§ Not amended (in the Standing Committee), considered.
§ 8.15 p.m.
§ The Secretary of State for Scotland (Mr. Michael Noble)
I beg to move, That the Bill be now read the Third time.
I should like to thank the House for the generally favourable reception which the Bill has received. As hon. Members know, its purpose is to increase from £135 million to £175 million the statutory limit on the amount of borrowed money which the South of Scotland Electricity Board may have outstanding between now and the end of March, 1965. As my hon. Friend has explained, the reason why 31st March, 1965, has been chosen is that the Electricity (Borrowing Powers) Act, 1959, is due to expire on that date.
The Bill has been discussed in detail in the Scottish Grand Committee, and probably the main criticism of it has been that it does not go far enough and that some limit higher than £175 million should have been prescribed. I hope that we have been able to satisfy hon. Members that during the period with which the Bill is concerned—during the next two years or so—this increase of £40 million in the borrowing limit is a reasonable one, based as it is on the best estimate that can be made of what the Board's requirements for external finance will be.
As my hon. Friend explained during the debate on the consideration of the principle of the Bill, a substantial programme of expenditure is involved, including an extra £24 million on generating stations, £11 million more on transmission and £16 million more on distribution, and I hope that we have been able to satisfy hon. Members that a sizeable proportion of this programme represents new investment which the Board will undertake in the next two years and which has been made necessary by the growth in demand for electricity in the south of Scotland.
I know that some hon. Members feel that the Government should be encouraging the Board to embark on a more ambitious programme, and, in 509 particular, that new coal-fired stations should be built now in order to make use of the material resources in the industrial belt of Scotland and to provide employment for men in the mining industry. I should like here to make one observation on this question. The commissioning of a power station takes time. The station at Kincardine, for instance, was approved in 1955 but it was not until more than three years afterwards that the first set was commissioned, while the last of the five units which will go to make up the station is not expected to be in operation until some time next year. Similarly in the case of the station now being built at Cockenzie, while my consent to the project was given towards the end of last year, it will be another four years yet before the first of the four 300-mW sets is supplying power to the grid. Essentially, therefore, these generating stations are long-term projects.
But, as I have explained, the South of Scotland Electricity Board is planning its programme a number of years ahead, and as part of this programme it is considering how best to meet the level of demand to meet the situation which is expected to exist after the Cockenzie station has been completed. In this connection, as hon. Members have been informed, the Board is awaiting a consultants' report, and I should like to repeat the assurance that has already been given to the House that when the Board comes to submit its proposals for this station we shall take full account of all social and economic factors involved, including the effect on the coal industry.
I would further make the point that the financing of this new station takes us well beyond 31st March, 1965, and the period covered by this Bill. I hope that hon. Members will not belittle the importance of the additional power the Bill confers on the South of Scotland Board. The Bill has been reported to the House without Amendment and I commend it as a Measure which will enable the Board to carry though its programme of development in the next two years and assist it in its objective of providing efficient electricity service to the public it serves.
§ 8.20 p.m.
§ Miss Margaret Herbison (Lanarkshire, North)
The Secretary of State hoped that he had satisfied us about the provisions of die Bill. I am sorry to say that he has certainly not done so. He said that the Bill had not been amended, but it was quite impossible for us, because of the financial provisions, to move any Amendment. The discussions had to take place on each Clause as a whole.
We welcome the additional £40 million. We know that it will be put to very good use by the Board, but at this stage we still feel that the extra money is hopelessly inadequate for the needs of electricity in Scotland. We shall not oppose the Third Reading, however, because we want the Board to be assured at least of this amount of money.
The Secretary of State has pointed out what a long time-lag there is between consent to a project and when one gets electricity from it. That time-lag could be shortened considerably if there were a real desire to do so. The right hon. Gentleman mentioned the coal-fired station. Those of us who come from mining areas are very concerned about this. It is at this time that a decision should be made on another coal-fired station.
No reasons adduced by the Secretary of State tonight or by his colleagues during Second Reading and in Committee have led us to believe that it is not of the greatest importance that a decision should be made now. But it is impossible for the Board to make such a decision on its own. The right hon. Gentleman knows only too well that the Board is bound completely by Government decisions in the White Paper on the Financial and Economic Obligations of the Nationalised Industries. Even if the Board had the greatest desire to build another coal-fired station, it would be impossible for it to do so because of lack of finance.
The right hon. Gentleman has told us the plans of the Board. I wish to put some questions to him. They were also put during the Committee stage. We are convinced that if we are to get the expansion of industry which Scotland desperately needs then we shall have to have a far greater programme for the supply of electricity than is envisaged in this Bill.
