HC Deb 01 July 1959 vol 608 cc569-82

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]

8.27 p.m.

Mr. Arthur Palmer (Cleveland)

I am sure that we have had nearly enough of nuclear energy for one day, but I hasten to assure the Parliamentary Secretary that it is merely a coincidence that we have to continue to discuss the subject on this day, as I am sure he knows. I also cheerfully confess that this is a formidable subject for an Adjournment debate. That was my expectation when I thought that we would have only the usual half an hour. It happens that we have rather longer, but it still remains a formidable subject for an Adjournment debate.

However, I am raising this matter of the development of the British nuclear power programme because I feel that the life of this present Parliamentary Session is running out, as is the life of this Parliament. In those circumstances, I think it right to amplify the viewpoints which I have recently been able to put at Question Time. In doing so, I hope that the Parliamentary Secretary will acquit me in advance of any hostility to the nuclear power programme as such, or any desire artificially to protect any other energy source. I am anxious that Britain should pursue a fuel and power policy which will make the most effective use of all our available primary energy resources. I am prepared also to accept that in a trading nation that cannot exclude fuel imports.

I am prepared not only to accept that as a basis but to argue that true cost must be the normal measure of effectiveness. I know the point has often been made by the Government in defence of their activities in fuel and power matters that they are obliged to work on true cost. I am prepared to accept that as common ground, with the proviso that it is genuinely true cost and not some kind of estimated, ascertained or hypothetical cost.

My concern, and it is shared by some expert opinion, is that if the present fuel investment policies are not looked at rather more critically than the present Minister appears to be doing, they may result in us paying considerably more for our electricity, which is the accepted universal medium of secondary energy in the years ahead than we might otherwise do. In short, I am afraid that if we are not careful with our fuel investment policies we may have rather dearer electricity than might otherwise be the case.

Some years from now that state of affairs might well be brought about by us having invested too much, too hastily, in high cost nuclear power stations which must, as the Parliamentary Secretary knows, be run on the base load of the national electrical demand, thus forcing the lower cost coal fired power stations to carry the varying part of the load under perhaps increasingly uneconomic conditions.

I hope it will be accepted that the figures now available—and these are of course available in the hon. Gentleman's Department—show the conventional power station, whether it be a conventional coal-fired or oil-fired power station, to be a still developing and improving instrument for the making of electricity. That is most important, because it is all too easy to suppose that once a new technique starts existing techniques automatically wither and die.

There are some examples in technological history of that happening. I suppose the classical example is the way in which the stagecoach disappeared very quickly with the advent of the railway engine. However, the aeroplane has been with us for a long time, and those of us who travel on the roads know that the motor vehicle as a means of transport is certainly not withering or disappearing.

When one is thinking about new techniques, one must be careful not to fall too easily into the error of thinking that the older techniques will stand still. In power production in fact the old techniques may on occasions be stimulated into fresh activity by the coming into being of the new ones.

I yield to none in my admiration for the intellectual qualities of those gentlemen who are often referred to as "the nuclear knights". I say with great respect. The phrase was used by the President of the Board of Trade in a recent debate and will therefore soon become immortal, but I can claim to my pleasure a more than "nodding acquaintance" with one or two of these gentlemen.

But there is always a danger that even the most reputable and important scientific men may overrun themselves and not count the cost. That is why I am glad that Sir Christopher Hinton has moved from the Atomic Energy Authority, where he did such fine work, to the more commercial atmosphere and practice of the Central Electricity Generating Board. He has moved away from an authority which, in the matter of its funds, is largely a direct charge upon the taxpayer. He is now chairman of the Central Electricity Generating Board whose business it is to make sufficient electricity for the country, and to make it as cheaply as possible.

The change of position of Sir Christopher has already brought a new realism to nuclear discussions. In the Axel Johnson lecture which he gave in Stockholm in 1957, when he was still with the Atomic Energy Authority, he said that nuclear power could hope to be cheaper than coal-produced power by 1965. That was a very important international lecture, the report of which had a wide circulation. Just a month or so ago, at Torquay, at the British Electrical Power Convention, I was present to listen to Sir Christopher admit that he had been wrong in his estimate and that the break-even date could not now be before 1970 at least.

