HC Deb 12 July 1971 vol 821 cc156-65

Question again proposed.

Mr. Younger

The hon. Member is quite right, but this is by no means a unique situation. Many industries pay fuel tax or other tax and find a competitor which does not pay the same tax on a similar or different product. I appreciate the point, but this is not a unique situation.

Mr. Douglasrose—

Mr. Younger

I am sorry, I had better get on. I have many points to which to reply.

I was asked also about the use of natural gas. This is a matter of general fuel policy the aim of which is to have the optimum use of all resources, including this new natural resource, which has come to Scotland and is now in use. With the hon. Member for Greenock, I was pleased to be present at the opening of the first factory in Scotland to be constructed to use natural gas.

The present policy is to concentrate on the premium markets—that is, domestic consumers—where the national benefit is the greatest. Use of natural gas in power stations would be a matter of negotiation between the electricity boards, the Gas Council and the gas boards, which have the statutory right to purchase from producers and whose consent would be required to any direct purchase arrangements. Applications from an electricity board for the conversion of a power station to burn natural gas instead of coal or any other variant of the various fuels would be considered in exactly the same way as requests for conversion to oil-firing are considered—that is to say, taking into account all the possible consequences, including the social consequences of all kinds and the possible social consequences on areas which are dependent on a great deal of mining employment.

The hon. Member for East Stirlingshire also asked what was the cost to the Boards due to any failures on the part of suppliers, in particular in the context of the failures at Longannet. I know that this is a matter which causes considerable concern to many hon. Members. It has been a great disappointment to the South of Scotland Board that it has had three failures at Longannet during the last few weeks.

The No. 1 generator was shut down about a month ago because failure of a heat exchanger admitted water instead of steam into the turbine, causing damage to the rotors and the casing. More recently, faults developed in the turbines of Nos. 2 and 3 units, both of which probably have bent shafts. The trouble here stems from overheating caused by faulty or overtight glands.

As to future operations, the Board expects that Nos. 2 and 3 units will be repaired and in service towards the end of the year. No. 1 unit, which is more seriously affected, should be in operation early in 1972 and it is hoped that at that time No. 4 unit, which is building, should be completed and start operating.

I must make it clear that responsibility is entirely a contract matter between the Board and their suppliers. This is something that the Board must argue out with their suppliers if the causes and the extent of damage which may have occurred are properly established. It certainly would not be proper for me to interfere or to suggest that either one side or the other was more to blame, if, indeed, blame is attached to anyone.

Mr. Douglas

I recognise that the hon. Gentleman uses the word "interference" circumspectly, but his Department was aware of the contracts and surely knows whether they have penalty clauses concerning equipment or failure to adhere to specification. He ought, therefore, to be able to give us a direct answer whether these causes are covered in the contracts.

Mr. Younger

All contracts contain various provisions of that sort. I cannot tell the hon. Member—I do not think that anyone can yet, not even the people in the Electricity Board—whether the defects or the troubles which have been caused are likely to come within the ambit of any penalty clauses, damages or anything like that. This is a matter which will have to be left until investigations into what actually happened are more or less complete.

The hon. Member for Bristol, Central mentioned contracting and retailing in the electricity industry. I repeat what my hon. Friend the Minister for Industry said about this some time ago when he assured representatives of the employees and consumers, that is to say, the chairmen of the electricity consultative committees, in England and Wales that they would be consulted before any action was taken to hive off any part of the industry. I give an entirely similar assurance in respect of the contracting and retailing operations of Scottish Electricity Boards, that is to say, that the consumers' councils would be fully consulted before any decisions were taken. The contracting and retailing activities of the Boards are under review, as the House knows, but we are not yet in a position to say when the review will be completed. I can say only that no decision will be taken until after appropriate consultation with all concerned.

The hon. Member for Midlothian (Mr. Eadie) made some interesting comments on the subject of Inverkip. I have no reason to doubt the availability of supplies for Inverkip power station when it eventually comes into operation, but this is entirely a matter for the Electricity Board itself and presumably it is satisfied about the supply position, or it would not be pressing as it is, as is shown by its report, for conversions.

The hon. Member for Motherwell raised the important issue of the practice of the South of Scotland Board of asking for security deposits and so on when making consumer connections. This is a matter for the Board itself, a matter of commercial running, but I recognise that it causes considerable public disquiet from time to time. The Board has a consumers' consultative council and representations may be made to the council at any time. In general, it has been consulted about the Board's schemes now in operation and it has accepted the Board's general policy in these matters. However, it will certainly be ready to consider individual cases which are reported to it.

There have been complaints about the Board's policy of asking for security deposits or guarantees from new consumers. This is entirely a matter for the Board. Outstanding debts on electricity accounts on 8th April, 1971, amounted to £4 million compared with only £1.5 million a year earlier. Most of this increase was probably due to the period of the postal strike, but £500,000 was six months' overdue, very much in excess of anything which could be attributed to the postal strike.

In 1970–71, £350,000 bad debts had to be written off and in 1969–70 the figure was £423,000. It is to protect other consumers from having to bear these bad debts that the Board has instituted the practice of asking for deposits or guarantees. The Board would be most willing to receive representations of any kind from hon. Members on this subject, but I must repeat that the consumers' consultative committee accepts the Board's purpose in taking such deposits and in general approves the Board's action.

Mr. Lawson

Can the hon. Gentleman say whether this practice is engaged in by other Electricity Boards?

Mr. Younger

In other Electricity Boards? I could not answer for Boards in England and Wales. The hon. Gentleman will have to ask the relevant Minister about that. However, I am not aware that the North Board has the same scheme as the South Board. Again, if the hon. Gentleman wants further details, I shall write to him about it.

