HC Deb 08 June 1959 vol 606 cc769-82

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

10.17 p.m.

Mr. J. Grimond (Orkney and Shetland)

We have all too little opportunity to discuss any nationalised industry in Parliament. Indeed, these industries were brought under public control before there were any plans for exercising that control effectively. Until some other system of running these industries is devised it is the duty of Members of Parliament both to examine the performance of those industries and to represent the views of our constituents concerning them. It is desirable to give publicity to what those industries have been doing and intend to do, and in cases such as electricity, where there are difficulties for some people who require it, to discuss the help that should be given. I want, therefore, tonight to discuss electricity in the North of Scotland and to give the Government an opportunity of explaining what form that help can take.

An Adjournment debate is an inadequate way of doing this, but it is the only way open to a backbencher. Therefore, I am taking this opportunity to say something about the North of Scotland Hydro-Electric Board and its recent Report. From that Report it seems that the Board has completed the development of about one-quarter of the estimated usable water power resources in the Highlands. Presumably, therefore, the Board has calculated that the remaining three-quarters can be developed economically. It is noticeable, however, that the Board already shows a deficiency of revenue of about £724,000, which includes a loss of about £112,000 for the past year.

As people in the Highlands are greatly interested in the future development of the Board, my first request to the Government is that they should tell us how they see this future developing. Do they envisage the remaining three-quarters of the water potential being harnessed? Do they consider that this can be done profitably, and is it still the intention to give every Highland district a supply of electricity?

Obviously, I have not time tonight to go into the Board's operations throughout the Highlands. However, it is worth putting on record that it is still active and that it is both bringing in new sources for the production of electricity and new schemes for its distribution.

There is one scheme in particular about which I should like to ask a question, and that is the scheme for the use of peat at Altnabreac. One of the curiosities of nature which emerges from the Report is that, although 1958 was an abnormally dry year over most of the Highlands, it appears to have been an abnormally wet summer at Altnabreac. This interfered with the drying of peat. Is the Board now rather pessimistic about the results of this scheme, or does it think that it can develop ways of using peat which could be useful in other parts of the Highlands? In many parts of the Highlands—indeed, in some parts of my own constituency, in Shetland—there are large unused deposits of peat. Does the Board hold out any hope of being able to develop them in places like Yell?

There is in the Report some reference to industry. It will be remembered that when the Board was set up it was hoped that bringing cheap electricity to the Highlands would encourage industry to move up North at the same time. Unfortunately, this hope has not been fulfilled. I cannot this evening get on to the subject of Highland development in general, but if the Government have any plans for its development it is extremely important that the question of electricity should be taken into account.

I come now to distribution. This is what really worries people at present throughout the outlying areas of the Highlands and Islands. Their worries fall under two heads: first, when will those districts, houses and holdings still without electricity get it; and, secondly, what will they have to pay?

I must speak largely about my own constituency, because that is what I know about. But my experience can be paralleled by every Highland Member. I have more questions about electricity than any other single subject.

I should like to start by saying that the Board has done a remarkable job. I, and I am sure most people in the Highlands, would give unstinting praise for a great deal which it has achieved. In particular, I should like to place on record my appreciation and that of my constituents for the work of the Board's staff. The Board's representatives have a difficult job. They have to meet all sorts of demands and fend off various criticisms. They do not control policies, which are laid down by the Board, but they have to try to hold the balance fairly between different would-be consumers.

Certainly, in Orkney and Shetland the Board's representatives have done this with great skill. I have always met with both courtesy and efficiency from the local representatives. Further, we should remember the maintenance work done in the Highlands, and done often in very difficult conditions of cold and gale. If I appear, therefore, to be a critic—a reasonable and friendly critic. I hope—of the Board's policy, I am not unmindful of its achievements and difficulties.

