HC Deb 16 December 1968 vol 775 cc1019-32

Not amended (in the Standing Committee) , considered.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Dr. Dickson Mabon.]

10.25 p.m.

Mr. Gordon Campbell (Moray and Nairn)

We now have an opportunity for the Minister of State to reply to some of the points raised in Committee of which he needed notice and which he undertook to deal with on Third Reading.

The Bill raises in two stages the borrowing limits of the Scottish electricity boards because the present limits are expected to be reached in future years. The main point is that, before any major investment projects are embarked on in Scotland, the most up-to-date assessments must be made of fuel and power developments. Recent experience has shown that technological improvements, discovery of new sources of power and other changes have caused the situation to be altered from year to year, even from month to month.

The Bill permits new limits and provides more latitude for the Secretary of State and the electricity boards, but what will matter in the event will be the decisions taken in future on investment and expenditure. We hope that these decisions on the generation and transmission of electricity in Scotland will be taken by the Government of the day—whether the present Government or, more likely, a future Conservative Government—with all the latest technological developments and all the other possible information which can affect those decisions in mind.

10.28 p.m.

Earl of Dalkeith (Edinburgh, North)

Although the points raised during earlier stages were fully explored, there are just two other questions I should like to put which are relevant and which have arisen partly since our earlier deliberations.

First, now that the great majority of the people of Scotland are bent on blowing the fuse in British Standard Time, it is relevant to ask what effect B.S.T. is having upon costings of the electricity boards in terms of the possibility of greater overtime payments to their staffs. Has any account been taken of this in the amounts that we are discussing?

Secondly, is the Minister satisfied that the tools which the men have to look after electricity generation and supply in Scotland are of sufficiently high standard? Have they got the tools for the job? I am reminded of this aspect from time to time when breakdowns occur. I was reminded of it when I had to have Sunday morning breakfast by candlelight. We tend to think what a bore it is when the lights go out, but usually little thought is given to the men who have to go out at unearthly hours to repair breakdowns, often in freezing fog and snow and to almost inaccessible hillsides.

I am sure that the whole House will join in tribute to the marvellous work that these men do. We recall their work during the January hurricanes and will wish them a happy and fuse-free Christmas.

10.30 p.m.

Mr. Arthur Palmer (Bristol, Central)

I do not wish to detain the House long in discussion on the Bill. Nevertheless, the Bill is of general concern to the country. I know that it has been well talked over in the Scottish Grand Committee, of which English Members, in the nature of things, cannot be members. Yet the taxation which has to be raised to make loans to the boards is presumably raised from the United Kingdom as a whole. Therefore, I make no apologies, as an English Member who takes an interest in electricity supply, for saying something about the Bill. I will be as short as I can, but there are a number of things which should be said about the Bill.

I was not very enthusiastic when, in 1953, it was decided to split the South of Scotland electricity organisation away from the rest of the country. In fact, I opposed it at the time. But I am prepared to concede that the South of Scotland Electricity Board is an efficient and effective organisation, as is the North of Scotland Electricity Board which came into existence as a result of an earlier Act. Both boards have done excellent work. They are useful to those of us interested in electricity supply organisations because they give a useful comparison between the operation of two all-purpose electricity boards and the system which we have south of the Border where generation is separated and distinct from distribution.

It is worth making the point that the Scottish electricity boards are not in fact, as viable technically as they might seem to be on the face of it, since they are bound to lean for their reserve capacity upon the Central Electricity Generating Board. It is stated now that the Scottish electricity boards propose to obtain for themselves a margin of reserve generating capacity. Already, south of the Border there is a reserve capacity of about 17 to 18 per cent. Since the two systems are entirely interconnected, is this being worked out on a Scottish basis alone, or, as I think it should be, on the general United Kingdom basis? That is an important point in view of the vast sums of money which are bound to be invested in electricity supply generation.

Another matter I should like to put shortly concerns the fuel chosen when new generating stations are constructed. The South of Scotland Board, which in these matters works jointly with the North of Scotland Board—there is now a common generation committee—is making a very marked investment in coal fired power stations at Cockenzie and Longannet. They propose to build a second, much larger, nuclear power station at Hunterston. All this work is in hand. Apparently after that is completed, it is intended—and this is an excellent decision—to move on to a small scheme for pump storage.

