalised industries—hon. Members know that I am—but because, unfortunately, due to another engagement I was unable to be present when my right hon. Friend the Paymaster-General opened the debate. I mention this to draw attention to the fact, to which attention hardly needs to be drawn, that few hon. Members find time to attend debates when we are discussing the details of the practical side of the working of the nationalised industries. This has been one of the things which has surprised me almost more than anything else in the few years during which I have had the honour to be a Member of the House.
One wonders what is the reason for the apparent lack of interest. After all, suggest that one reason for the nobody would question the enormous importance to the national economy of each and all of these industries. Indeed, I suppose that in the years since the war the electricity industry has, to some extent, dominated the capital investment position in the public sector.
I suggest that one reason for the lack of Parliamentary interest in these industries is the belief, supported by the precise wording of the nationalisation Acts, that there is no Minister who is directly responsible for the matters under discussion. I have never been convinced 1091 that it was wise to introduce an organisation which allowed accounts of this magnitude, dealing entirely with public money, to come before the House in such a form that no Minister is directly accountable for that money.
§ Mr. Robens
The hon. and gallant Gentleman will not forget that in recent years the House has set up a Select Committee to go most carefully into the accounts of the publicly-owned enterprises, which may account for the interest being in the Select Committee rather than in this Chamber.
§ Vice-Admiral Hughes Hallett
The fact that the Select Committe has been set up is also indicative of some of the doubts and anxieties which I have ventured to express. I was about to say that I have always held the view that in practice the Minister has a much closer responsibility for the conduct of these industries than is apparent from the wording of the statutes. After all, the Minister controls two things. First he controls, in fact if not in theory, the rate of capital investment in the industry and, secondly, he controls the key appointments. It has been argued, I think with truth, that the man who controls the appointments in an organisation in the long run controls everything.
There is, however, another and more agreeable reason for the lack of Parliamentary interest in the accounts we are discussing tonight. It is that, I think by common consent, the gas and electricity industries have been by far the most successful of the nationalised industries. In saying this I confess that I judge success by one criterion and one alone, and that is the cost of their products to the consumer. Judged by that standard, both industries come out very well indeed on the whole.
At the same time there is always room for improvement, and one imaginative suggestion forcibly brought to the notice of my right hon. Friend by my hon. Friend the Member for Kidderminster (Mr. Nabarro) was for some degree of fusion between the gas and electricity industries. That, indeed, was a suggestion which found support from the hon. Gentleman the Member for Bristol, South (Mr. Wilkins).
I was not quite sure exactly what my hon. Friend had in mind, but I take it that 1092 what he was suggesting was no more than the establishment of a common accounts department and a common sales organisation. I cannot agree with my hon. Friend the Member for Barry (Mr. Gower) who spoke afterwards, that there would be any special organisational difficulty in a move which had that limited object in view.
When the hon. Gentleman the Member for Cleveland (Mr. Palmer) winds up the debate for the Opposition I should like him to tell us why it was that this was not done when the industries were nationalised. Such a suggestion is not new and, to my mind, it has a great deal to commend it. I would myself go a little further. I believe that a strong case could be made for the much more difficult task of a degree of merger between the industries. I agree with the point made by the hon. Member for Bristol, South, that the electricity industry will probably expand in the coming years at the expense, to some extent, of the gas industry.
I know that this is controversial. I know that people deny it. None the less, I have a feeling that it will happen. If it happens, one thing we know is that any form of public undertaking has astonishing powers of resistance to being reduced in size. One obvious reason is the fear of redundancy, which is confined to no one section of the population. If, therefore, there is to be a change in the relative fortunes between the two industries, there would be a great deal to be said for having the two under a common management, so that, as men tended to become redundant in one industry, they could be given the necessary cross-training to be absorbed in the other.
§ Mr. Wilkins
What I had in mind was exactly what the Paymaster-General said in his speech. It would be a matter of policy direction from the Government, more or less instructing the industries to pursue the development which was considered to be best suited to the economy. In other words, for electricity the emphasis should be more on the side of the consumer, and for gas the emphasis should be on the use of the production of the gas undertakings for industrial purposes. I was thinking more of a policy direction.
§ Vice-Admiral Hughes Hallett
I am obliged to the hon. Gentleman. I was 1093 speaking for myself. I am not sure that we ought not to keep our minds open to the possibility of going a little further in the years ahead.
The hon. Member for Bristol, South and one or two other hon. Members raised the old question of uniform tariffs. I have never been convinced that there is a case for them. I prefer an organisation in which, as far as possible, people pay something approximating to the cost of the service they receive. There are great dangers in distorting the economy by arranging that someone who chooses to settle on St. Kilda shall get the same service at the same cost as a person who lives in the middle of London. There are certain advantages in going to remote places. Much was said about the southwest area. One pays more for coal at the extreme tip of Cornwall, but one does not have to buy so much because it is not as cold there as in other parts of the country. There is some danger in pursuing too far the craze for uniformity.