Following up my general question about the degree of future expansion of the Board, I should like to ask some specific questions about Orkney and Shetland. In Orkney, there are certain pockets on the mainland still unconnected. A very high proportion of the mainland is connected, but there are certain farms and groups of farms which still want electricity. For instance, there are parts of Deerness St. Ola, Sandwick and Harray. In Shetland, the Northmavine and Mossbank schemes are nearly, if not quite, complete, but there is no electricity in Eshaness.

In Shetland, I am told that there are only 40 or 50 houses on the mainland which would take electricity and have not got it, apart from such districts as Eshaness, where there are no schemes at all, which is a remarkable achievement. Naturally, the people who have not got electricity are very concerned about when they will get it. Among the consumers not yet connected are many on go-ahead and highly productive farms whose activities are greatly hampered by the lack of electricity. There is also, in Sandwick, in Orkney, a public hall that has been hoping to get electricity for many years.

There is a feeling in some parts of my constituency that electricity has been brought to other places more inaccessible and less productive than the excellent County of Orkney, where, as I say, many excellent farms are still dependent on oil lamps. In fact, some of my constituents have been heard to wonder, when they look round the West Highlands, whether a determination to help oneself and to add to the national wealth is always adequately rewarded.

Apart from the mainland, there is the question of the outlying islands. I must impress on the Government and on the Board how important it is to demonstrate that these are not forgotten, and how important it is to demonstrate, further, that they are not being put off to an indefinite future. Some of the islands have excellent land, but they are being steadily depopulated, and amongst the causes of the depopulation is the lack of such things as electricity. A demonstration by the Hydro-Electric Board that it is determined to help these communities would have a great effect. Here I must remind the Government and the Board that under the original Act the Board was charged with the duty of supplying electricity to all ordinary customers.

I have a feeling that the Under-Secretary of State may refer to what is known as the Calor gas scheme. It is true that that has its advantages, but I must say at once that, as I understand it, this scheme was always intended to be a temporary stop-gap. My constituents were assured that its introduction did not mean that they would never get the light. Any attempt by the Government or the Board to represent this scheme as an alternative to electricity will have the most depressing effect, and will spread considerable gloom in the outer Islands of both Orkney and Shetland.

The Government know that I think that a great opportunity was missed when the Board and the Admiralty failed to make use of the plant at Lyness for civilian purposes, but we have been told that we may expect the joining up of Shapinsay. When is this likely to happen? And what about islands like Yell and Whalsay, both of which are big and prosperous? Incidentally, can the Government assure us that the Board has examined the possibility of using local generators? I have been told that they are not economic, and that ultimately all the islands will be joined up to supplies by cable, but it will be interesting to have it on record that investigation has been carried out and that the latter is considered to be the most economical method—if that is so.

I want to say a word about the charging system. I have always criticised the present system and its predecessors. I believe that it was a mistake on the part of the Board to put such heavy charges on to those who were given electric light under later schemes. Under earlier schemes, a great many people—and the majority of those near the main centres—were joined up free to the main transmission lines. Then costs rose, and under more recent schemes heavier and heavier charges have been made.

Any local manager—and this is certainly confirmed by Mr. Walls and Mr. Stephen—will say that the charge schemes have led to a considerable amount of trouble. In my view, it would have been fairer to raise the charges over the whole area rather than to put the extra costs so heavily on those who came in late. I admit that the Board has had to face very heavy extra expense—I should be the last to deny that—and, of course, even with these charges, the Board suffers loss when it joins up isolated farms or crofts. The fact remains, however, that these charges arc an extremely serious matter for many people in the North.

I could give endless examples of complaints and questions that reach me. For instance, nine farms in St. Ola, in Orkney, want electricity. One, half a mile from the distribution line, has been asked for £380, and many farms have to pay heavy sums. Small crofters in Shetland have been asked to pay hundreds of pounds, which they cannot afford. I understand that the latest terms for the connection of new customers from diesel generating schemes are based on a contribution of 28 quarterly payments—which vary according to the number of rooms in the house, or the number of arable acres—together with 28 line rental payments.