511 Can we take it that the Secretary of State has resigned himself to the fact that Scotland must always have a high level of unemployment? In November the total was nearly 94,000 and possibly the figure for this month will be even higher. If he is resigned to the fact that the Government just do not have a clue to the solution of Scotland's problem of unemployment, it may well be that the provisions of the Bill are adequate for the kind of Scotland that he and the Government envisage.
To us, however, the provisions are hopelessly inadequate for the Scotland we envisage. Even if the Government stay their full term—heaven help Scotland if they do—there is no doubt that when the election comes we will have a British Labour Government with a policy that will bring work to our good Scottish people.
We are concerned about that in this Bill. We are concerned that the South of Scotland Electricity Board should have the financial means now to plan for the great expansion of industry which will come with the next Labour Government. It is because of the inadequacy of those means that we are so highly critical of the Bill.
Today I put a Question to the Minister of Labour asking him what had happened to the miners from two pits closed in my constituency this year. About 200 men from these pits are still without jobs in an area where the majority of the men on the unemployment register have been on it for a long time, some of them for years. Those 200 men are in a hopeless position. My hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) put a Question today about what was happening to miners in his area who had been put out of work, not by any action of the National Coal Board or through any Government pressure on the Board, but because of a fall in a shaft. The figures which he was given were frightening.
It is evident that if a decision is not made almost immediately by the South of Scotland Electricity Board, more and more Scottish pits will be closed. I imagine that, before deciding whether to close a pit, the Coal Board considers Scotland's future needs for coal. If it 512 were decided to provide another coal-fired power station in Scotland, the Coal Board would be able to keep pits open in the knowledge that the coal would be needed. Although the Secretary of State says that there is a long time between consent and a project actually producing, the fact that a decision had been made would show the Coal Board what prospects there were for the sale of coal in Scotland.
Last night I listened to an account of the social difficulties caused by the almost enforced migration of our miners to coal fields in England. I was horrified to find that some of the houses being built by the Coal Board will be in completely isolated communities. It is bad enough to lose one's job in Scotland, but it is far worse to be taken to an area where one has to live in an isolated community, as too many of our miners and their families have had to do. All these things worry those of us who are deeply concerned about the kind of lives which our Scottish people want to live.
In Committee we were given figures to show that if this decision were taken immediately, it would mean work for 10,000 miners, not a number to be sneezed at with Scotland's present unemployment. The Electricity Board is tied hand and foot by the Government's control of its finances, and I ask the Secretary of State to reconsider his approach, even at this stage. If it is necessary to bring in another Bill, I assure him that we will pass it gladly and quickly. Our only hope for Scotland is to ensure that everything is done now to prepare for the big expansion of industry which I know will come in the future.
§ 8.33 p.m.
§ Mr. Cyril Bence (Dunbartonshire, East)
I make no apology for intervening in this debate on a very important Bill to finance the power base of modern industry. The power base in Scotland is lower than it should be, although it may be adequate for what is there now.
I was frightened last Thursday by a letter in The Times from Professor Jewkes. I believe that Professor Jewkes is a famous economist at Cambidge or Oxford—one of those mediaeval institutions with their origins in the Middle Ages but still existing in the twentieth century. Professor Jewkes suggested 513 that it might be a good thing for people to move south. He thinks that when an area has decayed there should be opportunities for its population to migrate to areas which are always to the south. When I read that, I thought that it was a shocking thing to say in 1962, because history tells me that Neanderthal man was nomadic. That was 6,000 years ago. He exhausted an area. He created a desert and moved on to another area which he cultivated. He again created a desert in that area, and moved on once more.
§ Mr. Deputy-Speaker (Sir Robert Grimston)
Order. The purpose of this Bill is to increase the borrowing powers of the South of Scotland Electricity Board. We are getting a little far from that.
§ Mr. Bence
I am coming to the point, Mr. Deputy-Speaker. In support of the argument of my hon. Friend the Member for Lanarkshire, North (Miss Herbison), I am saying that the provisions of this Bill will not provide the power that we need far expansion but will provide only that amount of power in keeping with further contraction. I am pointing out that 6,000 years ago contraction was necessary because of cultivation and exhaustion of resources. With the coming of the pastoral age, in which I hope we are still living, people were prepared to sustain the area in which they found themselves. We are prepared to do this in Scotland. There are 5½ million people in Scotland, and we think that there ought to be many more. Too many people have left, and we think that the reason for their leaving is that the power base is not big enough. There is not sufficient power to sustain them.
