HC Deb 02 August 1966 vol 733 cc227-30
13. Mr. Dickens

asked the Minister of Power if he will state the extent of the investment cuts in the coal, gas and electricity industries arising from Her Majesty's Government's new policy; and if he will make a statement.

15 and 16. Mr. Alison

asked the Minister of Power (1) if he will give details of how the cuts in public expenditure will apply to capital expenditure by the Gas Council;

(2) if he will give details of how the cuts in public expenditure will apply to capital exenditure by the National Coal Board.

17. Mr. J. H. Osborn

asked the Minister of Power in view of the cut back in expenditure in the public sector, if he will tabulate in theOfficial Reportwhich capital projects will now be held up or postponed by the Central Electricity Generating Board; what is the total value of these cuts; and if he will make a statement.

18 and 24. Mr. Palmer

asked the Minister of Power (1) if he is aware of concern by consumers and would-be consumers that because of enforced reductions in capital expenditure the nationalised electricity and gas industries will not be able to meet their supply obligations; and if he will make a statement to offset the adverse effect on the trading position of these industries;

(2) when the proposed reduction of £20 million in capital expenditure in the electricity supply industry will have a practical effect in terms of work actually halted; and what effect there will be on the current inflationary difficulties.

Mr. Marsh

With permission, I will answer this Question and Questions Nos. 15, 16, 17, 18 and 24 together.

Mr. Alison

On a point of order, Mr. Speaker. As Question Nos. 15 and 16 are materially different from the others now being answered, may I submit that they should not be taken with them?

Mr. Speaker

It is a matter for the Minister.

Mr. Marsh

As to the extent of the cuts for each industry, I would refer to the Answer given by my right hon. Friend the Chief Secretary on 25th July. I am not yet able to say where the cuts will fall, but essential industrial investment by the nationalised industries will go on, and the cuts should not seriously affect the industries' ability to meet their supply obligations.

Mr. Dickens

I am grateful to my right hon. Friend for that reply, but is he aware that many of us on this side very much regret these cuts in investment in the public sector? Is he further aware that the major cuts announced, £10 million for the Gas Council, £10 million for the National Coal Board, and so on, smack of back-of-an-envelope planning carried out during nocturnal hours in the Treasury? Can he tell the House how far he personally was consulted before the cuts were announced?

Mr. Marsh

These figures were not arrived at by the Treasury but by the Ministry of Power on the basis of information available to us. There was no question of a calculation on the back of an envelope. They were notified to the chairmen of nationalised boards, who are discussing them with us.

Mr. Alison

Does the Minister recall that the Prime Minister said on 20th July that the programme for investment in the nationalised industries has been carefully scrutinised in the past? Can he confirm that consultations with the chairmen of the National Coal Board and the Gas Council were started before the announcement of 20th July?

Mr. Marsh

The consultations have taken place since then. Prior to that time the figures were fixed in regard to the ability of the industry to play its part in a major economic crisis. We have no reason to assume that the chairmen of the nationalised industries are aggrieved.

Mr. Palmer

Is my right hon. Friend aware that because of the nature of electric power construction these cuts can have no practical effect for nine or 12 months, so that they will have no effect on current balance of payments difficulties and by the time they have effect we shall probably need to expand the economy? Is not the whole exercise an example of how not to run an economy?

Mr. Marsh

The cuts are mainly in distribution rather than generation. They will not have an immediate effect because they are cuts on future investment. We are quite convinced that we can meet this problem. It will be difficult obviously, but economic crises are difficult.

Mr. Osborn

Can the Minister state whether the 10 per cent. margin to which he referred was before or after the cuts were announced, and whether in successive winters—two or three winters hence—there will be enough capacity to meet peak demand? Is there not a danger of power cuts in the winters going forward?

Mr. Marsh

No, this is not a question of cutting the safety margins. These are very large amounts of money in terms of cash, but they are relatively small in relation to total investment.

Mr. Eadie

Will my right hon. Friend agree that, as a result of the Question and the Answer, it is time that he presented to the House a national fuel policy?

Mr. Marsh

As I explained as recently as last Tuesday, we have every intention of providing a fuel policy both in the short and in the long term. It would be absurd to think that one can produce a realistic fuel policy in a matter of weeks taking into account new developments.

Mr. Ridsdale

Will the cuts take full account of the return on capital employed by the nationalised industries compared with that employed by private industry?

Mr. Marsh

This would not be affected, but that is another question.

Mr. Manuel

As to the industry's capabilities of meeting consumer needs, has my right hon. Friend made any estimate of the electrical and coal-burning appliances which are being sold? Does he not think that the cuts should make him ascertain whether the industry will be capable of meeting the demand for all the appliances which will come into use in future?

Mr. Marsh

No, there is no reason to suppose that cuts of this level are going g to have the sort of catastrophic consequences which hon. Members are implying. There are difficulties, but there is no reason to suppose that these cuts will involve any increase in the insecurity of power supplies.