But a surprising decision has been taken additionally, although, as yet, it has not been approved by the Secretary of State for Scotland, that a large oil-fired power station should be constructed at Inverkip. Consent, as I say, has yet to be obtained. This last decision has come as a surprise to some of us who serve on the Select Committee on Science and Technology, of which I have the honour to be chairman. When Mr. Allen the chairman of the South of Scotland Board, gave evidence to the Select Committee, he spoke a great deal about coal-fired power stations and about nuclear powered stations, but said hardly anything about the possibility of new oil-fired generation in Scotland. I do not wish to detain the House unduly, or I would give a relevant quotation from the written evidence given to the Select Committee by Mr. Allen's board.

It is 18 months since the South of Scotland Board gave evidence to the Select Committee when we were investigating the nuclear energy programme, and I can have no complaint if since then the Board has thought again about it, but it reinforces, I think, the Select Committee's argument that before the Government give blanket approval to the investment of such large sums, when a choice has to be made between firing systems, there should be check and double check to make quite certain that the costs have been accurately calculated. In the Select Committee's Report we proposed that there should be an independent assessment of fuel costs, of course.

I have read what the Minister of State told the Grand Committee, when he explained that all the information on relative costs was fed into a computer and that apparently the computer produced the right answer. But that is a remarkable simplification. If life were as simple as that, there would be no need to have Ministers, would there? We could install a bank of computers and get the right answer everytime. In all these matters the fact is that the answer we get from the computer depends almost entirely on the assumptions which we make about the information fed into the computer. Computers and other calculation devices are simply tools, and we should not think more than that of them.

I appeal to my right hon. Friend and to the Secretary of State for Scotland to think again about the answer given me on 4th December that the Government were satisfied that in these matters accurate calculations were being made and that there was no case for independent fuel assessment. If he and his right hon. Friend think about it again, they should read the correspondence which has passed between the Minister of Power, who operates South of the Border, and the Select Committee on Science and Technology, in which he will find a curiously ambiguous reference to an Answer given in the House on 15th October by the Prime Minister to my right hon. Friend the Member for Easington (Mr. Shinwell).

This reply is referred to in the correspondence and the Select Committee commented on it, because, in view of the stubborn refusal, until now, of the Minister of Power and, presumably working in conjunction with him, the Secretary of State for Scotland, to have independent fuel cost assessment, the Prime Minister's reply was most interesting. The Prime Minister said that previous assessments for relative costs of conventional and nuclear generation were again being reviewed.

This requires some interpretation—a point made by the Select Committee. If we are now thinking again, beyond the assumptions of the last White Paper on Fuel Policy, it is an opportunity to have an independent assessment. That is the argument which I want the Minister to consider when his Department go further into the matter.

Occupants of the office of Minister of Power tend to change rather quickly, but the Minister of Power has stated that he is carrying out, as his predecessors proposed, a review of electricity supply structure in England and Wales. He has an expert Committee of advisers looking at the whole organisation of electricity supply south of the Border. Is Scotland involved in this at all? It would be interesting to find out. If the Government are going to all the trouble to review and, possibly, reorganise electricity supply, it seems curious to do it simply south of the Border. The Government should do their electrical thinking in United Kingdom terms if it is to be done at all.

The last time that Scottish electricity organisation was looked at was in 1962 or 1963, when the Mackenzie Committee reported. That was a comprehensive review of the whole organisation and system of generation and distribution of electricity in Scotland. The Mackenzie Committee made a number of recommendations, very few of which were implemented. That was when the Conservatives were in power. They appointed the Mackenzie Committee, but did little about its recommendations when they were submitted. Apart from the establishment of the co-ordinating arrangement between the South of Scotland Board and the North of Scotland Board, the recom- mendations of the Mackenzie Committee were largely ignored.

The most interesting recommendation of that Committee was that there should be one board for the whole of Scotland. It seems surprising that, at a time when electricity supply organisation is under review in England and Wales, nothing is being said these days, apparently, about the previous proposal to have one Scottish electricity board. I shall be obliged if my hon. Friend the Minister of State will do his best to answer these points, which should be of considerable interest to the whole of the House.