We know that a lot of Scotland has been despoiled, as has the North-East, but we believe that we have sufficient scientific and technical knowledge in the area to warrant us staying there and not leaving it to be despoiled any further. We think that this can be done by providing new forms of power of which electricity is one, and I never thought that in the twentieth century a famous professor of economics would suggest that we should adopt the nomadic tactics of Neanderthal man. I think that as we are living in the pastoral age we should control our resources and emu- 514 late what has been done in the Tennessee Valley in America. They built it up under a new deal and created an area of prosperity, and I believe that this is what we should do in Scotland.
The South of Scotland Electricity Board has been made responsible for providing £l1 million out of its internal resources. I have no objection to an economic organisation, or a business organisation of any kind, providing money out of its savings to create new forms of wealth. This is sound economics. It is sound policy for individuals, and for society, but it is not sound policy if limitations placed upon the institution which is being asked to perform this function inhibit it from using its resources to the maximum to provide those savings. This is what has happened in the electricity industry.
The electricity industry in this country is the greatest success story of State enterprise in the twentieth century. Let us make no mistake about this. This fact will, I am sure, be acknowledged by everyone in the country. I believe that its success could be immeasurably greater if it were in a position to manufacture and contract for the installation of all these resources which it has done more than any body in the country to make people here appreciative of, and conditioned to.
I said this on Second Reading. I am one of those fortunate married men whose wife is a member of an association started by the Board in Scotland. I think that it is called the Electrical Association for Women. Its purpose is to educate housewives how to mend a fuse. In a modern all-electric house it is terrible to arrive home and to find that there is no power simply because a fuse has blown. If a wife knows how to mend a fuse, this is a wonderful thing for a man, and I am grateful to the Board for the good work it has done in advertising this training for women in almost every town. I hope that my hon. Friend the Member for Lanarkshire, North is a member of this Association. If she is not, I am sure that the Association would be only too happy to show her how to tackle simple electrical jobs. All that one needs is a couple of insulated screwdrivers and the job can be safely done.
§ Mr. Charles Loughlin (Gloucestershire, West)
Does not my hon. Friend agree that skilled people are available to do this work? If housewives do these jobs it may increase unemployment among electricians, especially in Scotland, where I understand the problem is very acute.
§ Mr. Bence
With due respect to my hon. Friend, Scotland is a land where the distances between households, towns and sources of supply are very great. If a person lives in a house in a small village, which is ten or even twenty miles away from the nearest electrical engineer, it is nice for him to have a wife who can mend a fuse. I am sure that my hon. Friend would not begrudge any man—even me—the pleasure of having a wife who could mend a fuse.
§ Mr. Bence
Choosing wives is always an interesting subject, Mr. Deputy-Speaker. I was led astray by my hon. Friend the Member for Kilmarnock (Mr. Ross). I hope that I shall live to see the day when the Hydro-Electric Board and the South of Scotland Board—or an amalgamation of the two—will be given back the power to carry out contracting, wiring houses, manufacturing and tendering and contracting for the supply of all electrical goods. This would be especially valuable in Scotland.
No public corporation or local authority can say to its creditors, individually or collectively, "We borrowed £10 million from you. We are sorry, but the economic situation in our industry is such that you will have to forgo £8 million of what we owe you. We are writing down our debt to £2 million". That is what private enterprise has done. It was done quite often in the inter-war years. Private companies often wrote down debts from £1 to 1s. 6d. I remember that one went down as law as is. 3d. But no State enterprise can do this. It has to pay the money back. It cannot write down the debt.
If the South of Scotland Electricity Board got into a bad way it would have 516 to be financed by the taxpayers in one way or another. Once a capital debt is created the money borrowed cannot be written off, as can be done in the case of a private company. A private company can have a meeting of its shareholders, and with the agreement of the creditors it can write down its indebtedness and start up again, perhaps under a different name. A State enterprise cannot go into voluntary liquidation, although it is a legitimate commercial activity, but friends of mine have done it regularly, all their lives. I have two friends in the South whose fortunes are based on the fact that they successfully went into voluntary liquidation. They had good wives, nephews, father and mothers. But State enterprises cannot do that.
In those circumstances, I do not see why a State enterprise should be subjected to other commercial terms. If we insist on the electricity supply industry obeying commercial laws as they apply to private enterprise, the industry ought to have the rights of private enterprise. The Italian Government set up a State enterprise known as E.N.I. Its board ran it as a private enterprise, and the Italian Government never interfered. That is not the case with the Electricity Board. Its hands are tied. It is a mystery to me how it has been so successful. I strongly resent this obligation placed upon it to find £11 million out of its income for capital and development when it is inhibited form doing what any ordinary commercial firm can do.