I turn to the point with which I began, the enormous importance of these nationalised industries to the country and the extreme desirability of trying to get Parliament into closer touch with them. I hope I shall not be out of order if I refer for a moment to the Measure now before Parliament to create life peerages. It has always seemed to me that one way in which the nationalised industries could be brought more closely into touch with Parliament would be to make it the custom, absolutely as a matter of course, for the chairmen of the central authorities to have seats in the Upper House. I have felt that for a great many years, long before I entered politics. I believe this Measure provides a simple means by which that might with advantage be done.
I do not wish to digress and become out of order through entering a long discourse about constitutional law, but hon. Members who are familiar with Dr. Pollard's work about the evolution of Parliament will recall that he makes the point that the Upper House has traditionally been the place where the special interests in the country are represented, and if there are any greater special interests than the nationalised industries today. I do not know them.
§ 8.48 p.m.
§ Mr. A. E. Hunter (Feltham)
I hope that I may be excused if, owing to lack of time, I do not follow very closely the 1094 speech of the hon. and gallant Member for Croydon, North-East (Vice-Admiral Hughes Hallett). I was pleased to hear him say that the nationalised gas and electricity industries have been a success.
I want to make two important points and to speak about the electrical industry. There was a good deal of public ownership in electricity before nationalisation. The municipal electricity undertakings were a great success, giving good service to the people and providing power at extremely competitive rates. If one compared the tariffs of the municipal undertakings before nationalisation with those of the private companies, one could easily see that the municipal undertakings gave a very good service indeed. We can all say how pleased we are that nationalisation has been such a success, and that, by public ownership, electrification has been carried into the rural areas.
I want to refer to two topics which have been raised in the debate. My hon. Friend the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) spoke of accidents caused by very old gas installations. I know my hon. Friend's constituency very well. In fact, I know London very well. Some large houses in London were piped for gas at the turn of the century and they are not properly inspected. A number of those large houses are divided into what are called "bed-sitters," which are really bed sitting rooms. People who live in these bed-sitters have a gas fire or a ring fire on which to boil a kettle for a cup of tea, cocoa, or coffee.
Gas boards should undertake regular inspections of those installations. My hon. Friend said that there were more than 500 deaths from gas poisoning in 1956. I hope that the Parliamentary Secretary will give us some assurance on this matter. He will find dwellings of this type mainly in London and other large cities. The gas installations are very old and it is important that something should be done about them to safeguard the occupiers of those houses from gas leaks, which often occur in the middle of the night, and the tragic deaths that sometimes takes place from gas poisoning.
The hon. Member for Kidderminster (Mr. Nabarro) spoke of the necessity of the electricity area boards pressing upon 1095 the Chancellor of the Exchequer the importance of a reduction of Purchase Tax on space heaters. Heating by electricity or gas, especially by electricity, saves coal. It is healthy and clean and less smoke escapes into the air when more space heaters instead of coal are used. The hon. Member for Kidderminster made the point that oil imports are saved and that although the oil heater container carries no Purchase Tax the electric space heater carries a Purchase Tax of 60 per cent. I hope that the Paymaster-General will press upon his right hon. Friend the necessity of reducing that tax.
I agree with the hon. and gallant Member for Croydon, North-East that the electricity industry is likely to expand at the expense of the gas industry. The competition which we had between the two before the war has, happily, now finished. There can be co-operation between the two, but I think that the electricity industry will expand, because power energy is essential for the nation, for the factories, offices, dockyards, and homes. An expansion of the industry must to some extent be at the expense of the gas industry. I ask the Minister to make sure that there is close co-operation between the two, and that when amalgamation of their functions will be in the interests of the nation he will promote that amalgamation.
§ 8.54 p.m.
§ Mr. Arthur Palmer (Cleveland)
I think that it was the hon. Member for Louth (Mr. Osborne) who referred to nationalisation as now being a dead issue. The debate has demonstrated that nationalisation is very much a live issue and it is alive in the very best way, as a matter of everyday practical administration. It is primarily for that reason that both sides of the House are considering these questions as practical people, anxious that these great industries should do their best for the nation, and it is because of that that we have had such a successful debate.
I have been impressed by the magnificent contribution made by what I might call our Celtic Members. Scotland, Wales and Cornwall have been very much to the front. My hon. Friend the Member for Brecon and Radnor (Mr. Watkins) referred with some force to the 1096 need for the consumer council representatives when appointed, to be genuinely independent and, if necessary, to fight the boards. As the hon. and learned Gentleman who is to reply knows, we discussed this issue at some length during the passage of the Electricity Bill. That point was made then and I think that my hon. Friend was quite right to make it again with his usual force.
We are discussing the affairs of these industries as Members of Parliament but I do not think that we are such political animals as to suppose that the electricity and gas authorities should be accountable only to the Minister and Parliament. The major accountability of these boards is really in their every-day dealings with the public. Yet because these industries are, of necessity, statutory monopolies—and they were statutory monopolies before nationalisation, although in a more local sense—it is essential that Parliament should discuss their affairs at regular intervals.