10.42 p.m.

Mr. Edward M. Taylor (Glasgow, Cathcart)

If I may intervene briefly, I would like to ask three questions on which, I hope, the Minister of State will be able to give advice. We greatly appreciate the contributions of the hon. Member for Bristol, Central (Mr. Palmer) in electricity affairs, because he has a real interest in electricity throughout the country and he has detailed knowledge of it.

My first question relates to a point which has been mentioned time after time by the South of Scotland Electricity Board in its annual reports. When we are agreeing to a substantial additional sum of capital investment for the board, we are entitled to have at least guidelines on a question which has caused it so much concern. I refer to the cost of coal to the board.

The board stated in its annual report for the current year that during the year it had continued to draw attention to the high price of coal for electricity generation in Scotland compared with the price paid for electricity generation in England and Wales. The board is, of course, the largest customer of the Coal Board in Scotland. When we are considering additional sums for capital investment, we are entitled to have an indication from the Government of their policy concerning these supplies to the board, particularly in connection with the capital expenditure which is authorised in the Bill.

My second question, which I have raised in the House from time to time, is that of fuel price differentials in Scotland. I have pointed out to the Minister of Power that in Scotland we pay considerably more for gas and coal for electricity, but despite the high price of coal, through the efficiency of the boards, we ensure that the domestic consumer in Scotland gets a fair deal and the price is extremely reasonable compared with other parts of the country. Industrialists, how ever, pay about 1s. in the £ more than the average in England and Wales.

Can the Minister say whether part of the capital expenditure covered in the Bill will contribute to a reduction of the differential which exists between domestic and industrial consumers in Scotland? It would appear that the differential between the two classes of consumer is greater in Scotland. Will the sums provided in the Bill be used in some way to reduce the differential which appears to exist between domestic and industrial consumers compared with other parts of the country?

My third question relates to the efficiency of accounting and the collection of money. The traditional method of collecting revenue for electricity is by using meters which indicate the quantity of current consumed and issuing accounts. There has been a tradition in Scotland, for longer than in other parts of the country, of having a substantial number of prepayment meters. Because of the problem, which is referred to by the consultative committee, of burglaries from meters the board has had a policy of gradually phasing out pre-payment meters. On the other hand, when we are considering considerable capital investment I wonder whether the Minister can say whether, under the Bill, it would be the policy to spend some of these capital sums to help old people and widows living alone, who worry about meeting substantial electricity bills and would greatly appreciate having pre-payment meters.

I wonder whether the installation of a substantial number of pre-payment meters is being considered. In some areas, particularly in Glasgow, the board has been extremely courteous, helpful and sympathetic in admitting pre-payment meters in cases of individual hardship. Would the Minister tell us whether it will be the policy of the South Board and the North Board to permit the continuation, and, if need be, the installation, of pre payment meters in individual cases of hardship?

Mr. Deputy Speaker (Mr. Sydney Irving)

Mr. Dempsey.

Sir Harmar Nicholls (Peterborough)

On a point of order. Will the discussion on the Prayer which is to follow this debate on Third Reading of this Bill have to finish at 11.30?

Mr. Deputy Speaker

Yes. Any time taken on Third Reading of the Bill must come out of the time which could other wise have been spent on the Prayer. The Chair is required to put the Question on the Prayer forthwith at 11.30, or adjourn the debate on the Prayer.

Sir Harmar Nicholls

Yes. I am wondering whether there is any way of letting our colleagues know that that must happen.

Mr. Deputy Speaker

I think that the hon. Member's point of order will have achieved that purpose.

10.46 p.m.

Mr. James Dempsey (Coatbridge and Airdrie)

I am sorry to burden the House at this time, but the point I am about to make I was precluded from making in the Scottish Committee on the Bill. I think that that was due to some collusion by the interests concerned, but it leaves me with no alternative but to make the point now.

It is this. To what extent will the sums to be raised because of the Bill be used or deployed to modernise the service department of the electricity authority in Scotland? This is a question which should be raised in the House, late though the hour is, because in my part of Scotland we have the electricity authority so under-modernised that it is compelled to farm out to private enterprise many aspects of its work. This seems to me a very unreasonable state of affairs.