I come to the question of the coal-fired station. I feel deeply about this. There are miners in my constituency where pits are to be closed down. They would not argue, and I certainly would not argue, in terms of £5 per ton of coal, and that coal can he got cheaper in Yorkshire than in Dunbartonshire. I do not dispute that. It is well known that we get cheaper oil out of the Middle East than we do from the Gulf of Mexico, but we get oil from both places. I believe that this industry, which is bound by certain social conventions created by the State, should play its part in helping to solve what is in Scotland a very difficult social problem.
We are to have miners displaced in an economy where there is too much labour. I could understand it if in Scotland we 517 had 10,000 unemployed and 50,000 vacancies. Then I would say, "Close all the pits because we have other jobs for the men," but I believe that in a country where we have 95,000 unemployed it is socially and economically desirable to employ as many men as we can in getting the indigenous fuel resources until employment demands go up, and then we can perhaps gradually wipe out the pits because we have other jobs for the men to go to.
This is what one does in one's social life. I believe that few men spend their lives acting purely on economic motives—there are other motives—and I believe that here is a case where we have the indigenous resources in our country and if we do not use them—if we say that it is cheaper to get oil from somewhere else—and stop getting coal out of the bowels of the earth we shall never get it again—it is finished. We shall have destroyed that source of power. A coal mine is not like a factory. One can grease up machines, put them in mothballs, lock the doors of the factory, and in ten years' time put out an advertisement, "This factory will be opened. We shall want 5,000 men." One cannot do that with a coal mine. Once it is shut, it is shut for ever.
I believe that with this situation in Scotland these is every justification for a coal-fired station to keep on as many miners as possible. I do not want men to go down the pits. I was bred in a Welsh coalfield and if I had had to get my living by digging coal I should have died at the age of 14. I have told my wife many times that if we had had to depend on my going down the mine to get coal, we should have had to burn the furniture to keep the house warm. It is a terrible life, crawling along to the coal face in a tunnel which is only 18 in, high. It is a shocking business. I cannot understand why as a civilised society, having discovered alternative means of providing power, we have not had the common decency to make sacrifices in order to provide alternative forms of employment for these men—
§ Mr. Deputy-Speaker
Order. The hon. Gentleman is now getting wide of the Bill. I can understand if he wishes to give certain illustrations, but now he is going far too wide.
§ Mr. Bence
I appreciate that, Mr. Deputy-Speaker. But as one who was reared in a coalfield I feel strongly for the welfare of coalminers, men who, as did their parents and their grandparents before them, have to dig for coal in the earth, which is a hazardous job. I do not like to go wide of the Bill under discussion but I hope that I shall be forgiven—
§ Mr. Bence
I was about to conclude my speech. I hope that the Secretary of State will impress upon the Government that whatever may be the future form of power generation in the industrial belt of Scotland there will be a coal-fired station which will prove to be for the good of our democratic institutions and for the social contentment and betterment of the people who live in the industrial belt of Scotland.
§ 8.52 p.m.
§ Mr. William Ross (Kilmarnock)
This Bill represents a confession of failure on the part of the Government. We discussed it exhaustively in the Scottish Committee and that fact was apparent. Now we are extending the borrowing power limits of the South of Scotland Electricity Board from £135 million to £175 million. We have been told that if we do not do this the present limit will be reached by March of next year. That amount of capital investment was supposed to last the Board until 1965. The Government who have cabined, cribbed and confined this public industry are just two years out. In other words, the extent of their meanness is two years full development.
That is not the whole story. The new limit of £175 million is attained—that is the limit of the outstanding borrowing—only if in this current year, and the future years until 1965, there is more revenue which must be used on capital development. There is only one way to raise revenue and that is by using electricity. In Scotland, be they farmers, industrialists, housewives or people in shops, the people are the consumers. In Glasgow and the west of Scotland people are complaining about the changes of tariff for the provision of 519 electricity in off-peak periods. One must bear in mind that the money spent is not all spent on generation. That is only part of the job of the Board. There is also transmission and distribution.
All this is capital development and, as I understand it, the Board is well away into next year from the point of view of capital development in respect of distribution and it may well be that the Board has oversold. We can see how this type of limitation has inhibited the Board. Were that not enough, we had the restrictions and limitations placed on the North of Scotland Board. Now we have in the South of Scotland the fantastic position that already the peak load of last year has been passed. Anyone strolling through the shopping centres of Glasgow tonight would see a display of lighting which would dazzle even the display in Oxford Street and Regent Street. The Glasgow Corporation has been told by the South of Scotland Electricity Board that it may be faced with hours of darkness and the same thing has been told to shopkeepers.