I agree with the Paymaster-General when he talks of the advantages of a debate in which gas and electricity are taken together. It is very valuable to consider these industries beside each other. They are ancient rivals, and it is useful that some rivalry should continue. That is where I dissent from hon. Members who took a different and more extreme view. It seems to me that the struggle today should not be so much of enemies in the old sense, but rather as competitors in the same race to supply our people, industries and agriculture with the abundant energy in all forms that preference and technique now demand.
As I say, I would prefer to keep a reasonable competition between these industries, but not to take it too far. I think that there are several good arguments for that outlook. If we combine them too much we would not have any check upon what was the true price of anything in the fuel and power industries. That would be one of the first difficulties. Secondly, we would, in the end, destroy something which is important in a democracy if we were to destroy free consumer choice.
Unlike the Paymaster-General, I am not one who talks a great deal of coordination, because it has been my 1097 experience that when people talk of coordination it is often a way of covering up the fact that they have no ideas at all. I am not making that accusation particularly against the right hon. Gentleman, but that has been my general experience in this House and outside.
The Paymaster-General asked for suggestions, and this is one that I make. Is there not really a case for trying to extend into the general consumer sphere—the domestic user and the normal commercial user—the principle of the fuel efficiency check which we have already for industry?
Is there not a case for having available in every centre of population some expert advice on relative fuel efficiencies, a sort of fuel efficiency centre which could be supported jointly by all the fuel industries, those publicly-owned and those, such as oil, in private hands? It would then be possible for the inquiring consumer to get impartial advice on the relative efficiencies of the services available locally, so that his needs could be most cheaply supplied.
That would not destroy consumer choice, for if, instead of deciding to use in his house a combination of gas and electricity—and, perhaps, oil—as advised by the efficiency service, the consumer decided to make use of electricity alone—as an electricity enthusiast I could understand it—that would be all right, but he would have to pay the true economic price. I believe that there are possibilities in such an approach in the domestic and general commercial sphere.
I was glad that my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) pointed out the undoubtedly strong feeling in the public's mind about what appears to be some duplication of consumer services, and I suggest that an innovation of the kind I have mentioned would help to remove that anxiety while, at the same time, preserving consumer choice.
I feel that both sides of the House have been very anxious today to assume that public ownership has come to stay in these industries. That is common ground. The House has also noted three things about nationalised gas and electricity. First, that they have retained that old tradition of public service which they had under private and municipal ownership— 1098 and I speak as one who worked in the past in the private supply industry. Secondly, that in spite of what the hon. Member for Louth tried to say, both are efficient and profitable. Thirdly, that, on the whole, they have very good labour relations. That is not in dispute. They may have other faults but those so often commonly attributed to nationalised industries are not to be found in these.
I turn now to the trading and price issues and hope to put to the Parliamentary Secretary a few points that have not so far been mentioned. As has been pointed out, these industries, nationally and regionally, once again show a trading surplus. Since vesting day, nationalised electricity has earned a total surplus of nearly £100 million, and it should be noted that that is the surplus after paying the full rate of interest on the general loan capital.
Electricity prices are certainly reasonable. The Herbert Committee, in fact, rather criticised the industry because, it said, on the whole electricity was sold too cheaply. It is, perhaps, a curious kind of criticism, but it was made. The point was brought home forcibly in our debate that these prices are particularly reasonable when we remember the steep increases in coal prices in the last few years.
But a point which I do not think has yet been made is that the output of both industries was lower last year compared with previous years. Certainly, electricity was 6.7 per cent. up—there was an increase compared with the previous year—but the rate of increase was slighter, because in 1955–56 it was 9.4 per cent., and about 12 per cent. during the previous year. I like to hope that it is a temporary decrease. It is probably due to a falling off in industrial activities which, in turn, is probably due to some aspects of the general financial and economic policy of the Government.
The gas industry showed a decrease in output of about 1 per cent. I consider that that marks the beginning of a more permanent decline. It may be due to weather conditions, but I think the reason is more far-reaching. I do not say that it is an altogether bad thing, it may represent a natural switchover to other fuel resources. Nevertheless, it seems evident that those in the gas industry should avoid any complacency, a point which was 1099 made strongly also by my right hon. Friend the Member for Blyth (Mr. Robens).
The industry must survive by research, by increased efficiency, inventiveness, and the rest of it. A great deal of that is being done already, but if one is to speak critically, as we are entitled to do in this debate, I suggest that those in the industry are, on occasions, a little slow.
Take the matter of the importation of liquid methane. It is mentioned in page 7 of the Gas Council's Report, where it states:At the end of the year the stage had been reached where the possibility of importing a trial cargo of liquified methane into this country could be considered.It could be questioned whether this experiment should be carried out at all, but my memory went back to a debate in this House three years ago, when the then Minister of Fuel and Power, now the Minister of Education, said, with a great flourish of trumpets, that it would be necessary to consider the importation of liquid methane about which he had recently told the House. I think that there might have been a little more progress—
§ Mr. Maudling
The hon. Gentleman and his right hon. Friend are being a little hard on the gas industry. His right hon. Friend chided the industry for dashing into a rash experiment, and now the hon. Gentleman is chiding it for going too slowly. I think that between the two the gas industry is advancing steadily—not too fast—in a very difficult, technical matter.