One reason he gave was the falling capital cost of conventional power stations. It is a remarkable fact that in spite of the increase in the cost of labour and materials in recent years the cost of conventional power stations has stood still, in money terms per kilowatt installed, and is now showing a tendency to fall. Sir Christopher Hinton recognised that as one of the reasons, and said that it could now be expected that there would be a stabilisation in the price of coal. Until recently it had been assumed by most people that the price of coal would continue to rise, but that is no longer the case. There is not yet much suggestion that it will fall, but there is reason to believe that with the improved position of coal supplies in relation to demands it will at least stabilise.

I suggest that the earlier figures, which have now proved to be wrong, were the ones which allowed the present Minister, in 1957, to revise the nuclear power programme in an upward direction. It was advanced from the proposal contained in the 1955 White Paper, that we should aim at 2,000 megawatts of nuclear power by 1965, to the proposal that we should aim at 5,000 or 6,000 megawatts. There were then other objective reasons for the change. There was the continuing coal shortage, and also the discovery that it was possible to build rather larger nuclear power stations more economically than smaller ones. Techniques had already improved to allow that to be done.

Among the consortia of engineering firms there was naturally some commercial concern for an increase because they had invested a vast amount of capital and wanted to see that there was plenty of work ahead. No doubt all those factors were in the mind of the noble Lord when, as Minister, he made that decision. But just now I used the word "allowed" deliberately; I do not believe the Minister would have allowed the increase to come about unless he was convinced that the cost figures given to him at the time made it economically sound.

It has now been accepted that those figures have been falsified by the march of events. I am not saying that this is the fault of anybody. There were too many unknowns in the equation—the matter of the comparison between the expected future cost of nuclear fuel as against the cost of coal, for example. It was thought that the price of coal would go up steadily, and it was also thought that the price of uranium would probably come down rather rapidly. That was based on the assumption that we should gain quite a lot extra financially from the value of the plutonium credit. As the Parliamentary Secretary knows, that has not been the case. If anything, the price of uranium and all associated with it in the matter of its use as a nuclear fuel is not showing as much a tendency to fall as was once assumed.

There is also the matter of interest charges. One must remember how much capital is involved in electrical power production. At the time when this thing was first planned, in 1955 at any rate, the average rate of interest was, say, 4 per cent. Now it is about 5½ per cent., which has made a tremendous difference to the economic balance. Though cheaper from the point of view of immediate running costs, the capital cost of a nuclear power station is excessive indeed when compared with that of a conventional power station.

I have said that in my view this was the fault of nobody in particular, but it is certainly the responsibility of the Minister in general. I appreciate his dilemma. It must be extremely difficult for a Minister, when surrounded by many experts, to know just which way to turn. At Question Time recently I suggested to the Paymaster-General that the Generating Board, if it could have its way, would now perhaps prefer to have a rather smaller nuclear power programme. The Paymaster-General answered that no advice had been given to the Ministry by the Generating Board. I must accept that because it is not for me to say. But I hope it will not be forgotten by the Ministry—I hope the Parliamentary Secretary will not mind my mentioning this—that under the Electricity Act, 1957, it is the Electricity Council which is the advisory body to the Minister. The Council more fully represents the whole of the electricity supply industry and the Generating Board is a component.

The Council is strong in the representation of area boards to whom we must look for effective competition with oil in the matter of energy sales, and oil is becoming an increasingly effective competitor. I am trying to hint tactfully that the point of view of the whole of the electricity supply industry, both wholesale and retail, must be taken into account, rather than allowing the over-keen technological enthusiasts to have their own way all the time. We must preserve a sense of commercial reality.

I should like to develop my general argument further, but I am sure there is a limit to what the Parliamentary Secretary can endure at this time in the evening and I think there is a limit to the amount of cruelty which I can inflict upon myself.

I shall bring my case to a close by putting these points. I accept that we are so far committed to the present nuclear programme that it must be completed. There is no doubt about that. Looking back in retrospect things might have been a little different, but we are not able to make any change at this stage, and the ten or twelve stations now planned for 1967, which includes the Hunterston Scottish station, must, of course, be completed. It would be most disheartening to all those who have worked so hard in the matter of planning design and construction of these stations if there were any setback, and I think that it would be very bad for the prestige of the country. The present programme must, therefore, go ahead.

We must also accept that the earlier forecasts of really cheap power from these stations are not likely to be realised. That should be understood. We must also accept that the improved cost outlook for conventional power stations and the improved coal supply position are factors which should not be ignored. I appeal, therefore, to the Parliamentary Secretary to represent to his noble Friend the view that the post-1965 nuclear power programme must be thought about very carefully indeed.