How has this position arisen? Because the Goverment nave not provided the wherewithal. It is the Government who authorise every bit of capital investment for which this money has to be used, and the Government have not given the all-clear for the necessary development.
I am sure the Secretary of State for Scotland will know that, quite apart from any coal-fired stations, oil-fired Stations or other stations, the South of Scotland Electricity Board is at the Moment buying jet engines as stand-bys in case what it expects to come during the winter, a strain on the load, does come about. This is a new way of keeping our aircraft industry going. It makes up the gaps in the Government's "stop-go" capital development in respect of public industry. What my hon. Friends have been asking is whether or not the amount of money to be provided by the Bill will be enough. Will it enable the Board to go ahead with developmets which are urgently needed from the paint of view of power now, tomorrow and in the development of Scottish industry which we still hope—we are optimistic—is to come, if not 520 under this Government then under one which will replace it soon?
We have not had an answer on that yet. The Prime Minister, in answer to a Question put by me the other day, seemed to accept the idea that this was the time when we should go ahead with necessary public works. Anyone who read the Scottish newspapers today would see the contracts placed with Babcock and Wilcox and other engineering firms in respect of a generating scheme at Cockenzie. If the Secretary of State used his powers with the money we are authorising for yet another major coal-fired station, he would bring hope, not only to miners in Scotland but to engineers and all the supplying industries. This is what we need; this is his opportunity.
Instead of whispering sweet nothings into a microphone and looking nice into a television camera, if he used the powers he has got to do something he would be meeting the challenge which faces Scotland and which faces him as Scotland's Secretary of State. This is what we have been urging him to do all along. What is he going to do about it? The position of the South of Scotland Electricity Board in relation to this winter is the same as that of Scotland in relation to industry. It is development or darkness. We want development. We want to be sure that there is sufficient money within this Bill to ensure adequate development. Even as they erred in 1959, it may be that they are erring now.
The only good thing about the Bill is that probably there is enough in it to keep us going until after the next General Election. After the next General Election our noble family will have disappeared from St. Andrews House and there will be people there who really want to do something for Scotland. When I think of the now silent member of the trio telling us how Tory back benchers want to do something for Scotland, I look at the Tory back benches—and see not a single one present.
§ Mr. Ross
That is even more of a reflection on Scottish Tory Members. Where is the Liberal Party? It has gone too. So we are left once again with the necessity to do what we have been doing 521 for 11 years, and asking the Secretary of State for Scotland to make adequate provision for industrial development in Scotland. In this case it is the South of Scotland Electricity Board.
The proper spending of this money and the proper timing of the spending of this money could make all the difference between prosperity and hardship in industries other than the electricity industry. The coal-fired station would mean so much to the miners. There is the development of engineering, and a decision to use a coal-fired station might well be the first major step in the revival of that Scottish industry which has always been heralded but which never comes.
§ 9.1 p.m.
§ The Under-Secretary of State for Scotland (Mr. Gilmour Leburn)
I think I find myself largely in agreement with the hon. Member for Kilmarnock (Mr. Ross) when he said that we want development. Of course, we want development. My right hon. Friend, however, would not agree with the hon. Lady the Member for Lanarkshire, North (Miss Herbison) when she suggested that he had become reconciled to unemployment in Scotland in perpetuity. Of course, my right hon. Friend would not agree with that.
Under this Bill we are dealing with the provision of electricity in Scotland between now and 31st March, 1965. At previous stages of the Bill I have given figures relating to forecasts which the South of Scotland Electricity Board has made for the years ahead, and I think it might be useful if I were to give those figures again, for they demonstrate that far from leaving things as they are at the moment, adequate provision will be made in the years ahead, according to the information available to us.
We know that the estimated demand for 1962–63 was some 2,500 mW, and I think the hon. Member for Hamilton (Mr. T. Fraser) will be particularly interested when I tell him that the maximum at any one half-hour this year has been 2,448. The figure increases over the years until 1970–71 to an estimated figure of 4,520; that is from 2,500 to 4,520. Therefore, I think it will be seen that estimated demand, while not doubled, will very nearly be doubled, and, on a spot forecast of the Board for the year 1975–76, the figure is 5,790. The 522 Board is planning on those figures. Surely nobody can say that on figures such as these there will not be ample room for development in Scotland.