A few years ago we had a strike of the workers in different parts of Lanarkshire because 200 men were paid off because there was no work for them, and there was no work for them because it had been farmed out to private enterprise, and it was farmed out to private enterprise be cause it had up to date, modern equipment to do it, and the public electricity authority had not. At the moment on a housing estate in my own constituency private enterprise is cabling the electricity service, not the public authority. I under stand from a trade union official that matters have worsened, and that electricity wires—

Mr. Deputy Speaker

Order. The hon. Member is going wide of debate on Third Reading, which should be confined to what is in the Bill. He is going into a great deal of detail which may have been appropriate at an earlier stage of the Bill, but is not appropriate on Third Reading.

Mr. Dempsey

I understand that by the Bill we are enabling the electricity authorities to raise certain sums of money. I would have thought it in order to talk about how the money would be spent.

In calling for the prudent spending of public money, I thought it right to illustrate a problem which is facing Scotland. Any electricity authority which proposes to borrow the large sum with which we are concerned tonight should be able to equip its departments so that they can provide a proper service to the public. I am not criticising private firms for being equipped to offer a good service. I merely want an assurance that a reasonable sum from the amount which is to be borrowed will be used to obtain the most modern equipment so that the electricity authorities serving Lanarkshire and other parts of Scotland can do the job for which they were established.

Several Hon. Members


Mr. Deputy Speaker

Order. Mr. Eadie.

Mr. Hugh Jenkins (Putney)

On a point of order. May I point out, Mr. Deputy Speaker, that this is the last day to debate a Prayer, that the Children (Performances) Regulations are delegated legislation, that this is the only occasion on which the House has had an opportunity of discussing this matter and that, when speaking, hon. Members should recognise that this issue has never been discussed in the House?

Sir David Renton (Huntingdonshire)

Further to that point of order. I wonder whether the hon. Member for Putney (Mr. Hugh Jenkins) could enlighten the House about whether attempts were made to get a Prayer put down at an earlier date than this, which is the last possible occasion.

Mr. Hugh Jenkins

Indeed they were. The first date when a Prayer on this matter was tabled was 12th November.

Mr. Deputy Speaker

Order. These are not points of order. However, I hope that hon. Members have noted what has been said. Mr. Eadie.

10.52 p.m.

Mr. Alex Eadie (Midlothian)

I wish to be brief, so brief that I could have completed my remarks in the time it has taken to deal with those points of order.

I am prompted to intervene following the Minister's remarks in Committee about another power station for Scotland. The name of Inverkip has been mentioned. In Committee, I asked my hon. Friend if he could make a statement about the possible siting of the station and how it would be fired. I understand that a final decision about whether the power station will be oil or coal fired has not been taken, but that coal is still receiving consideration. Will the Minister now make the position clear?

10.53 p.m.

Mr. Robert Maclennan (Caithness and Sutherland)

I, too, wish to be brief and will confine myself to asking the Minister two questions.

First, to what extent will the extended borrowing powers under the Bill be used to advance the connecting-up programme throughout the Highlands and Islands? The Government have made great progress in this matter. The North of Scotland Hydro-Electric Board has a fine record of bringing light and power to the most remote parts of the Highlands, but there are still places waiting to be connected. The North of Scotland is interested to know whether the connecting-up programme will be advanced by the Bill.

Secondly, will the arrangements which the board has made with British Aluminium be a model for further developments of power-intensive industries in the Highlands and Islands? As is known, special arrangements have been agreed with British Aluminium for the supply of power and the initial statement of the Prime Minister suggested that new industries of an import-saving variety might be able to enjoy similar terms. It must be remembered that the powers of the Board to assist incoming industry are somewhat limited; and the Bill may greatly extend the powers.

The scope of the grant and loan schemes of the Highlands and Islands Development Board is somewhat limited and I hope that the Bill will have considerable value in attracting new power-intensive industries.

10.55 p.m.

The Minister of State, Scottish Office (Dr. J. Dickson Mabon)

The tariff to which my hon. Friend has referred is of such a nature as to be attractive to the industry. While I cannot reveal all the facts about it, because of its confidential character, I confirm that it is advantageous to the industry, while, at the same time, it will not be a burden on any individual consumer. Perhaps that will meet the point of the hon. Member for Glasgow, Cathgart (Mr. Edward M. Taylor), who was arguing about the individual industrial consumer. The figures which he quoted were average figures. I have had letters pointing out that some are above the average, but others are lower than average. I think that the kind of industries which my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) had in mind will come into the latter category. I am sure that we all hope that the smelter will be a considerable success and will attract other power-intensive industries to the Highlands.