§ Mr. Palmer
I accept that. I am pointing out that this should not today be hailed as a novel idea, because it was being hailed in that way three years ago. Technical development should move at a greater speed.
That brings me to a point which I think it necessary to make about these industries, the fact that complacency may become a danger, even the finest kind of complacency based on legitimate pride in achievement. There is the danger sometimes of slowness to react resulting from what one might call "mental inbreeding".
I wish to ask the Parliamentary Secretary about a matter which is rarely 1100 discussed in this House. One would not wish to mention names, or disagree with any particular appointment, because that would be most unfair to the people concerned, but how are the leaders of these industries being appointed? What is the system which is followed? That seems to me a legitimate question to put.
What kind of guiding line is taken by the Minister in making these appointments? Does he always exercise his own independent initiative? I do not want to put this too unkindly, but does the "old pals' club" work on occasion? I should like to have an answer on that point. It is useful occasionally to appoint an outsider, but most of the appointments, I am quite certain the best appointments, should be made from inside the industry.
I think that it was Napoleon who said of the French Revolution that one of its greatest achievements was that it opened a career to the man of talents. He was obviously thinking about himself. It seems to me that if nationalisation of these industries was a revolution in organisation, it should also be one of the greatest achievements of these nationalised industries that they really should open a career to the young man or woman of talent. Patronage and caste should be totally eliminated from the organisations, and anyone coming into these industries, from any kind of background, should be told from the beginning that, given ability, drive, and all the rest of it the way is open to him to the very top.
To encourage stronger, more able, more independently minded leaders of these industries I should like to see opportunities given to them to travel, to pick up good ideas in other countries—I do not mean going round in parties, like a lot of penguins—but individual travel with a definite straightforward mission and with a set task to perform.
The Parliamentary Secretary may tell me about the educational schemes of the nationalised gas and electricity industries. I know them very well. I know the great practical work that is being done already but it is a question of spirit in these things. I do not imply any reflection in what I have said upon the present Minister, or upon those excellent people who are running these industries. I am merely drawing attention—and I think that it is 1101 reasonable to draw attention—to the danger of a little too much complacency and too much, as I have said, "mental inbreeding" in successful public utilities.
I was glad to hear the Paymaster-General's remarks about investment policy, and that there was not to be, in the long term, any real cut back in the nuclear power programme, because the very existence of our country, undoubtedly, as a great industrial power, depends for the future upon building up an adequate energy basis.
It was the present Home Secretary, I think, when he was Lord President of the Council, who said that it would be possible to double the standard of living in twenty-five years. If it is to be possible to do that, it really means that in about the same time we have very nearly to double the output of energy. In fact, if it had to be done by coal alone, it would mean that by 1980 or 1985 a total coal output of 400 million to 420 million tons. Obviously, that cannot be obtained on the most optimistic expectation—no one would seriously suggest it—and, therefore, we must come back to oil and principally, of course, for the future, to nuclear fission.
This is a long-term issue and whatever the curious phrase "rephasing" may mean, I think that we on this side of the House are glad to know that the nuclear power programme is to be proceeded with, in the ultimate, on the lines suggested in the White Paper on investment, earlier this year.
The hon. Member for Kidderminster (Mr. Nabarro) who usually makes a rude speech—though sometimes his speeches are less rude—today made a speech which was rather more rude, but it was not directed againt this side of the House—in fact, he seemed to get quite a lot of applause from this side—but against his right hon. and hon. Friends.
§ Mr. Nabarro
There was nothing rude about the observations I made about my right hon. and hon. Friends on the Treasury Bench. They might have been highly critical, notably of the absence of the Paymaster-General.
§ Mr. Palmer
Shall we say they were "robust," then? I was going to say to the hon. Member that it really is no good his telling us that the electricity supply industry is over-capitalised, that it has too much plant installed and that the 1102 margin in hand will be too great for the future. That seemed to be his argument, which means that he is prepared to risk, in years to come, the possibility of increased prices and of load shedding once again—
§ Mr. Nabarro
The hon. Member must not put words into my mouth. I did not say that the industry was over-capitalised, or had too much plant. I said exactly what his right hon. Friend the Member for Blyth (Mr. Robens) said; I drew attention to the falling power-load factor, I attributed reasons for it and I called for a remedy.
§ Mr. Palmer
I am sorry that the hon. Member was not in the Chamber when his hon. Friend the Member for Pollok (Mr. George) spoke. It was clear that the answer on the power-load factor point does not depend on the electricity supply industry, but upon a change in national habits. That will improve the load factor and nothing else. It is, therefore, fantastic to attach blame to the electricity boards.
§ Mr. Nabarro
I did not say that, and I was careful about it. The hon. Member must clearly recall that I did not attach any blame whatever to the heads of the industry or to the industry itself. I attached the whole blame to Ministerial policy. I made that clear in my speech.