The hon. Member for Lanarkshire, North said that this Bill was hopelessly inadequate for the needs of the electricity industry in Scotland. If she were looking a number of years ahead—say, five, ten or fifteen years—I would agree with her, but here we are considering—and my right hon. Friend explained this very clearly when he moved the Third Reading of the Bill—a period of two years or so ahead, and we believe that we are making adequate provision for cur requirements.
Most of the discussion has centred around the importance of coming to a decision about a coal-fired station. My right hon. Friend touched on this point in his speech. This would be a very important project. We all agree on that. There is no doubt about it. At an earlier stage, I indicated that, if it was to be producing between 2,000 and 2,400 mW, it might be expected to cost anything in the region of £70 to £80 million. It would be of the greatest importance to the mining industry of Scotland.
I believe that all that is between us here is that hon. Members opposite say that we should blindfold ourselves now and go for the coal-fired station without giving any consideration whatever to the economics of the project. The South of Scotland Electricity Board has asked consultants to report on the whole project. I have explained before this that the consultants' report is expected early in the new year. The board will have to take a certain amount of time to consider it.
§ Mr. Leburn
Certainly, yes. This is what is between us. Hon. Members opposite would go into this blindfold. I do not think that that is right, and I believe that to do so could be a great disservice in the long run to Scotland.
§ Mr. Willis
What is between us is that we on this side protest at the way the matter is being dealt with. We want it dealt with as a matter of urgency. The hon. Gentleman has not suggested that the project will be advanced by a single day. The whole problem in 523 Scotland is one of urgency. Should not the project be advanced as rapidly as possible? It is possible to advance programmes without doing stupid things.
§ Mr. Leburn
The Board has to make up its mind whether it is to be a coal-fired station, an oil-fired station, or a nuclear station. My night hon. Friend made quite clear that, when the Board's proposals were put to the Government, the Government would have a responsibility to take into account not only the economic aspects but the social aspects of the case as well.
Nevertheless, once the matter has been considered by the South of Scotland Electricity Board and proposals are put forward, even if authority were given at once to go ahead with the station—I quite understand the feeling of hon. Members opposite—the amount of money we are here dealing with up to the 31st March, 1965, is not the sort of money which is required for that project. There will be other moneys which will have to be legislated for for a big project of that kind.
I accept the criticism that, perhaps, the Government should have said that, instead of bringing in a Bill to carry us forward until 31st March, 1965, we ought to bring in a Bill to carry us forward until March, 1975. But there will have to be a Bill making provision for a great deal of money between now and 1975. In view of the fact that the 1959 Act is terminated on 31st March, 1965, we thought that that was the most appropriate date.
This money, the £40 million, covers all the requirements, so far as we can judge at present, until that date. I have told the House, and I have told the Scottish Committee before now, that, of course, a great deal more money will be required in Scotland for the future development of electricity. There is no doubt about that. But I believe that for our present requirements this is adequate.
§ 9.10 p.m.
§ Mr. Thomas Fraser (Hamilton)
The Under-Secretary of State listened to all that was said when we discussed the principle of the Bill and to all that was 524 said during the Committee stage and he has listened to all that has been said this evening, but he still does not understand what we are saying. We are not saying that the Bill should have included a larger sum to be paid between now and 1975 or 1970 or any other date. What we are saying is that, as far as we can judge, the additional £40 million which the South of Scotland Electricity Board may borrow when the Bill becomes law, between now and March, 1965, is inadequate if Scotland is to prosper, if her economy is to expand and if the Government would take the brakes off and allow the South of Scotland Electricity Board to get on with the job that it has to do on behalf of the people of Scotland.
The Under-Secretary of State knows perfectly well that the Board's programmes have been trimmed by the Government. He knows that the last time that the Government trimmed capital expenditure on electricity they could not very well stop the big capital projects in the construction of power stations without being involved in very considerable compensation payments to the contractors. They therefore made a cut in transmission and distribution. The result of that was that a great many people in Scotland who might have taken electricity which was being or could be generated were not able to get it because the transmission wires were not able to carry it.
Recently, the Glasgow Corporation decided to "live it up" a little—I do not know whether it was taking the advice of the Secretary of State—by putting on some lights just to make the city a little more attractive to Christmas shoppers. It did an excellent job of it. It is a beautiful display, and I think that it will be a great encouragement to shoppers to go to Glasgow to make their Christmas purchases. I hope that trade in Glasgow benefits as a result of what the Corporation has done.
§ Sir Myer Galpern (Glasgow, Shettleston)
In addition to that, Ayr only wanted to light up three Christmas trees but was told that it could not get the electricity to do so.