On a farm of up to 50 acres, I understand that the total payment for each of 28 quarters is £10 17s. 1d. which, over the period, adds up to a very considerable sum for a small croft to meet. The domestic charge on a house of up to five rooms is £3 9s. 7d. per quarter for 28 quarters, and the prices rise if holdings or houses are bigger. I should like to know whether these charges, which take the place of the guarantee which I think is asked under the hydro-electric schemes proper, are equivalent to the charges in the rest of Scotland. To many people these charges mean that they cannot afford electricity at all. As I say, I do not want to suggest that there is not a genuine difficulty here. If, as I think, a mistake was made in the first place, as I think there was, by putting so much expense on the late-corners, the question is: what can be done now? What can the Government suggest?

The Board has suggested to the Government that some assistance in the installation of electricity in scattered areas should be given, as is now given in Scandinavia. Have the Government any response to make to that proposal? If not, have they any alternative to suggest? As far as I know, assistance to some extent can now be obtained under two schemes. The county councils, under the Housing Acts, can give a grant if a man wants to have his house brought up to an adequate standard in every way and, in the process, installs electricity and wires his house. But what this grant can he stretched to cover seems to me a little doubtful.

Further, assistance can be obtained under the Livestock Rearing Act for farmers or crofters who get a comprehensive scheme approved. I think that these methods of assistance should be more widely known, and I would urge people faced with heavy charges for electricity to examine them closely. But there is no doubt that they do not meet the whole difficulty and, indeed, not by any means all the people who would like to have electricity can qualify for these grants.

Particular sufferers seem to be the small crofters and owner-occupiers of buildings for which comprehensive schemes are not feasible. I would ask the Government to consider whether this assistance can be extended to certain categories of people now excluded, and possibly be made to cover the heavier costs of laying the lines from the main transmission cable.

Another difficulty which has arisen in the Highlands is over the agreement of people in an area to come into a scheme when it is proposed. In Unst and in certain parts of the mainland of Shetland I have had representations from people whose crofts have not been joined up to the light because of the refusal of their predecessors or neighbours to say they will take it. This causes a certain feeling of injustice.

I am far from blaming the Board entirely for this situation, but I would urge the Board to give its local representatives every encouragement to explain and advise most fully their intentions and the cost, and see that these matters are properly understood, so that the people are not given too optimistic or pessimistic a view of the likelihood of light coming. I think I can say that in Orkney and Shetland the local managers do their best in this respect. Nevertheless, there are these complaints and there is often failure to understand what is involved in a particular scheme. Some people have complained that they have wired their houses at great expense and then have found that they cannot get the light.

I dare say that the Government will say that most of these points should be taken up through the consultative council. I have no desire to criticise the council. I know that the local representatives in Orkney and Shetland do a difficult job. But as long as the chairman of the council, who is meant to bite the Board, so to speak, is himself a member of it, the public will not have any great faith in its independent judgment. It is not fair to people on the council that they should be expected to act as watchdogs of an organisation with which they are so intimately connected.

I trust the Government tonight will give us as much information as possible about the future intentions of the Board, and that they will be able to give rather more comfort than the last time when I raised this matter to the justifiable anxieties in many parts of the Highlands, lest the people who have not got light are excluded from the benefits of electricity either by the slowing down of future work or by excessive charges.

10.34 p.m.

The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)

The House will be grateful to the hon. Member for Orkney and Shetland (Mr. Grimond) for choosing a subject for this debate which is of interest to all Members for rural constituencies, and particularly to those in the North of Scotland. It is a subject in which he has taken a particular interest.

I am sure that the House would like me to start by making a reference to the right hon. Thomas Johnston, formerly a distinguished Member of the House, who is to lay down the chairmanship of the North of Scotland Hydro-Electric Board at the end of this month. As Secretary of State, Mr. Johnston was the architect of the Hydro-Electric Development Act, 1943, and to a large extent he has been responsible for the work of the Board that has been carried out so far.