§ Mr. Palmer
I still make my point. The matter goes beyond Ministerial responsibility, even as judged by the debate today. It ranges over the whole field of national life and national activity. I thought also that the hon. Member for Kidderminster was a little unfair—at least, his hon. Friend the Member for Pollok made this point and it may be that I misrepresent the hon. Member for Kidderminster again, but I hope not; I must read his speech tomorrow—when he criticised the low thermal efficiency of power stations. It is well known that the thermal efficiencies of power stations are inherently low, but British thermal efficiencies are equal, I think, to those of most industrial nations. The new power station that is to be completed soon at High Marnham, in the Midlands will be thermally one of the most efficient power stations in the world.
I come now to labour and human relations. I said just now that it was generally accepted that there were good 1103 labour relations in the nationalised gas and electricity industries. The reasons are probably three: first, that conditions are good; secondly, that there is, as in public utilities generally, reasonable security and pension rights; and thirdly, to which I have referred already, the old-established tradition of being respected public servants.
All those factors contribute to good labour relations, but, contrary to some assumptions, I do not think that it can be argued seriously that wages and salaries are particularly high in either of these industries. That has always been true of public utilities, but there is this feature about salaries and wages in the gas and electricity industries—they are negotiated through a complicated system of collective bargaining. There is a high development of the collective bargaining system and that system is based largely on the Whitley model. Some of the earlier negotiating councils that were set up in the electricity industry and in the gas industry originated soon after the start of the Whitley experiment at the end of the First World War.
This point has been raised privately with me and others by trade unionists in the industry. I use that expression to cover trade unionism not only among manual workers, but among the staff as well. They have a fear that what has happened in the Health Service may be used as a model for Governmental interference in negotiations in the nationalised industries. The Parliamentary Secretary may well reply that there is no such intention and, also, that it would not be possible for his noble Friend to do it because of the Section in the nationalisation Acts, which appeared again in the Electricity Act, 1957:It shall be the duty of the Generating Board and each of the Area Boards to comply with any agreement concluded in pursuance of subsection (1) of this section.I have no doubt the hon. and learned Gentleman will give that kind of assurance and point out, also, that his noble Friend has no power to interfere in this way, but he should remember that if there are suspicions on this matter in the electricity and gas industries, which respect their own habit of collective bargaining, it is sometimes because of speeches made and Questions put on the 1104 Order Paper by his hon. Friends. We are not objecting to such speeches or such Questions, but I think there was a Question yesterday, for instance—I do not know whether it was actually asked—which demanded ministerial intervention to control wage and salary increases in the nationalised industries for which the Minister of Power is responsible. In those circumstances, it is not unreasonable to ask for some assurance that the Government have no intention of interfering with the properly established system of collective bargaining in these industries?
In addition to negotiations over wages and salaries, there is a highly developed system of joint consultation on a national, district and local basis. That consultation is over health, safety, welfare, education and efficiency matters. There is also a great deal of informal consultation, sometimes directly, between the boards and the trade unions.
Recently, a very big change has been made in the electricity supply industry because of the coming into effect of the new Electricity Act on 1st January next. It seems likely that as a result of that Act certain changes will be made in the organisation of the generation side of the industry. It would be of great value to the employees of the electricity supply industry if they could have an assurance that before those changes, which may affect their working lives quite considerably, are made there will be the fullest consultation in future, as in the past with the trade unions first.
As my right hon. Friend pointed out earlier, it must be remembered that Lord Citrine—whose moving away from the post of leader of the electricity industry to part-time membership of the Electricity Council, which perhaps has become inevitable with the passing of the new Act—was a great pioneer in and enthusiast for joint consultation. It would be a good thing to know that his lead will be well maintained in future.
The last point I want to make is one which is, I think, fully in keeping with the general spirit of our debate. Evolution and change are a law of life. Nationalisation is not an end in itself, and evolution and change must go on in industries after nationalisation as before.
§ Mr. Maurice Macmillan
May I take it that this is an expression of opinion 1105 from the Opposition Front Bench that nationalisation is no longer a point of policy?
§ Mr. Palmer
The hon. Gentleman really should not misrepresent me, not so soon after I have spoken, anyhow. I said that nationalisation was not an end in itself; it has other, general social purposes.
The nationalisation of an industry does not mean that change and evolution will not have to continue afterwards, as before. Pride can be taken in achievement, but abuses still have to be checked and mistakes corrected. I believe that our debate today has played a part in that vital and natural process.
§ 9.27 p.m.
§ The Parliamentary Secretary to the Ministry of Power (Mr. David Renton)
One of the most serious defects of nationalisation is that, at the end of a six-hour debate on the Annual Report and Accounts of at least one industry—today we are discussing two—an unfortunate Parliamentary Secretary has to stand up and answer a mass of detailed points, some of them on very technical matters, at the same time trying to pretend to the House that he has shown an intelligent appreciation of all the general trends displayed in the debate. One should place on record, as has been done before, that it really is an almost impossible task to give satisfaction.