§ Mr. Fraser
I am grateful to my hon. Friend. Glasgow has done this, but the South of Scotland Electricity Board has had to warn Glasgow that the electricity 525 supply may not be adequate to keep the lights going. This is at a time when industry in Glasgow has greatly reduced its demand on the electricity supply.
During the weekend I was approached by a member of the staff of Beardmores in Glasgow, which has the only electric steel furnaces in Scotland. These furnaces are not working; they are idle. If one of the electric furnaces were working, it would consume far more electricity than all the twinkling lights in Glasgow put together. If Beardmores could get some additional work, or if it could get back some of the work which has been transferred from Glasgow to its parent Company, Firth Brown, at Sheffield and the electric furnaces were switched on, all the electric lights in Glasgow would be switched off. Surely this is evidence that the capital expenditure on this industry has been inadequate in the past and has been over-trimmed by the Government.
My hon. Friend the Member for Glasgow, Shettleston (Sir M. Galpern) mentioned the position at Ayr. In my constituency, the Borough of Hamilton set about putting up Christmas lights. I should let the right hon. Gentleman have a copy of last weekend's Hamilton Advertiser to get the comments of some of the shopkeepers, who paid 50 per cent. of the cost. Because the transmission lines into Hamilton are so inadequate, they had to put up so few lights that one cannot notice them. One goes through Hamilton without seeing them. The shopkeepers do not like this. This is because capital investment in the transmission lines was hopelessly inadequate. We have no reason to believe that the provision in the Bill is adequate for the capital works that have to be carried through. That is why we are so critical of the right Gentleman.
The Secretary of State must have read the letters in the Scottish newspapers of recent weeks and months from consumers who feel that they have been cheated by the South of Scotland Electricity Board over the off-peak tariffs. These are people who were talked into taking an off-peak load at certain times of the day. Now the Board finds that it cannot supply the demand, so it has had to adjust the off-peak tariff and the hours at which off-peak electricity can be supplied, because there is not enough to supply the demand.
526 I live in a part of the country which suffers quite frequent electricity cuts. We have had one rather long one already this winter, and we had several last winter, because there was so much cheeseparing on the transmission lines into that part of the country. Nothing which has been said by the Secretary of State or by the Under-Secretary gives any reassurance that this weakness in our electricity supply system will be dealt with in the short run. There has been no indication that anything will be done to deal with it.
Whenever the Under-Secretary replies to our suggestions about the construction of a new coal-fired power station, he tells us about the consultants who have been appointed by the South of Scotland Board. Does the Board have to be told by a firm of private enterprise consultants what is the cheapest way to generate electricity? No private enterprise consultant can tell the publicly-owned electricity industry what is the cheapest method of production. It is the consultants who have to be told by the Board what it costs to produce electricity in the different types of station.
§ Mr. Leburn
Does the hon. Member accept that the Board has to generate electricity as cheaply as possible?
§ Mr. Fraser
I will come to that presently. The hon. Gentleman made the case for the employment of those private enterprise consultants. They would not know of the cost of producing electricity unless the Board told them. Therefore, the information must be given to the Board before the consultants decide to pass it back to the Board. This is not a very clever bit of work.
The Under-Secretary suggested that the Opposition would have the Board go for a coal-fired station blindfold, as if we had never built a coal-fired station before and did not know the cost of producing electricity in such a station. What absolute nonsense. The South of Scotland Board produces electricity at .45d. to .5d in the coal-fired stations.
The Secretary of State—or his predecessors—decided for prestige purposes to build a nuclear station down at Hunterston to keep up with the Joneses in the South. What is electricity going 527 to cost there? A little more than 1d. per unit, more than twice what it costs to produce electricity in a coal-fired station.
The cheapest way to generate electricity is in hydro stations. I believe that there is not any question about that. The cheapest electricity of all is the electricity which is produced in the hydro stations, and I advise the Secretary of State and the Under-Secretary to look at the cost of generating electricity in those hydro stations which were built in the 'thirties. They are getting electricity for practically nothing now. If they are looking only at the cost of generating electricity, let them build all the hydro stations they can build. But, of course, it is not only a question of generation: there is the matter of transmission.