Dr. Dickson Mabon

Will the hon. Gentleman look at the representations which have been made by the Association of Directors of Social Work in Scotland, which is very concerned about this matter? Perhaps the hon. Gentleman will write to us about it, since we, too, are worried.

Mr. Younger

I appreciate the concern. This is the sort of matter which is brought to Members of Parliament, and it is essential for them to have proper facilities to deal with it. I shall be happy to look into it and write to the hon. Gentleman.

The hon. Member for Greenock asked for one or two details about the con- struction programme. He asked about the Foyers scheme, which is a North of Scotland scheme. The construction of the station on the shores of Loch Ness is well under way, and the station is expected to be in commission in 1974. As the hon. Gentleman will remember, it has two 150-MW reversible sets installed in a shaft below the level of Loch Ness. The scheme will use Loch Mhor as the upper reservoir and Loch Ness as the lower reservoir. It will require a labour force of 500 until 1974.

The hon. Gentleman also asked about the Stake Ness project. I know from my hon. Friend the Member for Banff (Mr. W. H. K. Baker), who has been to see me, and from other hon. Members who have raised the matter from time to time that there is concern about the pace at which the project appears to be going ahead. I can assure hon. Members that there has been no hold-back in the process of evaluating the best form that the station shall take. At present the studies as to the best type of station for the job that it will have to do are well advanced. I hope before long to get final estimates and tenders based on the various different alternative models that we are trying to assess. As far as we can see, the project has to be evaluated as to the type of station that it will be. But there will be no delay in going ahead with its construction.

The hon. Gentleman also asked about the Loch Lomond scheme. That is at an earlier stage of consideration, and there are a number of technical problems. However, the studies are going ahead well and I have reason to think that at the end of the day a scheme will be brought forward.

Dr. Dickson Mabon

Is the site in Banff in any doubt? Can the hon. Gentleman give us any time scale with regard to Loch Lomond?

Mr. Younger

I cannot give a time scale for Loch Lomond. It is at too early a stage to see the likely time scale. There is no doubt about the site at Banff, by which I assume that the hon. Gentleman means the physical site.

Dr. Dickson Mabon

Yes.

Mr. Younger

There is no doubt about that. But we are at the stage of trying to work out whether a steam-generating heavy water reactor will be right or whether another form will be best. Within the broad limits of those several alternatives, we are getting on reasonably well with it.

Most of the other points on which we got into a fairly useful discussion, I think, came under the heading of the alleged complaints about interference with which the hon. Member for Bristol, Central said that the Report of the South Board was riddled. Here, both sides of the House are in difficulty. I said earlier that it was our policy to interfere as little as possible with the nationalised industries. I reassure the hon. Member for Motherwell that that is our policy. We want to leave these industries as much as we can to get on with the job and to act commercially as far as they are able.

There is a misconception about what acting commercially means. One or two hon. Members opposite appear to think that acting commercially means being able to put up prices without let or hindrance whenever one feels like it. If hon. Gentlemen opposite think that that is how an ordinary commercial undertaking carries on, they cannot have worked for one. If they had, they would have found that there are innumerable reasons for putting up prices and far more reasons why it is impossible to do so, either because one's competitor has not, because the market will not stand it, or because sales will go down, and therefore, the profitability of the business, too. To think that an industry which is nationalised and which has to take into account social factors in its pricing policies is acting uncommercially because of that alone is a complete misconception. Commercial concerns have all kinds of inhibitions about what they can do in these matters. Electricity boards are no exception.

When we come to what the complaint was the matter becomes most interesting. It seemed thatt he hon. Member for Motherwell was pressing me, and also my predecessor who was there to take his medicine, that we should not be interfering with the running of these industries. That struck a sympathetic chord in my mind.

Two things have stuck out in previous debates on these matters. We have had excellent, articulate and persistent requests by the hon. Members for Midlothian, Edinburgh, East (Mr. Strang), Dunfermline Burghs (Mr. Adam Hunter) and many others that we should interfere with the antionalised industries on social and on many other grounds. Taking it one stage further, I had always thought that one of the great advantages alleged to be gained from nationalising industries was that the Government could interfere and make them work for social and other reasons. If, on the one hand, the message is that we should never interfere, we cannot fulfil what is alleged by hon. Gentlemen opposite to be one reason for nationalisation. If, on the other hand, we are to interfere, as the hon. Member for Midlothian suggests, I am prepared, as I have often said, to consider requests to change the fuel supply at the power stations, giving the widest possible consideration to all factors, including social factors. This is what we are, and intend to continue, doing.

Mr. Lawson

The hon. Gentleman knows that we have already said that where an industry is to operate with other than commercial considerations, as this industry is to operate, it should be done openly. If the industry is being made to subsidise the community, as in many cases this industry was, then it should be done openly. I am sure that the hon. Gentleman will not quarrel with that, but it puts a different light on the argument which he has presented.

Mr. Younger

I will not quarrel with that. This is merely another factor in the difficult triangle of considerations which we have to work out in these matters. However, we cannot get away from the fact that when an industry is publicly owned, as this is, for better or for worse, the Government of the day have certain responsibilites towards it. I am trying to discharge those responsibilities by taking the widest possible view of the public interest.

We have had an extremely interesting debate on all these matters. We may not agree on everything, but I think that we agree that the Order is necessary and desirable and that we wish the Boards every success in their coming years of activity. I hope that the House will now approve the Order.

Question put and agreed to.

Resolved, That the Electricity (Borrowing Powers) (Scotland) Order, 1971, a draft of which was laid before this House on 8th June, be approved.

    cc164-5
  1. MEDICINES (SURGICAL MATERIALS) 23 words
    2. c165
  2. HOUSING BILL 6 words