It may be, of course, that by 1970 or 1980, or whatever ultimate date has been suggested, the whole of British electricity supply will go over to nuclear fission or even part nuclear fusion, if at that time the ZETA project begins to yield results. But when we talk about some date remotely in the future for the complete change-over of the electricity supply system of the country to nuclear generation, it can only be on one condition, that at that time it pays us to do so. I should have thought that was a qualification which it was most important to make.

Other countries are obviously proceeding with caution in this matter. They realise, as we must all realise, that nuclear techniques are changing all the time and that we are only at the beginning of the road. They certainly do not wish to be caught out with a lot of capital tied up in the wrong designs. The West European countries are also now paying increasing attention to their heavy surplus stocks of coal and thinking about the possibilities of oil coming, perhaps fairly easily in a few years at a very low price, from the Sahara. Therefore, they are not rushing ahead over-fast with nuclear development. They are prepared to do a little, of course, and to co-operate with the Americans to a certain extent. I wish that they were more ready to co-operate with this country in the matter of nuclear development, but, at any rate, they are extremely cautious. I shall be very grateful to have the comments of the Parliamentary Secretary on these observations which, I assure him, are put forward in the most constructive and intended helpful spirit.

8.50 p.m.

The Parliamentary Secretary to the Ministry of Power (Sir Ian Horobin)

Although we have rather more time than we might have had, I am sure that the hon. Member for Cleveland (Mr. Palmer) will agree that this is not the occasion for too large-scale a development of this fascinating and important problem. As I think he knows, my own interests, looking back to my Cambridge days, have always been in the realm of nuclear physics, and I am sure that I can echo his references to the outstanding contribution which British men, I think one can say of genius, have made in this field, both in the theoretical and practical development of nuclear energy.

I am glad that the hon. Gentleman did not introduce what he had to say, as recently some of his right hon. and hon. Friends have tended to do, by saying that we must consider the nuclear programme from the point of view of a rescue operation on behalf of the coal industry. He was very careful to say that that was not his approach, and I am sure that he was right in so doing.

It is important, however, that we should not go from one extreme to the other in this matter. There was a time—though I do not think responsible people ever took this view—when, to judge from some of the popular newspaper presentations, the day was only just round the corner when the whole power industry would be revolutionised by developments of this kind. Now I sense a tendency for the pendulum, as so often happens, to swing to the other extreme, and to suggest that the whole thing is an unfortunate mistake and completely miscalculated, and that it is rather a pity that we cannot liquidate the whole affair. That is an even more disastrous misconception of the position.

I believe that one can be most helpful in a short speech, which is all that is appropriate, by trying to bring some of the facts up to date. I agree with everything that the hon. Gentleman said, that nobody can be dogmatic, least of all when one is trying to look into the 1980s and 1990s towards the millennium. We can only go on what are the best calculations and assessments of the extraordinarily able men who are concerned with this subject. They do not all agree, but one can take an average and use one's judgment to the best of one's ability.

First, what is the latest state of play, so to speak, in the cost comparison between conventional and nuclear stations? At present, a bracket of between .50d. and .65d. per unit sent out would be a fair assessment for conventional stations. The variation depends on siting and other factors. For nuclear stations of what are now regarded as the conventional type, the most recent figures would be between .65d. and .70d.

Here I would draw attention to the fact that the statement that nuclear energy today is 40 per cent. more expensive than conventional power is due simply to comparing the cheapest possible coal with the dearest existing nuclear energy. That is quite an unfair comparison. In this country one cannot find enough sites left where a large river with enough cooling water flows past a large and efficient modern pit with twenty or thirty years of coal available in it.

It is almost certain that in any case, as years go on, even if there were no nuclear power, some conventional coal stations would have to be sited far from the coal fields. Therefore, it is quite unreasonable and gives a wrong impression simply to take the cheapest coal and compare it with the dearest nuclear power. One can do no more than give a rough and ready calculation because, as I say, the circumstances vary.

One has to consider the growth in demand for electricity, much of it around London. One has to consider both the cost and also the amenity aspects of stringing yet more long transmission lines acros the country to meet demand in, say, south-eastern England from a conventional power station sited on a coalfield in the Midlands, and so forth. It would be more accurate to say that, at present, about 15 per cent. or, possibly, 20 per cent. difference in costs separates the two types of station.