So far as the general trends in the debate are concerned, I would say that they have been as follows. First, there has been a desire expressed on both sides of the House that these two industries, like other power industries, should make the best use of our national resources. That, in the main, means coal, and in the present context of affairs, making the best use of what at present happen to be very plentiful supplies of low-grade smalls.
It seems to me that both the gas and electricity industries have good long-term plans for making use of greater quantities of low-grade smalls, but their plans are essentially long term. I do not wish to embark upon a discussion of the coal situation, but—as I said at Question Time yesterday—the fact that the plans are long term need not depress us, because the stocks are meanwhile very useful indeed for meeting the possible needs of a cold winter.
1106 As my right hon. Friend the Paymaster-General said in opening the debate, there is no certainty that we shall have large surpluses of low-grade smalls in years to come. We have to remember that the Central Electricity Generating Board has a very large programme for building new conventional power stations over the next five years. The programme includes 22 new stations, 22 extensions of existing stations and five occasions when there will be a doubling-up of capacity. Altogether, that will need a coal equivalent of another 20 million tons of this coal. We can, therefore, say that in the long term the electricity industry at least will be making a great contribution towards using to the maximum extent our national resources of coal.
What about the gas industry? As has been mentioned in the debate, up to the present the industry has had as its slogan, "The gas industry makes the best use of the nation's coal." With great respect to all engaged in the gas industry, I would say that that slogan today would more accurately be that "The gas industry makes the best use of the nation's best coal." For the future, one hopes that in the light of what has been said today, the gas industry will do its best to make more use of some of the nation's worst coal. As my right hon. Friend the Paymaster-General pointed out, the gas industry has plans, which will take a little while to come to fruition, but sound plans nevertheless, for hydrogenation by the North Western Gas Board, for the Lurgi plant in the West Midlands and for making larger use of low-grade smalls in Scotland.
My hon. Friend the Member for Halifax (Mr. Maurice Macmillan) wanted to make sure that we were thorough in making the best use of our own resources. He asked what is happening about waste and slurry from the coalmines. The South of Scotland Electricity Board already has plans for an increased use of slurry from the mines. The use of slurry from coal mines is, however, economical only when it is available in fairly large quantities and without a very long transport haul. That is why it has not so far been practicable to use it in England. I also understand, however, that the possibility of its use has not escaped the attention of the Central Electricity Generating Board. I 1107 should also point out, in answer to my hon. Friend the Member for Halifax, that methane drainage from coal mines is going ahead at a considerable pace, especially on the part of the Wales Gas Board, to whose efforts tribute was rightly paid by Welsh and other Members today.
It can, therefore, be said that the two industries are doing what they can to make the best use of our own resources. That does not mean that we should slavishly refuse to consider whether these two industries and the nation's power resources generally cannot be helped by the discriminating use of particular imports and, for example, the use by the gas industry of some quantities of fuel oil and of diesel oil at carbonisation plants to help out with the peak demand. I should have thought that this was both useful and sensible.
In the same way, the decision has been taken to experiment with imports of liquid methane. The right hon. Member for Blyth (Mr. Robens), in what was a most interesting speech, described that as a luxury experiment. When one looks back one sees that there have been a great many experiments which appeared to be luxuries when they started, but which became necessities when they had been proved. This may well be an experiment which proves a very successful one.
It is already known that the economics of it are very attractive indeed, and that if the technical, practical difficulties can be overcome there is a very good chance of the gas boards being able to get much cheaper gas than they have ever enjoyed before. Of course, as has been so often said in this House, we have to look ahead, and my right hon. Friend made it abundantly plain that when looking ahead it was right to err by providing too much power than too little. It is in the light of that consideration also that I would ask the right hon. Gentleman to regard this experiment.
While talking of developments in the gas industry I come to another matter he mentioned about the gas grids. He asked whether, when the area boards have completed their grids, which is not yet done, for there is still a long way to go, there will be any possibility of a national grid and whether there will be the legal powers for it. The answer is that the legal powers are most certainly there, and it 1108 will be a matter for the gas boards, meeting together in the Gas Council, to decide, and no doubt, if necessary, to approach my right hon. Friend for authority for the capital expenditure. Then it will be necessary to consider the matter in the way these matters always are considered.
The most probable need for what I would call an inter-area board gas grid would be for one from Wales to London. The Wales Gas Board with its mass of coke oven gas is likely to have a very large exportable surplus at some time in the future. Possibly London or the Midlands are the places where one may consider that surplus being used, so the beginning of a national grid might merely be the linking up of South Wales and London or the Midlands.
A technical point which should not be lost sight of is that if we did have such a grid on a long distance basis then the size of the pipes and the pressures behind them might have to be very much larger than those of the ordinary area board grids.