No fewer than 34 hydro-electric power stations built since the war, another 14 under construction, and supplies of electricity carried to 90 per cent. of the potential consumers in the Board's district are an indication of the achievement of the Board under his chairmanship. Today, the Board's reputation in the Highlands stands very high. As the House knows, Mr. Johnston will not end his connection with the Board after this summer for the Board has asked him to continue his efforts, in conjunction with it, to attract industries to the Board's district.

I need hardly say that this arrangement has the very warm approval of my right hon. Friend the Secretary of State. I am sure that all Members will wish to take this opportunity of expressing appreciation of the services of Mr. Johnston and wish him success in this important work. Also, I know that the House will wish to say to Lord Strathclyde, the Board's new Chairman, that he enters his new responsibilities with the confidence of all those Members who knew him here.

As the hon. Member said, the Board has done a remarkable job. He paid a tribute to the local representatives, with which all on this side would wish to be associated. To quote the last Report of the Board, it has carried the benefits of electricity to more than 90 out of every 100 people in its area. I am informed that the proportion of persons connected is even slightly higher in the Highland area proper, that is, in the seven crofting counties, than it is in the rest of the Board's district.

In view of the great physical difficulties and the great expense of providing electricity in that area, this is a very creditable achievement. Indeed, it is partly a measure of that achievement that the demand for electricity from those areas which have not got it—the 10 per cent. that is left—is so pressing. I can well understand why people in those districts, seeing how much the Board has done, expect that they too should be able to share in this amenity. But I would say to the hon. Member that, if the Board were to accept his invitation and give a demonstration in one island, it would be very quickly chased to carry that demonstration into many other islands, also.

The House will understand that, for the most part, the areas which are still to be connected are just those areas where the provision of electricity is most difficult and most expensive. What are they? They fall broadly into two categories. First, there are those areas where distribution schemes are already in hand or planned. These distribution schemes are well scattered over most of the Board's district. In the hon. Member's constituency, they include, on the Shetland mainland, the area from Voe to Moss Bank, which he mentioned, and from Delting to Hillswick and North-maven; and on the Orkney mainland, the districts of Deerness, West Birsay, Sandwick, Heddle and Stenness.

As the hon. Member said, work is well advanced at Moss Bank, and he will be glad to know that a start is to be made any day now at Deerness. It is not possible for me to say exactly when supplies will be provided in all the other districts for which distribution schemes are planned, or in what order; but, broadly speaking, I hope—and it is a hope, not a promise—that most of them should be provided with electricity within the next four years. The Board has indicated its intention of discussing this problem of the rural consumer and its future plans with the Secretary of State in the near future.

These distribution schemes, together with new connections elsewhere—as in new housing schemes, for example—should bring in an extra 16,000 consumers in the whole of the Board's district, and the proportion of potential consumers who will then have supplies will rise from the present 90 per cent. to about 93 per cent.

Of the remainder, there are some, probably in the region of 10,000 who, for one reason or another, either do not want a supply or live in premises unsuitable for connection. That leaves about 12,000 potential consumers, mostly people living either in very remote communities on the mainland or on islands where there is no distribution at present to which they could be linked and no convenient or obvious source of supply. Supplying such islands, therefore, means not only carrying out a distribution scheme, but also providing means of generation, perhaps by installing a special diesel generator, as the hon. Member suggested, or by connecting one island to another by an undersea cable.

Which is done depends to a very large extent on the remoteness of the island. I will refer to the question of costs later, but the House will appreciate that giving supplies of electricity to these very remote areas is bound to be a very costly business indeed, as well as involving technical difficulties. The average cost now is £500 per connection. Of course, this is tending to rise as we do more and more of the less difficult tasks.

This brings me to the second matter which the hon. Gentleman has raised, the question of connection charges. When the Hydro-Electric Board was first formed, in 1943, it was its intention to connect consumers without charge or guarantee if they were located within reasonable distance of the main distribution lines.

Before I deal with the point, I should like to deal with the question the hon. Gentleman asked about potential water resources in relation to potential demand. In 1944, a list of possible schemes was prepared, and in that the estimated annual output was 6,274 million units. There are already in operation schemes with an average output of 2,293 million units. These schemes, together with that under construction at Loch Awe and the other schemes at present under construction and being surveyed, amount in all to about 4,000 million units, which is just under two-thirds of the original estimated potential. As against that, demand has been increasing in the North of Scotland district at a rate of about 10 per cent. per annum.

The hon. Gentleman asked about the experimental station for peat. The latest information I have is that the testing of this plant and its auxiliary equipment was entering its last stage and the commissioning tests were expected to take place before the end of this month. Until the preliminary work has been completed in this excellent peat area I should not like to forecast whether or how the lessons learned from that scheme would be carried out in practice in the islands or elsewhere.

On the question of charges, the Hydro-Electric Board, as the hon. Gentleman mentioned, at first intended to connect consumers without charge if they were located within reasonable distance of the main distribution lines. Since then the Board's district has increased and costs have risen steeply, and, accordingly, it has had to alter its policy of free connection and to arrange for new consumers in outlying areas to make some contribution towards the cost of connecting them to the electricity supply. The figures which the hon. Gentleman quoted for Orkney and Shetland accord with my information for new group schemes. Of course, the figure of £3 9s. 7d. and line rental combined seems a lot, but if my arithmetic is correct it works out at just over 9d. a day for seven years; and that is not for ever.

I am glad that the hon. Gentleman gave publicity to this matter. He asked whether these charges were equivalent with those of other parts of the country. They are roughly equivalent, but the difficulty is that if we did as he suggested should have been done—if one were to spread these charges over the rest of the North of Scotland district—they would not then be equivalent charges for connection, simply because the distances in the Highlands are so much greater. Connection charges as opposed to tariff charges are bound to be higher. Any Government subsidy, as the hon. Gentleman knows, would require legislation.

The burden of the suggestions that the right hon. Member has made is two-fold: first, that the process of electrification should be speeded up; and, secondly, that connection charges should be reduced. I will deal with those two points.

I should make it clear that decisions on this question are matters for the Board and not for my right hon. Friend or the Government. The Board has certain powers and duties and is responsible for carrying them out, subject only to general directions. The power of general direction does not enable my right hon. Friend to instruct the Board in what order connections should be made, or what charges should be levied for connection or supply. Nor would it be reasonable to give a general direction that would conflict with any of the obligations that are laid upon the Board by statute. That would clearly lead to an impossible situation.

It has never been seriously thought that the Board would supply electricity to absolutely everyone in its district. Its Act limits its responsibilities in this matter to providing supplies of electricity "so far as practicable", and what is practicable includes counting the cost. This has always been perfectly clear. The reason why the Board has been able to do so much uneconomic work, including uneconomic distribution work, and including 15 islands apart from the mainlands of Shetland, Orkney, Lewis and Harris, is the margin of profit it makes from the provision of relatively cheap electricity. But the Board is obliged to run its undertaking so as to avoid making a loss, and, therefore, there is a limit to the amount of uneconomic work it can take on and still meet this obligation.

The provision of supplies to these remote rural areas and particularly to the islands is, as I have said, a very expensive business and the Board will only be able to undertake it as when its financial resources are sufficient to carry the additional losses. Its expenditure on new distribution was £2.45 million in 1958, and it is expected to rise to £3.1 million in 1959. About one-third of this expenditure is for new rural development. But for every additional expenditure of £1 million, the Board has to face servicing charges alone of about £160,000 each year thereafter.

That is apart altogether from generation costs, yet most of the new distribution would have to be on the islands where there are no hydro-electric schemes and power is provided from diesel plants. The Board's Report shows that diesel electricity costs two and a half times as much to produce as hydroelectricity—1.7d. per unit compared with 0.7d. Yet the tariff is almost the same, so there is an initial disadvantage to the Board of about 1d. per unit sold in the diesel areas. These are difficult obstacles to overcome, and as the House is aware, the Board have at present an accumulated deficit——

The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at thirteen minutes to Eleven o'clock.