Those figures, again, can easily give a false impression. They are based on the cost of units sent out from the station. But one must not give anyone the impression that nuclear production would mean electricity 15 per cent. dearer for the consumer. It would be nothing like that at all because, of course, the percentage increase in the cost which the consumer pays, which has to carry all the costs of transmission, and so forth, would be very much less than that. Indeed, at the present moment, if one said that it was half that, that would probably be an overstatement.

In a full debate, one could, of course, elaborate on the situation at present, but I will leave it there now and come to the years which are immediately to follow. I am not now dealing with the distant future but with the next ten years. It is said that the price of coal is more stable, and this, happily, is true. However, the price of coal has risen by over 70 per cent. during the last ten years. Would anybody really suggest that it was realistic to base policy on the idea that, in twenty years, coal will not be 5s., 6s. or 7s. a ton dearer than it is now?

One must hope that that will be the case, but I think that many people in the industry would have to consider very carefully the implications of such a basis of policy. It might mean a very drastically reduced production of coal so as to concentrate on the more efficient and cheaper pits, or, if one wanted to keep something like the same kind of scale in the industry as we have now, having regard to its cost structure, there might well be other implications. I do not think that anyone can really say that we could base our policy with any certainty on the price of coal remaining absolutely stable during the next twenty years.

On the other hand, of course, there will be some quite definite savings on the nuclear side. I am not now talking about changes of type. I am assuming that we go on building, as it were, more Calder Halls. The hon. Gentleman mentioned the price of uranium. This was one of the few parts of his speech which I did not quite follow. It is far more likely, in my humble opinion, that the price of uranium will fall when the present contracts run out than it is that the price of coal will remain absolutely stable over the next twenty years.

What I put to the hon. Gentleman is that a quite small but by no means impossible increase in the price of coal over the next twenty years, with at least one quite probable reduction in the price of the raw material for the nuclear stations, will mean that the present disadvantage of about 15 or 17 per cent. against nuclear energy will very probably be further reduced. That, of course, is only the beginning of the story. That is merely to say that, in trying to develop this great new industry, we have not started on something which shows a hopeless and uneconomic comparison between nuclear production and conventional production.

To consider the problem simply as a comparison between certain stations and their possible alternative from coal is to misconceive the situation. This programme was not embarked on on the basis that it would immediately save money by generating electricity in this new way. It was embarked on on the basis that somewhere in the later 1960s the fall in the price of generating by nuclear energy will cross the line of the cost of generating by coal. That situation remains true as far as anyone can estimate it. It is arguable whether it is likely to be 1965, but few people would say that it will be as late as 1970. It may be 1967, 1968 or 1969.

It is essential that we should bear in mind that we are not talking about whether electricity generated by nuclear processes will become cheaper than electricity generated by coal. All that we are discussing is whether it will take place in the first part of the later 1960s or the second half. I have gone into the point very carefully with all the instructed authorities in the country. We have obtained all the advice that we can get, not only from the Central Electricity Generating Board and Sir Christopher Hinton, but from the A.E.A. No one disputes that within the measurable future generation by nuclear energy will become substantially cheaper than by coal.

No one will be dogmatic about this point. It may shift a year or two one way or the other, but I do not think the hon. Gentleman or anyone else can point to a recognised authority—there is certainly no advice about it available to the Government—which would deny that in the not too distant future it will be more economic to develop—

Mr. Palmer

I accept all of what the hon. Gentleman is saying, but he will appreciate that the argument is to get correct balance in time in the amount of investment, particularly in relation to the types of nuclear power stations.

Sir I. Horobin

I was coming to that point. If we are right in setting to work to build up an industry capable of developing these new sources of scientific power, it becomes clear that we cannot chop and change on short-term considerations.

The British nuclear programme is a very carefully considered whole. No one will say that the industry will not make mistakes in future, although we have been remarkably free from them hitherto owing to the skill of those concerned. However, it is a carefully balanced whole. We must avoid at all cost making the mistake, which has been too frequent in British development in other spheres, of having a whole series of drawing board types—even, if I may use the analogy from the aircraft industry, a whole series of brilliant performers at Farnborough but not enough squadrons.

Provided that we have, broadly speaking, developed on right lines, we must back our fancy, as it were, pick what looks like a promising type and then get the best out of it. If we wait for perfection, we will wait for ever. There will never be a time when we will be able to say, "We have now at last found for certain the very best perfect type ". We have gone into the matter as carefully as possible We thought that in the light of the experience available in the A.E.A. and the Generating Board, that what we broadly call the Calder Hall type has several years of valuable development before it.