That is the first theme which appears to have run through the debate. The second one is that there should be closer co-operation between gas and electricity boards. I hope that we can take it as agreed, in the way that most hon. Members have expressed it, that on both sides of the House we shall continue to welcome the competition, the genuine rivalry, between boards. As my right hon. Friend pointed out—if I may say so, rather forcefully—the reason why the gas industry has been spurred on to make its new development is that it was faced with competition from electricity, with its ever-increasing demand, and if it had not made the efforts which it did the gas industry might have gone under. Therefore, we welcome the competition.
We also welcome the freedom of consumer choice which is a concomitant of that competition—if that is not too terrible a phrase. We are anxious to preserve that freedom of choice. I hope we can agree about that on both sides of the House.
It has been suggested—I think the suggestion falls into two parts—on both sides of the House that there should be a bit of co-operation between gas and electricity at the retail end and, perhaps, a saving in administrative services. Hon. 1109 Members have given examples of ways in which that might be done.
The hon. Lady the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) suggested that showrooms might be joined together. An hon. Friend, interrupting my hon. Friend the Member for Kidderminster (Mr. Nabarro), suggested that the very expensive electronic computing machines which are used for accountancy increasingly these days could be made the subject of general use. These are attractive suggestions which will be examined. My noble Friend is not in favour of eliminating competition between the two industries, but he is in favour of a careful look being taken at these possibilities of co-operation.
The hon. Lady the Member for Holborn and St. Pancras, South also suggested something in the form of a consumers' service. Here I would utter a word of caution. That suggestion is much more easily spoken of than worked out in practice, more especially when one is providing a consumers' service for the sale of products of two industries which are to remain in competition. If we were to set up an entirely impartial service we should have all the difficulties of financing and staffing and so on. A much more fruitful line of approach would be simply to see whether we can cut administrative costs at the retail end of the boards' activities, and my noble Friend is anxious for such inquiries to be pursued.
The next general trend in the debate was one which, quite candidly, I hope with all humility to correct. It was not widely expressed, I am glad to say, but it was summed up in the words of my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett), who said that the electricity industry would expand at the expense of the gas industry. With great respect, I do not think that that is the right way to look at it.
Undoubtedly the electricity industry will expand, but so will the population and our other industries, and our standard of living will rise. I see no reason why the gas industry should not obtain some increase in business from that expansion. It obviously cannot hope to have anything like the expansion in future which the electricity industry will have, but to say that it might remain static 1110 or will necessarily go down would be to give a false impression.
So much for the general trend of the debate. Now, if the House will bear with me in the time that remains, I must try to answer the many detailed points made in the debate. The hon. Member for Cleveland (Mr. Palmer) asked what was the system by which my noble Friend appoints members of the boards. The answer is that he appoints the best men that he can find, after taking advice. The hon. Member will recollect that in the electricity industry, in which he is so keenly interested, the majority of the full-time members of the boards and of the new Electricity Council and the Generating Board come from within the industry.
I think that it is right to say that members of the Electricity Council and the Generating Board will be responsible for administering the Electricity Act, 1957, about which the hon. Member for Cleveland asked me a question on a matter of interpretation relating to negotiations for wages, joint consultation and other matters. My answer is that I am certain that both my noble Friend and the Chairmen of the Electricity Council and of the Generating Board will wish to observe the Act both in letter and in spirit.
I have answered the various points raised by the right hon. Gentleman the Member for Blyth in dealing with more general matters. My hon. Friend the Member for Kidderminster asked about Purchase Tax on electrical and gas appliances, and other hon. Gentlemen mentioned the point also. My answer is that it is no part of my duty to poach on Treasury preserves, and I shall not do so tonight.
§ Mr. Nabarro
Will my hon. and learned Friend permit me to interrupt? This is at least the fifteenth time I have listened to that explanation being made by the Treasury Bench in the last three years. The Financial Secretary to the Treasury, who is sitting there now, was the last culprit to tell me seven months ago that the anomaly was under consideration. When are we likely to get some results?
§ Mr. Renton
I hope that my hon. Friend enjoyed his interruption. My hon. Friend seemed to threaten me personally 1111 with another Private Member's Bill. So far I have welcomed his Bills and have tried to help him with them, but I should want to see the next one before pledging myself to support it.
The hon. Gentleman the Member for Bristol, South (Mr. Wilkins) referred to the considerable accumulation of stocks of gas coke and to the prices at which they are offered. I would remind him that the prices at which they are offered is a matter for the commercial judgment of the boards concerned, and the size of the stocks may have something to do with their commercial judgment. Meanwhile, we can rejoice that those stocks are there, for two reasons: first, because we are at the beginning of the winter and we do not know what kind of a winter it will be; secondly, because we are on the threshold of the implementation of the Clean Air Act, and coke will play an important part in it. It is better that we should start the implementation of that Act with large stocks of coke than with small ones.
The hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock) referred to what, being a lawyer, I must call an alleged nuisance from a power station chimney in her constituency. This is a matter on which my right hon. Friend the Minister of Housing and Local Government has decided to hold a meeting to be attended by all concerned—representatives of his Ministry, the local authority, and the Central Electricity Authority, in order to consider the matter carefully. I cannot tell the hon. Lady more than that I feel we should await the result of that meeting, and I hope that it may prove useful.
The hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman), who is not in his place at the moment, raised a matter of hardship of a minor financial kind which can arise through abuses over pre-payment meters, and I shall be interested to look at that point.
As was mentioned by the hon. Member for Cleveland, there was sandwiched in the debate a welcome incursion by those who come from the Celtic fringe, and rural electrification loomed large in the course of that. In particular reference was made to the South-West of England—
§ Mr. Renton
I am trying to discuss rural electrification in the South-West of England and in South Wales.
I would draw attention to the fact that it was just those two parts of England and Wales which had most need for rural electrification during the year under review and which got the most farms connected. I will not weary the House with the details at the moment, but I propose to send them to the hon. Gentlemen concerned so that they can see what tremendous headway has been made.
The hon. Member for Brecon and Radnor (Mr. Watkins) asked once more if there could be a Welsh—totally Welsh, I understand—electricity board instead of Wales being divided into two boards and the northern one being linked with Merseyside. The Herbert Committee considered that suggestion and came to the conclusion that it was not the best way of dividing the electricity areas, but nevertheless suggested that there should be several Welsh-speaking members on both boards, and in making appointments since then to the Merseyside and North Wales Electricity Board and the South Wales Electricity Board the need for Welsh-speaking members has been borne in mind and several have been appointed.
I do not pretend to have answered all the points which have arisen in the debate.
To conclude, there was a stage of the debate at which the right hon. Member for Blyth claimed that such successes as were on record on the part of these two industries were due to nationalisation, and he accused my right hon. Friend of trying to score a party point when he said how well the electricity industry had done in rural electrification in the last few years. Perhaps we can call it quits, having in mind that nobody will ever be able to tell—because at the time of nationalisation the yardstick was, so to speak, burnt—whether the successes and, such as they have been, the failures of the nationalised industries have been because of nationalisation or in spite of it.
I do know, however, that there are people of all shades of political opinion giving loyal and faithful public service in these industries, and I think they will be glad to know that in this House we do 1113 not consider that the affairs of the industries should be the subject of hot party dispute.
§ Mr. Nabarro
The right hon. Member for Blyth (Mr. Robens) raised a question in connection with power generation, of the falling load factor, and I greatly enlarged upon it. Nothing whatever has been said in the course of my hon. and learned Friend's reply in response to the legitimate criticism from both sides of the House on the fundamental and crucial issue of the wastage of capital resources inherent in the falling load factor. This is not a party political point. Surely my hon. and learned Friend is guilty of a grave omission in his reply to the debate in failing to have some regard to the valid observations of the right hon. Gentleman, so strongly reinforced in my speech.
§ Mr. Renton
I am very grateful to my hon. Friend for reminding me of that omission. It is true that the right hon. Member for Blyth complained of what he alleged to be the falling load factor.
§ Mr. Renton
Yes, the right hon. Gentleman drew attention to it—it would not be in him to complain on this occasion—and so did my hon. Friend the Member for Kidderminster. I am advised that it is all a question of which way the load factor is measured. There are two ways of measuring it. If it is measured in relation to maximum output capacity, the point made by my hon. Friend the Member for Kidderminster and by the right hon. Gentleman is valid, but if it is measured in relation to what is known as maximum demand, which is the equivalent of peak load demand, then the point is not so valid, because measured in that way the load factor has improved during the year under review as compared with the two previous years.
The best way to measure load factor is something which electricity economists will hotly dispute. As has been said, there are limitations on the extent to 1114 which the industry itself can control demand. One of the ways is in the sale of retail appliances, but I do not want to start on that subject in answering my hon. Friend the Member for Kidderminster, because I know that he feels strongly about it and has been kind enough to keep quiet about it on this occasion. At any rate, we have not ignored what the hon. Member has said. I do not fully agree with him, but at any rate we were interested by some of his remarks.
§ Mrs. L. Jeger
The Parliamentary Secretary has made no reference to the fears expressed by more than one hon. Member about the serious increase in cases of coal gas poisoning. I know that he had many questions to answer, but can he assure us that the attention of his noble Friend will be directed towards the very great public anxiety at the increasing number of these fatalities?
§ Mr. Renton
Yes, indeed. This matter has engaged the attention of the Gas Council and my noble Friend a good deal in recent months. Unfortunately, there is nothing I can say to the hon. Lady which would be of value at this moment, except that this matter is engaging our attention.
§ Mr. Robens
The Parliamentary Secretary has not referred to what I said about the nuclear power programme.
§ Mr. Renton
With great respect, I purposely did not take up those points—I spoke for nearly half an hour. I listened very carefully to what my right hon. Friend the Paymaster-General said and I think that he dealt with that matter in great detail. If the right hon. Gentleman will read that speech tomorrow, he will find that my right hon. Friend dealt with all the points which the right hon. Gentleman mentioned.
§ Question put and agreed to.
That this House takes note of the latest Annual Reports and Statements of Accounts of the Gas and Electricity Industries.