The tariffs are a matter for the Board to decide and are not for the Secretary of State, but I have no doubt that the Board will take account of the views of the hon. Member for Cathcart and other hon. Members when next reviewing the tariff structure. I think that the Board would be right to seek to please the consumers by phasing out the prepayment meter system, while at the same time accepting that there are special needs which should be met. This is a matter which should be left to the Board.

My hon. Friend the Member for Coat bridge and Airdrie (Mr. Dempsey) asked about the Board's investment programmes. These are settled each year and the spending priorities are set having regard to national economic factors. My hon. Friend the Member for Bristol, Cen- tral (Mr. Palmer) was a little unfair when he suggested that in Committee I argued that a computer did all the work for us. I was trying to explain how we sought to arrive at these decisions stage by stage. I hope that my remarks did not lead hon. Members to believe that once we had reached the stage of the computer, that would be the end of that and the decision would be made for us. There are special factors, especially social factors, to be taken into account, and I think that my hon. Friend the Member for Midlothian (Mr. Eadie) will endorse my view that these are factors which should be taken into account by Ministers, but which cannot be assessed by computers. That is one reason why an independent commission might not be the best way to make these decisions. Such a commission might well reach a good arithmetical decision, but I doubt whether it could evaluate all the social considerations which are behind many decisions which are taken, and which have been taken, about thermal economics.

The hon. Member for Cathcart mentioned the high price of coal in Scotland and reflected on the fact that the price of electricity to the domestic consumer was low when compared with that in other parts of the United Kingdom. This is an example of the difficulties which we have in Scotland and of our efforts to resolve them.

My hon. Friend the Member for Bristol, Central asked about the margin of capacity for planning purposes. I con firm that the margin of capacity of the Central Electricity Generating Board is 17 per cent. In Scotland, we have been working to a minimum of 14 per cent. but, due to the larger sized generaing sets now being installed, this means in practice a margin of between 14 and 20 per cent. We are now actively considering the margins to be adopted for forward planning purposes.

I confirm what my hon. Friend the Member for Midlothian said about In-verkip. We have not made any final decision. The whole purpose of the Bill is to retain flexibility, voting the money without being specific about the kind of fuel, or where the new power stations of the future will be built. We work closely, of course, with the Minister of Power. While we in Scotland have our own views about things, we naturally take into account his thinking and try to arrive at an essentially Government decision.

I confirm that we are making strenuous efforts, with the Hydro Board, to improve the flood warning systems. The Board has shown itself ready to give all the assistance it can. The increases in the size of natural lochs brought about by its activities and the creation of artificial lochs by damaging have held water back in reservoirs and have contributed to the delay in the rise in floods. The level of the peak discharge from these installations has of course been controlled and has helped to reduce the danger and intensity of flood damage. At no time should the peak flow downstream, including the run off from the catchments below the dam exceed the peak flow which would have occurred at that time had the dam not been built. By anticipating flood conditions and releasing water from the reservoirs in advance, it may also be possible for the Board to create additional water storage capacity and so reduce the size of the peak ffow in the river downstream.

In the floods of December, 1966, the presence of the Board's installations and the way they were operated helped to reduce the bad effects of floods. This is an important part of the Board's function, and one that it takes very seriously.

Within the context of the Bill, we hope that the Board will continue its efforts in this regard and over the other matters which have been raised.

Mr. Gordon Campbell

I thought that the Minister of State was going to say something about the increase in the electricity required because of the aluminium smelter, because one publication said that the output would be increased, I think, 100 times. That must have been a mis take.

Dr. Mabon

The hon. Member is right. Having looked into the matter, I find that the mistake was caused by misinformation on the part of the company concerned. The figure should have been three times, and not 30 times. We shall see that the appropriate correction is made. The points about the coal capacity and British Standard Time have all been taken into account.

Question put and agreed to.

Bill read the Third time and passed.

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