That is not the end. About 1961, it is hoped that the advanced gas-cooled reactor will become critical, and it is quite possible, if it is successful, that by about 1965 the first commercial type will be in operation. After that, we have to consider the fast breeder reactor now being developed at Dounreay, and the other, with which we have close relation- ships, in the United States. It may be of interest to the hon. Member that during the next month or two it is expected that Dounreay will begin a period of low-power testing. The work so far done has been exceedingly successful and, if all goes well, by about 1970 we may hope that that type will come in. It has, of course, exciting possibilities, not only because of its great cheapness in capital cost but also as part of the balanced programme. By that time we shall have produced a substantial number of the Calder Hall type of station, all producing plutonium—and one of the problems will be what to do with it. Of course, the breeder reactor type gives great flexibility and, therefore, is all part of a carefully-designed plan of development. The point that I am trying to make is that we are not putting all our eggs obstinately into one basket. In this country, we cannot do what the United States has done—perhaps the hon. Gentleman has seen at Idaho what I can only describe as the "reactor zoo", containing every conceivable type of reactor. Were we to spread our resources in that way, or were we to wait until someone else had produced the perfect answer, we should practically be abdicating from this field.

Therefore, we have, first, a type of plant that is reasonably economic, and which, although never expected to be at once as cheap is not seriously dearer, and shows signs of becoming comparatively less expensive. We have a carefully chosen next stage that we hope will begin to come in in a few years and, beyond that, we have the breeder reactor. I am not dealing with the possibilities of fusion because, from a commercial point of view, that is far too far ahead.

If that is the position, what we have to consider is not, so to speak, an individual station but an industry as a whole capable of developing in an orderly fashion such as I have tried to describe. I put it to the hon. Member, and I hope that it will commend itself to the House and to the country generally, that our primary consideration now—subject always to the fundamental brainwork of the A.E.A. and the consortia—should be a healthy nuclear industry.

We therefore have to bear in mind—partly as a result, as the hon. Gentleman himself pointed out, of the consortia themselves producing between them a situation where it became possible to build very much bigger stations than anyone had originally thought of—that there are only about half a dozen more stations—I do not tie myself to one figure or another—to come into the present programme.

We cannot afford to run any risk of completely unbalancing the structure of the industry by interfering with that programme, and I think that the hon. Gentleman indicated that he accepted that that was so. After this programme is completed it will be necessary to make further decisions, but there is no need for them to be made now. Urgent preliminary consideration is, of course, being given to the subject, but no final decision need yet be made. The stations that will be built in the 1966-67-68 period will not require to be finalised for another twelve months or two years—

Mr. Palmer

I am trying to look ahead. The decision will have to be made by this or a successive Government, so one must be thinking of these things.

Sir I. Horobin

As I say, we are giving these questions great thought, but no final decision needs to be made at present.

One of the biggest considerations, of course, will be decided well in advance of that date, and that is, how the advanced gas cooled reactor prototype works out. I agree entirely with the hon. Member that great thought must be and is being given by the Generating Board, by the Electricity Council, by the A.E.A., and by the Ministry; but we are committed, as it were, for the next year or two, broadly speaking, to the type of programme and how it is to be carried out. It must not be, it cannot be, thought to be interfered with.

We have a period—not a long period, I agree, but a period—in which we can in a careful fashion in the light of our success or otherwise—I hope, our success, particularly in connection with the advanced gas cooled reactor and the progress at Dounreay—make up our minds what we will do in the years after 1965, but I think it is very important that everybody should realise that a nuclear programme on the scale of this country's must be a long-term, carefully-balanced programme and cannot be interrupted by fits and starts and lurches in response to short-term considerations. We are not concerned, as I said before, primarily with exact calculations whether a particular station would be rather cheaper one way or another.

We have to take a big view of this. We are entering a new field in which Great Britain has already made for itself a leading position. In fact, it is not too much to say we are not just a major civil nuclear Power: we are the major civil nuclear Power. Long may we remain so. The need for thought and care in investment and design is great. We are entirely with the hon. Member in that, but I do hope we may have the support of informed Members such as himself on the other side of the House to resist at all costs any injudicious interference with the proper development of that programme either in order to come to the rescue of alternative sources of supply or in an effort at economies which we may live to regret.

Question put and agreed to.

Adjourned accordingly at thirteen minutes past Nine o'clock.