§ 30. Mr. Warbeyasked the Minister of Power what interest rates are assumed in his calculation that electric power will be generated as cheaply in nuclear power stations as in stations fired by fossil fuels by the year 1967; and by what year he estimates parity would be reached if interest rates were lowered by 1, 2 and 3 per cent., respectively.
§ Mr. GeorgeNuclear power for base load generation is not expected to become competitive with conventional generation until about 1970. The interest rate assumed by the Generating Board in calculating the future costs of electricity is 5½ per cent. Other things being equal, a reduction of 3 per cent. in the rate of interest might advance the date of parity by about two years.
§ Mr. WarbeyCan the Parliamentary Secretary say why he disagrees with the estimate of Sir John Cockcroft that parity 23 should be achieved on the present basis and present interest rates by 1967? Secondly, do not the figures he has given in the last part of his Answer show that the archaic methods of calculating amortisation of capital on high interest rates are delaying the coming of cheap energy to this country?
§ Mr. GeorgeI would not personally dream of dissenting from what Sir John Cockcroft said, but we are working on the best advice available to the Government in estimating for 1970. As to the second part of the hon. Member's supplementary question, on high interest rates, his proposal would infer the granting of a subsidy by the Government to this industry, which has the highest natural increase in demand of any in the country, and that proposal is wholly unacceptable