If the Board is seeking now in a conventional station, a thermal station, to get the cheapest electricity it can get, I believe it may find that marginally, as a result of the differential coal prices introduced twelve months ago, a coal-fired power station would be dearer. The calculation I have seen made is as follows. If the South of Scotland Electricity Board and the Central Electricity Generating Board were to build coal-fired stations in the North-East and in Scotland they would find that the cost of generating electricity by coal would be .002 of 1d. more than it will cost them to produce electricity in an oil-fired station on the banks of the River Thames. That is the difference. Marginally—very, very marginally—it is dearer to produce electricity in a coal-fired station in the North than it is to produce in an oil-fired station—at the present prices of oil—on the Thames Estuary.
If they go ahead with the production of all the electricity they need down here, having it produced by oil-fired stations Or coal-fired stations, then there is going to be either a lot of public expenditure incurred in providing alternative jobs for the miners who would then be out of work—who are, in fact, out of work—or it will cost quite a lot of money, I would say, to transfer them to employment elsewhere, and a lot of public service expenditure in building houses for them and schools 528 and all the other things regarded as essential for modern living in other parts of the country to which they are sent.
All we are saying to the Government is that it would be better to export electricity from the North than to export people. And that is the choice which has to be made. The Secretary of State will share with all his colleagues in the Cabinet the responsibility, and they will decide whether to export electricity from the North or to export people. Up to now, there is all the evidence in the world that they do not mind exporting people.
§ Mr. Fraser
They have shown no inclination to rationalise the resources of this nation.
The Secretary of State is a farmer. When one thinks of the way in which the Government and Parliament over the years have decided to take money out of the taxpayers' pockets to ensure that our land resources would be mobilised and employed and that the farmers and farm workers and all engaged in the agricultural industry would have a reasonable return on their investments and for their labour, when one thinks of all that the Government have done for this industry—and I was proud and privileged for some years to be able to play a part in this—and one puts alongside it this complete disregard for our indigenous wealth in coal, which is the only material resource which we have in this country in any supply, and the way they are frittering it away by allowing hundreds of millions of tons of it to be locked away in mines now being closed, not because they are exhausted, but because there is not a market for the coal, one is astonished.
When one thinks of this failure to employ our human resources, the manpower that stands idle year by year in Scotland, despite all the Government claim to have done to remedy the situation, one is amazed that the Minister of Labour last week told my hon. Friend the Member for Leith (Mr. Hoy) that in ten years of Tory Government the number of male employees in Scotland went down by 16,000, while the number of males employed in the South in the same period increased by 855,000, and then they say that they have been doing 529 all they can. If that is true, they had better make way for somebody else who will do a little better.
All we are saying, before we pass this Bill and send it to another place for its consideration, is that the Secretary of State should at this time make provision in a Bill of this kind—in this Bill—for the construction of at least one additional coal-fired station. I hope the Secretary of State realises—
§ Mr. Speaker
Order. This is Third Reading, when we discuss what is in the Bill and not what is omitted from it.
§ Mr. Fraser
I am sorry, Mr. Speaker, but both the Secretary of State and the Under-Secretary talked about this coal-fired station. Indeed, nearly everybody has talked about it, and I thought this was one of the purposes for which the extra money might be spent.
§ Mr. Speaker
If that is so, I am wrong, and the hon. Gentleman is right. I am sorry that I interrupted him.
§ Mr. Fraser
In any case, I assure you, Mr. Speaker, that I have not very much more to say on this matter. I put it to the Secretary of State that there would seem to be—in fact, there is, and he himself has made it clear—no provision in this Bill for this extra station, and the £40 million is clearly to be spent on other projects. I put it to the right hon. Gentleman that it is not good enough to wait for consultants to tell us next spring how our electricity should be generated in the future. He should make up his mind and the Government should make up their minds, and quickly.
The National Coal Board has made it quite clear to them and to the Mackenzie Committee, which reported about a month ago, that the Board cannot keep the Scottish pits open unless the market is expanded. At least, there are many pits which will not be able to keep open unless the market can be expanded. The Coal Board has stated publicly that the one thing that the Government can do that will enable the Board to avoid closing a number of pits in Scotland is to say now that this power station will be proceeded with. If they will say that, they will save the jobs of 10,000 miners—and those 10,000 530 miners maintain a population of 50,000 people.
The miners and others in Scotland have suffered a great deal under this Government in the past eleven years. Before the Government finally go to the electors and get chucked out, I beg them to do at least one thing for which they may get a little gratitude in certain parts of the country. Let them decide now to proceed with this station, save the jobs of 10,000 miners and give some security to a population of 50,000. They can do that now, and I ask them to do it before we dispose of the Bill. Let them give an assurance that they will take the decision and announce it and give authority to the South of Scotland Electricity Board, and if need be, let them come back to the House for another borrowing powers Bill before 31st March, 1965.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed.