Which Amendment was: No. 13, in page 5, line 22, at end insert:
(2) In granting approval for such programme as referred to in the foregoing subsection the Secretary of State shall have regard to the effective national co-ordination of all fuel and energy supplies at present available or to be developed in the future.—[Mr. Varley.]
§ Question again proposed, That the Amendment be made.
§ 11.3 p.m.
§ Mr. T. H. H. Skeet (Bedford)
When I was dealing with this matter last week I promised to be comparatively brief, so I hope that the example I shall set will be emulated by hon. Members opposite.
On Friday I spoke of the prospect of having a few run-offs on the review of energy policy. The Minister said that he kept the matter under constant review. Run-offs are essential. I said on Friday that 1967 was the last occasion when a certain number of factors were brought forward which gave an idea of what 394 should be done. Since then little has been forthcoming.
Several matters of major importance should be taken into account. What is the Government's policy on the importation of LNG? Is it to be derived from North Africa? The present reserves in the North Sea appear to be 4,000 million barrels of oil and up to 50 trillion cubic feet of gas, capable of sustaining a rate of production in the 1970s of 1.4 million barrels a day.
The next factor to be considered in the run-off would be the selection of the reactor systems for nuclear power stations. What advance have we achieved in coal technology; because this might be of great importance to the coal industry? There are trade factors which are of vital interest.
Imports from Gulf oil producers, other Middle East States and North Africa totalled £3,910 million in 1970, of which the United Kingdom received a large share. We sent a considerable volume of exports to the Middle East. It is important that all these matters should be considered.
The Minister has been tardy in disclosing his views to the House about what should happen. He has not been in office for long, and we wish him well. We hope that he will spend many years in his post. His predecessors did not bring forward a fuel policy. Although it may not be appropriate to consider the implications of an oil policy in any discussion of Clause 5, a little haste should be made in considering these matters. What is the significance of the North Sea? [Laughter.] Hon. Members have that spirit of levity this evening which augurs ill for the length of the debate.
There seem to be eventual reserves, if we accept the view disclosed in the 395 Financial Times recently by Mr. M. M. Permell, the Managing Director of BP, who said that eventually there may be about 20 billion barrels. If we measured the resources of the Middle East we should find 18.5 times that quantity of oil already present in its reserves. One of the cardinal factors on which we must rely is that the United Kingdom will continue to import heavily from the Middle East and North Africa, although we shall receive considerable benefits from the North Sea.
It has been said that we are in the early stages of exploration. There is a lot more to come and there might be many surprises. A lot of money may be made, and a lot may be lost. What we are concerned about is the stability of reservoirs. Lock ton has been a shock to us all. Are all the reservoirs which have been discovered there likely to sustain the daily output recorded? We are delighted that the North Sea is likely to bring a contribution to our balance of payments of about £500 million per year in the 1980s.
There is a great misconception about the shortage of energy. There is no shortage of energy. After 2000 AD oil may run out, but it may go well beyond 2000 AD. We can fall back on the considerable supplies of coal available, and there is natural gas. The balance, if it is not derived from the North Sea, from the Continent or from the USSR can be brought to these shores as liquefied natural gas. Then there is all the potential of nuclear energy. There is also the Athabasca oil sands, and oil shales. It is quite wrong to say that there may be a shortage of energy overall; it is pertinent to say that there may be a shortage in one particular supply. It may be in oil eventually, or in natural gas, but other lines of energy will become available to supply our requirements. Our requirements are that we must have a constant supply of cheap energy from many sources, and we must have a stable source of supply.
I shall support the Minister if he adopts the view that in considering the approvals under Clause 5 the Government will have regard to the national co-ordination of all fuel and energy supplies available or developed in the future, but I am 396 against the Amendment being written into the Bill.
§ Mr. J. D. Concannon (Mansfield)
The Friday "regulars" who have been following the Bill through on Friday afternoons will find it pleasurable to be discussing it at a more convenient time in the evening. I congratulate my hon. Friends who have placed the Amendment on the Order Paper. It is far-reaching and worthy of the widest possible discussion.
We must remember that the Amendment has been tabled because of the fears of the industrial areas of the East Midlands, the North-West and Scotland. In terms of fuel policy, what they see now is not a step forward but a step back. We are perturbed when we read the statements of such people as the Chairman of the Central Electricity Generating Board and the Chairman of the Gas Board. Government Departments, which should be taking more control of fuel policy, are opting out and seemingly allowing the Chairman of the CEGB to dictate the fuel policy that he wishes to pursue in power station development.
It is that aspect which causes apprehension amongst hon. Members. It affects our constituencies. I represent a constituency in North Nottingham shire, where the editorials and correspondence columns of local newspapers show clear evidence of the worries about a national integrated fuel policy. It must not be forgotten that there are still areas of the country totally dependent upon the correct decisions being taken about our fuel policy, and the fears manifest themselves in the local Press and at all one's meetings. One had to look hard in the national Press recently to find reports of a speech by Mr. Ezra in Washington, D.C. In my local weekly newspaper it was reported verbatim, nearly a whole page being devoted to it.
We are perturbed about the assets in our areas. In the Notts coal field, for example, a new reserve of 82 million tons has been discovered. Nature has been very kind to Nottingham shire. We have coal reserves, and we have the river. Thanks to past Government policies we have a fair number of coal-fired power stations. We may talk about nuclear power and about gas and oil-fired power stations, but there are none cheaper than the coal-fired stations along the river Trent.
397 It is foolish to waste our natural assets. The present state of affairs is very sad. We have the CEGB going out on a limb, with coal imports running at between 8 million and 9 million tons a year. That coal is costing more per ton than the board would have to pay for coal mined on its own doorstep.
On Friday my hon. Friend the Member for Chesterfield (Mr. Varley) discussed other fuels, and he said that the days of cheap oil were over. He used the word "blackmail", and I appreciate the terms in which he used it. But the days of cheap oil are over for the simple reason that at the very beginning the oil——
§ Mr. Neil McBride (Swansea, East)
My hon. Friend the Member for Mansfield (Mr. Concannon) is putting forward a powerful economic argument for the Nottingham shire coal fields and the indigenous fuel to be found there. But is he saying that that would be a better proposition than being too heavily dependent on, say, expensive imported non-sulphuric oil from Libya?
§ 11.15 p.m.
§ Mr. Concannon
That is entirely the argument which I am developing, and I am saying that it is foolish to waste our national assets against over-dependence on oil. We are becoming far too over-dependent on oil and other imported fuels, while we are running down the coal fields. As I develop my argument, I can see reasons why this country will be forced to run down the coal industry even further. I shall say some more about that later.
The days of cheap oil from the Middle East are gone; the people who live in those countries have learnt a lot in the past few years. Western countries have used their know-how and business techniques to get oil pretty cheaply from those countries. Now we are beginning to pay the right price, possibly, for that oil.
I have visited those countries to see their economic state. For centuries they had nothing but desert waste, and now, all of a sudden, they find they are among the richest nations per capita, in the world. I do not blame them for using their position. The days of cheap oil are over and we must plan fuel policy with this in mind.
398 Many of our colleagues argued that our expensive nuclear power programme was too large in the first place, and that, instead of being experimental, it was shoved into the energy market without experiments being properly done. The programme has proved more and more expensive as it goes along. I should like to see the Department take careful note of this Amendment which shows the fears of many of us in this country.
If we pull back, and do not keep control over the Chairman of the CEGB and he is allowed to go on the free market for fuels, it will be to the detriment of many in this country and certainly to the detriment of my area and of Nottinghamshire as a whole.
The other part of this matter which is worrying us is the importation of coal through the CEGB and others, running to 8 million or 9 million tons a year and that we are paying more for it. One can see that even if we stop the import of coal now, from the early discussions on the EEC Bill—and we have only had two hours to talk about coal and steel matters in that Bill—I am right to be perturbed about a co-ordinated fuel policy when we go into the EEC. This also needs careful watching.
From my reading and knowledge of the EEC Bill, I would say it would have been impossible to settle the last coal mines strike if we had then been in the EEC. When we are in the EEC, the present policy of the Community and the non-allowance of subsidisation could well mean that the EEC will force our hand and close even more mines, if we are not careful. That is what happened in France and Belgium. They are dependent on integrated fuel policies in the E.E.C. to the extent of 80 per cent. of the fuel.
§ Mr. Concannon
They were reduced for economic reasons. The same economic reasons will apply in this country when we are in the EEC.
§ Mr. Concannon
We shall find out. If we are still together when the effects of entry into the EEC are applied to the 399 coal and other industries we can discuss the matter. That will probably be in two or three years. Of course, I shall be on the other side of the House and the hon. Gentleman will be over here in Opposition, and I shall be offering the excuse that it is because we are in the Common Market.
§ Mr. Concannon
My hon. Friend can make his own speech later.
The Minister has said that our energy policy is continually under review. I hope he means that. Many of us are deeply involved in our areas because we represent what might be termed "one industry" areas. It is, so to speak, our industry, our town, our life. We are very perturbed when we see not only a tightening of the reins on this industry but a slackening off, because it constitutes our livelihood, our being, and the welfare of the areas we represent.
We would like the Amendment to be accepted, or, if not, at least an assurance from the Minister that he recognises the fears behind it and that he will look at it closely.
§ Mr. David Stoddart (Swindon)
I was surprised to hear the hon. Member for Bedford (Mr. Skeet) say that we had ample fuel reserves in the world. It might seem like that to him now, but Western industrial societies, with their voracious appetites for energy, will use up those reserves very quickly unless some conservation policy is adopted.
I do not want to widen my argument. The Amendment refers to a national fuel policy. We urgently need a national fuel policy, Indeed, that policy is well overdue.
Having worked in a nationalised industry, I have always been impressed by the absurdity of competition between nationalised fuel industries. Such competition is completely and utterly nonsensical, wasteful of effort, and in no way gives the consumer the benefits he should derive through nationalisation.
I have always thought it odd that a person would go to an electricity showroom and be told, "This is the best fuel for you", could then go to a gas showroom and be told the same, and, in addition, have the National Coal Board tell 400 him that coal is the best fuel for him. The poor consumer does not know where he stands. If he believed all three, he would have a mixture of fuels and probably have the worst of all worlds. From that point of view alone it would seem that we need co-ordination and a national fuel policy.
We need to conserve our supplies of energy, not waste them. World fuel reserves are being exhausted at an alarming rate. On Friday myhon. Friend the Member for Chesterfield (Mr. Varley) said that the United States would shortly be importing a great deal of oil from the rest of the world, and their appetite will grow and not diminish. As the underdeveloped nations of the world develop so their appetites for the world's fuel resources will grow and they will feel entitled to their fare share of them.
The Under-Secretary of State said on Friday that the Secretary of State took into account overall fuel policy. I should hope so. What is he there for if not to do that? But I am not sure that his Department is properly equiped to do the job. We have not yet seen the end of the problems caused by the disastrous fuel policies pursued by the Department in the 'sixties. The effects of those policies are still with us, and they will be for some time to come.
What we need is a national fuel authority, free from day-to-day political pressure, but subject to overall parliamentary control. Such an authority would consider our energy requirements, the resources available to meet those requirements and the need for fuel conservation. The national boards would be subservient to the authority.
I think, too, that if such an authority were brought into being, and if we were able to pursue a proper national fuel policy, the oil industry would have to be taken into public ownership. Without that, but with all the other forms of fuel being nationalised, a national fuel policy would not be possible. I do not expect right hon. and hon. Gentlemen opposite to agree with me about this, nor do I expect them to take steps to bring that about, but I am confident that my right hon. Friends will soon be on that side of the House and that when they are they will be prepared to put such progressive and necessary policies into effect. 401 My hon. Friend the Member for Mansfield (Mr. Concannon) said that the chairmen of the nationalised fuel boards are making the running. Under the present system they make the running because they have to do a particular job in a particular way and get a certain return on capital. They therefore try to produce their fuel at the cheapest possible rate so that they are competitive and can meet the targets set by the Government. In defence of them it must be said that they have to make the running, but my hon. Friend is correct in saying that they should not have to do that and that it is Parliament and the Government who should be making the running and deciding what fuels should be used for particular purposes.
When we debated this matter on Friday, my hon. Friend the Member for Chesterfield queried the use of natural gas for the generation of electricity. On the face of it it sounds a sensible thing to do, but I, too, query this policy. I have always felt it to be rather absurd that someone takes agas, puts it into a furnace, converts it into heat to boil water which is then converted into a gas which drives a steam turbine which is connected to an alternator which turns out electricity. Why on earth should one change a gas to something else and then back to a gas to produce that sort of power? Furthermore, by so doing, far from conserving energy one is wasting it very badly.
Our newest and most efficient power stations have an overall thermal efficiency of no higher than 40 per cent. It takes some doing to reach even that figure. But the present proposal is not to burn natural gas in our most up to date power stations but to burn it in some of our old ones where the thermal efficiency is as low as 20 to 25 per cent. Therefore, by the conversion of natural gas into a flame and back to gas one is wasting between 60 and 75 per cent. of the heat value of that fuel. That is entirely and utterly wasteful.
The Chairman of the CEGB will persist that he wants to be free to use whatever fuel suits him best. He ought not to be allowed to make that decision without the intervention of Parliament through a national fuel policy.
402 There is a need for a national fuel authority in many other respects as well. Although what I shall say may seem a little out of order, I think that it will not be found to be out of order. A national fuel authority ought to be reviewing some of the policies being pursued day to day by the nationalised boards. Let us take as an example the CEGB. At present it is pursuing, and has pursued over a long period, a policy of building large generating sets in large power stations, 500–600 megawatt sets in power stations of 2,000 or more magawatt capacity. It is essential for this sort of undertaking to be sited near estuaries or in other areas with large cooling water supplies. The CEGB builds these large power stations because, it says, it is cheaper to transmit electricity than to transmit coal. But we have to balance the overall efficiency with strategic and environmental considerations and to take into account the fuel reserves available.
In energy terms, I believe that our largest indigenous reserves are of coal. If we are to make use of the largest reserves we have, we should be concentrating on our coal powered stations We should be saying "No" to oil and we should be re-examining very critically the nuclear power programme to see, first, whether it is viable and, second, whether it is safe for the community.
My point is that the CEGB is constructing these large generating sets in large power stations because it can obtain a better overall thermal efficiency. But it would be very much better for the country—and the countryside, because we should have fewer straggling pylons all over the place—if we built smaller generating sets in various parts of the country. It would certainly help the load balancing problems which exist when huge loads of electricity are transmitted over vast tracts of countryside. The small loss of overall thermal efficiency would not matter too much bearing in mind that the fuel being used was an indigenous fuel, which would not be denied to us in time of war and which is readily accessible; indeed, a fuel which would provide jobs in areas which are socially deprived.
The Government should seriously consider the problems of our fuel industries and energy requirements. I hope that they 403 will do that as a matter of urgency because time is running out very fast. If we are to meet future needs, we require an overall fuel policy, and I trust that the Government will seriously consider setting up a national fuel authority, whether or not they nationalise oil.
§ Mr. Robert C. Brown (Newcastle-upon-Tyne, West)
At some time in our lives we are all guilty of not wishing to hear the toll of the bell ringing out a truism unless it confirms all our previous thinking, and when the bell tolls all our previously conceived notions or prejudices take charge of our thinking. In political terms, it could be described as burying one's head in the sand or taking up an ostrich-like posture—and this can leave a certain part of the anatomy dangerously exposed. Friday, 11th March, saw some hon. Members conforming to the description I have just given when the Minister informed us that, based on all up-to-date forecasts and information, the bonanza of the North Sea gas fields would dry up in 20 years. This was a serious statement which we can disregard only at our future peril.
Nevertheless, here we have a tremendous source of energy which we must utilise to the full and prudently. Euphoria on the finding and subsequent use of North Sea gas has landed two of our European neighbours—France and Holland—in the cart, almost up the creek without a paddle. France, having planned a demand rising at 20 per cent. a year, is faced with the realisation that come 1974 there will be a serious shortage of natural gas. Holland was so intoxicated with its discovery that immediately it dismantled its other indigenous source of energy—its coal industry. Its enthusiasm was to an extent understandable since the Groningen field was reputed to be the biggest or among the largest in the world, estimated to have a life of 25 years plus and ready to yield between 100,000 million and 105,000 million cubic metres a year. But only in May the Minister for Economic Affairs in Holland had to tell his Parliament that the yield was 22,000 million cubic metres less.
The way in which we use our find has always been a matter for debate. "Use it for power stations" has been one of the loudest parrot cries from the benches opposite. "Encourage industry to share 404 in the bonanza". One could feel in all the arguments which have been put forward as to how we should use this bonanza from the bed of the North Sea a cold-blooded commercial judgment, and this has come into play in almost all our debates in the House.
Large-scale capital is employed in the landing and piping of this wonderful natural resource which we have recently discovered. The discovery, however, must be kept in perspective in relation to our total energy needs. Valuable though it is, its value to our demand will be small. We shall never have a bottomless pit upon which to draw. It is expected to cover about 15 per cent. of our energy requirements, equal to about 60 million tons of coal equivalent. The lessons learned elsewhere are lessons from which we must surely profit, or neglect at our peril. A policy of indiscriminate use would perhaps give short-term commercial advantages but would be a nonsense in the long term since it would mean a rapid contraction in the coal industry.
I will hazard the guess that we have yet to feel the full draught from the rundown in the coal industry of the last few years. I can certainly speak for my own constituency and for other constituencies in Northumberland. We have had many unhappy individuals and many unhappy homes as a direct result of the precipitate closure of collieries, closures which need never have been carried out if Britain had had a national co-ordinated fuel policy.
§ The Under-Secretary of State for Trade and Industry (Mr. Peter Emery)
Is the hon. Member suggesting that under the Labour Government's fuel policy White Paper—the last one which they produced—there would have been no colliery closures? Part of the whole policy which was criticised by many hon. Members on the Labour side was the rundown of the coal industry that their supposedly co-ordinated policy was bringing about.
§ Mr. Brown
I am surprised that the Minister should suddenly get so prickly, because I am not criticising closures under the present Government. I am criticising closures in recent years under both Governments, and I do not spare my own Government in that criticism because I believe that they acquiesced far too much in the demands of the then Chairman of the National Coal Board.
405 If suitable alternative jobs could be found for our miners I would take no exception to closures, provided that they were in the national interest, and provided that we had alternative sources of fuel. Pits cannot be closed down like turning off the gas. Pits are not factories, simply waiting for a new tenant after the old one moves out. To close a pit is to destroy it for ever. Fossil fuels are a wasting asset and this is an argument for using them with care.
Any confusion about the use of North Sea gas is dwarfed by the misconceptions which exist about the use of the new discovery of oil in the North Sea. It is not yet known what will be the life-span of the discoveries. Everyone in this country must hope, as I do, that the bed of the North Sea is swimming fathoms deep in oil. But, whatever the extent of the find, with the insatiable demands of modern society for oil its life-span will not be as great as that of coal. Many energy enthusiasts, faced with the possibility of a shortage of natural gas have argued that it can be made from oil. It can, but equally it can be made from coal. Indeed, a leading oil company is investing a considerable amount of money in Scotland in a joint experiment with the Gas Council on this. But will there be the abundance of oil available to do that, bearing in mind all the competing uses that oil has? In his 10th March statement the Minister said that latest estimates indicated that we might be able to get from the North Sea about 25 million tons of oil by 1975, which was about a quarter of our present use of oil. A very big "might" indicates that the figure of 25 million tons could reach 75 million, which is three-quarters of our present oil consumption, but who is to say what our consumption will be in, say, 10 years' time? Clearly, demand will then be very much greater.
Other important factors emerge. For example, North Sea oil is sure to be expensive, understandably so, for the finding and landing of it is a triumph for modern technology, and a very costly one. But we must accept that the days of cheap oil anywhere in the world ended with the rise of nationalism in the underprivileged peoples of the Middle East.
Two points to cause extreme concern on the factual position of oil must be 406 stressed. First, the world is using more oil than it is discovering—hence the importance of our find in the North Sea. Secondly, our oil is of a very light nature, so that we must import heavier crude oil to mix with it. Therefore, any talk of our being self-sufficient in oil at any time is a nonsense, unless a field of heavy crude oil should be discovered off our shores. As far as we can see ahead, we shall need to import oil and to pay the price. Equally, we must exploit any North Sea resources we have. We cannot afford not to.
The problem of modern industrial economies in respect of oil can be seen in the fact that in the United States of America oil accounts for 44 per cent. of energy consumption, natural gas 33 per cent. and coal 18 per cent. This has happened in spite of the fact that the United States has spent the past decade in a fruitless attempt to make the nation self-sufficient. Oil imports have been ever-increasing. The quota system which was introduced was meant to discipline imports, but it has been cut through in spite of the oil field find in Alaska. On present trends the United States economy will be faced with an extra burden of 15 million dollars a year for foreign oil. With this burden added to the already heavy burdens on the dollar, the dollar might well have to be further devalued.
A policy of conservation in the use of oil is clearly vital in the not-too-distant future, if not the immediate future. The need for a strong, virile coal industry is equally imperative. We just cannot do without coal. Surely that lesson was learnt earlier in the year during the miners' strike, even by the wildest men on the Tory benches, because they have had to concede that we do not have an alternative fuel supply. It will be necessary to maintain a strong coal industry producing a minimum of 120 million to 140 million tons yearly.
Two problems loom very large. The first is that with an ageing manpower in the pits we could be in dire trouble in keeping the pits going—all the more necessary to make the industry more attractive, to enlist the support of the recruits we require in the industry. Secondly, with exhausted pits being closed, if we are to maintain the production necessary for our future prosperity 407 new sinkings will have to be thought about, with all the decision-making problems on the raising of the necessary capital. This is going to be a headache for any Secretary of State.
It is no secret that the Cabinet has been sitting for some time on a report on the problems of an energy policy. In the report a strong case has been made out for the retention of a strong and, if possible, expanding coal industry. A decision becomes more important as the months proceed. The Government cannot sit on the report much longer.
Nevertheless, I concede that the Government's problems have not been made easier by the progress of the nuclear power industry, which was once heralded with loud trumpeting—certainly from hon. Members opposite—as the cure-all of our energy problems.
What is nuclear energy producing? It is producing only the equivalent of 10 million tons of coal a year. The then Tory Government, in their Suez adventure in 1956, pushed us into a prohibitively expensive nuclear gamble.
Now, after about £2,000 million has been expended, the Government must be seriously disappointed at the output of the nuclear power industry. The first generation of nuclear power stations, Magnox, cannot produce at full capacity because of technical problems. The second generation, the advanced gas cooled reactor, has been tragically bedevilled by technical troubles and ever-escalating costs of producing. These reactors are as much as four years behind target, and not one is yet in production.
That is the story of the great nuclear power industry which was going to be the cure-all of our ailments. We were told that we would not need pits. Not many years ago people were saying "We will not need miners". In many areas, such as my constituency, considerable pleasure was derived at the thought of miners being provided with alternative and pleasanter forms of employment, which would mean that men would not have to go down into the bowels of the earth to dig for the nation's energy. Alas, this was not to be.
However, I still believe that nuclear power is an essential ingredient of a 408 future power policy, although recent reports tend to suggest we need to ensure that radiation dangers are adequately catered for. I am sure that more will be mentioned in the House in the weeks and months to come about the danger of radiation in the production of nuclear power.
There are two other forms of energy. Solar energy has been touched on or lightly discussed for many years now. It may be that before the end of the century we shall see developments in that direction. Perhaps in a decade or so people will be talking in terms of solar energy as they talked two decades ago about nuclear energy. However, I suggest there will still be a need at that time for a healthy, strong coal industry.
The Secretary of State may have to give some thought to tidal energy. Thirty or forty years ago tidal energy might have sounded like some dream article in a boys' two penny weekly—which no doubt would now be a 6p weekly. In those days there were theories about nuclear, solar and tidal energy. It may be that in a decade or two decades ahead we shall have this much heralded and vaunted tidal energy being talked about. Again people may be saying "We will not need miners any more". Again, I suggest we shall still need a strong and healthy coal industry.
However, Mr. Speaker, I am sure that if I were to develop strongly the case for solar energy or tidal energy you would be constrained to call me to order, since the Amendment refers only to the Secretary of State—and I assume that means the present Secretary of State—so I will content myself with those observations.
§ Mr. Joseph Harper (Pontefract)
I am grateful to my hon. Friend the Member for Chesterfield (Mr. Varley) for this sensible Amendment, which would strengthen the Bill. We are discussing the Gas Bill, but the Minister, seeing the miners present on this side of the House, will realise that we are really here to talk about the coal industry, because we cannot get away from the fact that a national fuel policy or the national co-ordination of fuel supplies is as necessary now as it was 20 years ago—indeed, more so.
A national fuel policy should not be left to the chairmen of the nationalised industries concerned because otherwise 409 coal would get short thrift. This is a matter for Parliament, and Parliament alone. Whichever Government are in power, Tory or Labour, must use our natural resources to the best possible advantage to the nation, including North Sea oil and gas and our old faithful, coal. If we do not use all the fuels available to us through a wise national fuel policy, our grandchildren will curse us for the inept way in which we threw away their heritage.
We all welcome the great finds of natural gas on the Continental Shelf, described by my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Robert C. Brown) as a bonanza, and the vast investment which has made it possible. But that gas must be used in the context of a national fuel policy. We shall also have North Sea oil—doubly welcome because we shall thereby have to rely less on Middle East oil and will be less at the mercy of the whims of sheikhs or anyone else, and will also not have so heavy a drain on our balance of payments for oil imports.
My hon. Friend has said that the coal industry will play an ever-increasing and important part in a national fuel policy. Even at the present rate of extraction there is over 100 years left of coal supply in the country. That is not taking account of the recent find, mentioned by my right hon. Friend the Member for Mansfield (Mr. Concannon), in the Nottinghamshire area or of the great possibilities east of the present coal field in the Yorkshire area, particularly in the Selby district east of Kellingley, one of the most modern pits in Yorkshire.
The United States and the Soviet Union are increasing the potentials of their coal industries to a great extent, realising that oil and gas are not inexhaustible.
Another aspect to be emphasised is that there is no further need for coal imports. We are producing enough coal ourselves. The abolition of coal imports would give added confidence to the people working in the industry.
Another disturbing feature is that 3 million tons of coal were imported in the first three months of this year. Twelve million tons would be imported in one year, meaning the loss of 20,000 jobs 410 in our coal fields, thus increasing the unemployment spiral.
We shall have to rely more and more, as the fossil fuels run out, on nuclear energy. There are grave dangers in this. We have not mastered the pollution resulting from the production of nuclear energy. We are not able to dispose of the waste products. Our Magnox programme was much too large: too many millions of £s were spent for too little return. The gas-cooled reactors are not coming up to scratch as quickly as expected. Yet the fast breeder reactors are the power stations of the future.
Unemployment is highest in those regions of this country which rely on the coal industry. The pockets of unemployment total 12.8 per cent. in Hems worth and 11 per cent. in Thorne. Unemployment is higher in the coalfaces of Yorkshire and South Wales.
On Friday, 30th June, 1972, the Minister said:I emphasise that energy policy is under continuous review.Thank God for that!Energy prospects have to be kept in mind by the Secretary of State when coming to decisions in this context, not with reference only to the gas industry but generally."—[OIFICIAL REPORT, 30th June, 1972; Vol. 839, c. 1926.]We want the policy to be kept generally under review. We want the framework of the policy to be set out clearly within guidelines everybody can understand.
§ Mr. Robert C. Brown
Would my hon. Friend not agree that, unfortunately, this energy problem has been kept under constant review and has up until now had a catastrophic effect on the coal industry, because the words "energy policy is under constant review" have meant "How many more pits shall we close?
§ Mr. Harper
We have had experience of that. The time is coming when we shall not have to close any more pits or we shall be in dire trouble.
The Chairman of the National Coal Board, Mr. Derek Ezra, has given figures for the energy used in 1971 and projections for the next eight years. The total energy used in 1971 was 330 million tons of coal equivalent, comprised of hydro nuclear 12 million tons; North Sea gas 24 million tons; North Sea oil as yet 411 unexploited; coal 140 million tons; imported oil 154 million tons.
The figure of the National Coal Board projected for 1980 is 440 million tons. Possibly that is a slight understatement especially since we have got the economy moving at the rate of 5 per cent. a year, so one can add a little bit on to that figure.
The National Coal Board's estimate is that hydro nuclear will go from 12 million to 40 million tons, North Sea gas from 24 million to 70 million tons; North Sea oil, which is not there at present, will be 80 million tons; and the figure in respect of coal is unchanged. We are not asking that the coal industry should be expanded. We are asking the Government to make a declaration that the coal industry will not be run down any more and that the figure will remain at 140 million tons.
The nub of this set of figures is "imported oil" standing at 154 million tons. That should be whittled down with little ceremony to 100 million. That is a more realistic appraisal than any I have so far heard. The whole fetish that high wages in an industry leads to absenteeism and loss of productivity has been discarded since Wilberforce. Thank God for Wilberforce! In the coal industry high wages have led to less absenteeism and increased productivity. We want a high-wage low-cost economy. That will solve all our problems.
§ Mr. Michael Cocks (Bristol, South)
I do not entirely share the view of my hon. Friend the Member for Pontefract (Mr. Harper), who deplored the absence from the benches opposite of those who normally take part in fuel debates. I think it is a mercy that we are spared that procession of tired, worn-out party hacks trying to speak about the coal industry from a theoretical knowledge and looking extremely scanty against the powerful array of practical experience on this side. It is a pity that the remarks of my hon. Friend the Member for Bristol, Central (Mr. Palmer) about the thinness of the benches opposite last Friday have only been countered by the trotting out of the payroll vote. We have had a 100 per cent. improvement on the attendance of Friday but only by 412 producing those already in Government service.
Although I was not on the Committee of this Bill I have become extremely interested in it and I am anxious to help the Minister. In Committee in the Industry Bill we have an understanding with the Government—because we are interested in trying to expedite the Bill—that the Minister if he can helpfully intervene at an early stage does so and thus truncates the debate. I am sure my hon. Friends would not oppose the Minister doing the same if he were able to accept our Amendment.
§ Mr. Ronald Brown (Shoreditch and Finsbury)
Would my hon. Friend agree that that does not absolve the Minister, having read from his brief and then listened to the valuable debate, from coming to the conclusion that his brief was not a good one?
§ Mr. Cocks
I take my hon. Friend's point. The Minister will be a better Minister for the few remarks I am about to make. I am a little alarmed at some of the assumptions which have been made in the debate because I think we are suffering from thinking in terms of our own life span. Because we only live on this earth, if we are lucky, for 60 or 70 years we regard periods of 25 to 30 years as being so far in the distance that we do not need to think beyond them.
The greatness of this country has been built up on the use of fossil fuels, which have been very slow in formation. Hon. Members know that the coal measures were formed during the carboniferous period, a process extending for tens of millions of years, with the slow decay of vegetation falling into swamps, a process paralleled today only at the mouth of the Amazon and similar large rivers flowing into the sea. We are using up extremely quickly things which have taken in some cases 50 to 100 million years to form.
The Continental Shelf is very limited in area. It is important to remember this. We must also remember, if we are thinking of finding fresh resources spreading out from the land masses, that the 413 deep oceans are of a different structure and are not composed of the sedimentary rocks which are to be found on the Continental Shelf. Even on the 100 fathom mark there is a definite limit to the extent of resources which can be discovered.
My hon. Friend the Member for Swindon (Mr. David Stoddart) mentioned the growing expectations of the rest of the world. There is already an appreciation that it is better to use up indigenous fuels in the country of origin and to get the full benefit from them, because they are worth much more when they have been processed—they result in a number of by-products—than export them crude and get the income from them. This is seen not only in newly developing countries, but also in microcosm in the United States where there is a growing feeling around the Gulf of Mexico in States such as Texas that it is better to develop their own petro-chemical industries and associated by-products than to continue to export fuel to the north-east of the United States and then be denuded in the coming years.
The hon. Member for Bedford (Mr. Skeet), projecting into the future, said that there will be plenty of coal. That interesting remark showed the way in which the Tory Party takes the mining industry for granted. The attitude is, "Never mind if oil and natural gas become scarce. There is always coal. Never mind how we treat the miners in the meantime and kick them in the face over their legitimate claims. We can always turn to them in our hour of need." This attitude will come home to roost.
The Amendment is so unexceptionable that I find no difficulty about it. The whole trouble about the Tory Party and its approach to a national fuel policy is the persistent campaign which the Tory Party has conducted against the whole concept of nationalisation for its own petty, spiteful party ends. It now finds it very difficult to embrace the necessity to plan our fuel and energy resources and to make projections.
On Friday my hon. Friend the Member for Bristol, Central and others spoke of the clear-cut philosophical difference between the two sides on the question of fuel policy. This is, in a way, a good thing, because I believe that the more that hon. Members opposite, and in particular the Minister, think about the 414 whole question of fuel policy and the need to plan, the more they will realise how inexorably natural events and resources available are pushing us towards a socialist solution.
It is with pleasure that I support the Amendment and urge it on the Minister. I am sure that my hon. Friends on the Front Bench will agree that, should the Minister wish to intervene at an earlier stage on future Amendments, he will be very welcome and it will expedite our proceedings.
§ 12.15 a.m.
§ Mr. John Golding (Newcastle-under-Lyme)
I hope that the discovery of natural gas in the North Sea does not lead the Government to a policy of shutting down the pits too quickly. Many of my mining constituents believe that the greatest mistake of the Labour Government was to shut too many pits too quickly. We are debating fuel policy to night against the growing problem of unemployment and insecurity in coal mining and in industry generally. In my constituency there are three pits, one of which in the village of Silverdale is breaking world production records. We shall get increasing coal production only if the miners can look to the future with some degree of security
Perhaps we should not trust the Government too far in formulating a fuel policy. Following the great success of the miners' strike the lesson learnt at Saltley Gas Works, the Government are under great pressure to act vindictively against the miners. We have read recently that we should rely less on coal because of the success of the miners' strike. Yet it would be hard to find any members of the community who have been so loyal as the miners. Those of us who are trade union officials in other industries wonder why the miners did not exploit their strength in the immediate post-war period to get the highest wage levels, and why they did not use their collective strength to exploit the introduction of mechanisation in the pits. From outside one can only wonder at the loyalty and dedication of the miners to the country in putting up with the pre-Wilberforce pay and conditions.
I disagree with my hon. Friend the Member for Pontefract (Mr. Harper) on one point. I do not think Wilberforce went far enough. I still regard the miners 415 as one of the worst paid sections of the community. We must follow a fuel policy which provides steady employment for the miners at the highest possible pay. That means using indigenous fuels.
Members of the Conservative Party during and after the miners' strike raised the issue of loyalty. Whom do the people of the country trust? Do they trust the sheikhs who control the oil in the Middle Eastern countries or the coal miners of this country? There can be no doubt of the answer. The loyalty of the miners cannot be in doubt. The sheikhs owe us nothing, and there are many reasons for distrusting them. We should avoid any over-dependence on oil not only because we cannot rely upon the sheikhs politically but also because we know that the reserves of oil are restricted in any event. Despite the vast new resources of Alaska, America is being driven to import oil which, of necessity, will increase prices considerably.
§ Mr. Ronald Brown
Does not my hon. Friend agree that this country has used oil as a source of tax revenue and, therefore, that the cost to us is much greater than that paid to the sheikhs?
§ Mr. Golding
That is true. It can be argued that, especially in those countries where the oil is State-owned, one has to take into account not only the tax revenue but the vast profits of the international oil companies when making any comparison. But, given that the fuel is controlled in so many countries by small ruling cliques, I prefer to trust Britain's miners to provide our fuel rather than the sheikhs of Middle Eastern countries. When the crunch comes, Britain's miners as a whole will remain as loyal as they have always been.
I share the opinions of my hon. Friend the Member for Pontefract about what he describes as "fast breeders". I believe that fast breeding can lead to accelerating costs, as many economists have pointed out. Perhaps not entirely unrelated is the question of pollution, which has not been solved entirely.
The Amendment refers to co-ordination. There is an argument not only for national co-ordination on a large scale but for co-ordination on a more personal, domestic scale. In the last 416 week, I have received a letter which considers with care the use of natural gas. The writer was impressed by my argument about the hazards that natural gas presents in that it leaks from pipes. It has been shown to me that it might be most useful for natural gas to be fed into electricity generating stations and for electricity to be produced from it, rather than for natural gas to be used domestically.
Questions should be asked about the provision of heating facilities on new housing estates. When I was looking for a house in my constituency, I was disturbed by the difficulty which I encountered when it came to the fuel of my choice. The gas authority seemed to have a very cosy relationship with the builders. I found it easy to get gas warm-air central heating, but very difficult to get electric central heating. I wanted the latter because that would have been produced from the coal mined in my own and neighbouring constituencies. There may be an argument for taking a closer look at this problem of heating housing estates.
What is more, when we talk of national fuel policies, it is time that the Government took district heating seriously, whether it be from coal, from electricity or even from North Sea gas. It seems to me that we are using our fuels very wastefully at present; that, given that we are building our housing in estates, building them together connected by many common services, it is an absurdity that we have no overall policy for heating those estates and that there is a hotch-potch arrangement which, when looked at carefully, is uneconomic. I shall not pursue this point, of fuel policy, because later I want to speak at greater length on the question of safety.
From many in the coal mining, electricity generating, and gas industries, there is a growing demand that there should be a fuel policy resting upon the use of indigenous fuels which will provide security not only for the men of the coal industry but for the men of other industries.
§ Mr. Skinner
I did not intend to speak in this debate. I thought it was about the Gas Bill. I wandered into the place, and it became obvious after a relatively 417 short time that I had better look at the Amendment to see what this caper was about, and it was soon obvious that we were dealing with the most important matter of all, the coal mining industry and the development of a national fuel policy. We have heard all that before, have we not? I used to hear it a lot in the coalfields before I became a Member of Parliament.
I shall take up a point made earlier and then other points made by my hon. Friends and by hon. Members opposite who have left. First, I would comment on a point made about Wilberforce.
There is no truth in the report that Wilberforce is now an honorary member of the NUM, but my hon. Friend the Member for Pontefract (Mr. Harper) seemed to give the impression that Wilberforce was chiefly responsible for the wage increases which miners got at the beginning of the year. We must dispute that, and I hope my hon. Friend will accept that the people who got the rise were the fellows on the picket lines, and to some extent the wives and families back home who were ensuring the great solidarity in the communities. Wilberforce was merely the agent of the Government who, at a given point in time, had to acknowledge that the miners were in such a powerful position and that the country recognised it needed coal and probably also recognised the need for a fuel policy not dissimilar from this Amendment. It was then that Lord Wilberforce was found, with two colleagues, and he had to provide or recommend a sum of money. He was the mathematician in the scenario; he was the fellow who on that Friday had to come up with a sum of money which might be suitable for the miners to accept. After they had been to Downing Street, possibly to argue about a fuel policy as well, our friend, the Minister's right hon. Friend, had to find another £8 million. He has never recovered from it. He never will. It will naturally result in him losing his job whenever the General Election takes place. It was the most signal event in the whole period of this Government. It meant that various other people were able to tackle the Government and the Prime Minister, not in the same way as the miners, but in the full knowledge that he could be brought down.
418 12.30 a.m.
So Wilberforce played his part, but no more a part than that he happened to be found at a particular moment to act as the Government's agent in recommending a sum of money which would get the miners back to work. It may be that in a properly co-ordinated fuel policy there would need to be several more Wilberforces to recommend various other sums of money to see that the coal industry thrived continually.
§ Mr. Golding
My hon. Friend suggests that there might need to be several more Wilberforces. Should he not be saying that there ought to be no need for any more Wilberforces? At his union's annual conference yesterday the point was made by the miners that they are not satisfied with present wage levels, and it should be a matter of simple negotiation with the National Coal Board, with no Government or Wilberforce intervention, so that all miners receive a proper and appropriate rate of pay.
§ Mr. Skinner
My hon. Friend is an idealist. I accept that he feels that way. His emotions carry him to these conclusions. But I tend to keep my feet a little closer to the ground. Notwithstanding that some of us may be on the Government benches on a future occasion, I am realistic enough to know that there may be an impasse and it will be necessary to find some studious gentleman who can recommend a sum to get a Government, of whatever political persuasion, out of a difficulty.
I agree that certain decisions which will take place at Morecambe this week are of tremendous importance to the miners. Of course they are. They took an important decision today—I do not know whether my hon. Friend is fully aware of it—which would be important in the formulation of a co-ordinated fuel policy, as suggested in the Amendment. I need to keep mentioning that to stay in order.
This morning there was a co-ordinated, composite wage claim which suggested that about £40 a week for coal face workers and £30 a week for surface workers would be the only solution in the present situation to provide the miners with a reasonable wage.
§ Mr. Golding
For the record, I should point out to my hon. Friend that when I talked about the events of yesterday, 419 it being half-past midnight, I was talking about the events to which he is referring in terms of today.
§ Mr. Skinner
Yes. I understand the position now. It certainly was yesterday. Today, for instance, they will be talking about something completely different which will have an important effect on a national fuel policy as it affects the miners. They will be talking about entitlements for shift payments for social hours working. That is very important. The suggestion is 25 per cent. for working an afternoon shift, 33 per cent. for working a night shift, and various matters of that kind.
Today they will no doubt be discussing a better pension for retired miners instead of the miserable 30s. they now receive. You appear to be getting restless, Mr. Deputy Speaker. The point I am trying to establish is that, without a proper wage system inside the coal industry, the co-ordinated fuel policy recommended in the Amendment would carry very little weight indeed. I want the Amendment not only to be accepted by the Government, but to be realistic when it has been accepted. That is important. We need this properly organised wage structure not merely for the miners who are in the industry now but for those who will in due course retire.
That is where I came to the point about the pension. We are talking about giving security to those 57-and 58-year-old miners now in the industry who are anxious to know what kind of pensions they will receive, and therefore at More-cambe this week they are discussing that and other matters. They have listened, too, to my right hon. Friend the Leader of the Opposition who had some worthwhile things to say about the coal industry. He probably said some other things with which I do not wholly agree, but that does not matter too much. Certainly the upgrading of pensions from the present miserable level of £1.50 is important.
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
Order. I am sorry to intervene, but I must ask the hon. Member to try to keep to the issue of the co-ordination of fuel supplies.
§ Mr. Skinner
I think that it would be taking things to a ridiculous length to quote example after example of the 420 things that are necessary to improve the attitude of the miners. I have given three examples—extra payment for social hours, extra pensions and thus extra security and extra wages. Perhaps those matters make the point.
Too much emphasis should not be placed on what was said on the first day of the miners' conference by the president of the union. In my view what he said was wrongly interpreted. He is reported as having told the miners to "cool it". It is important to get it on the record that yesterday the general secretary said something quite different. He told the conference that moderation in the pursuit of wage claims does not solve the problem of providing justice for the miners.
I hope it is fully understood that in the lifetime of this Parliament we have not had a proper opportunity to debate a properly co-ordinated fuel policy and therefore, even though the hour is late, it is as well for my views and those of my hon. Friends to be put on record. It is not my fault that we are discussing the Gas Bill and an Amendment calling for a co-ordinated fuel policy. I assume that the Chair had something to do with the selection of the Amendment. That being so, it is necessary to say a few things about it.
I see that the hon. Member for Derbyshire, South-East (Mr. Rost) is present in his new capacity as PPS to the new Minister for Industry. I know that the hon. Gentleman has a few miners in his constituency. Bearing in mind the many things that he has said about the miners, I hope that he will speak in support of the Amendment, or perhaps whisper in his hon. Friend's ear that it would be a good thing if he were to accept it. If the hon. Gentleman were to do that, I should immediately sit down.
I came into the Chamber thinking that we were to debate the Gas Bill, but the Chair deemed it advisable to select an Amendment calling for a co-ordinated fuel policy, and it was suggested that it was necessary for us to say a few things about the need for such a policy.
My hon. Friend the Member for Mansfield (Mr. Concannon), in a powerful speech, talked about the reserves of coal. I do net want to repeat the old arguments. He made the case very well indeed. 421 But it is necessary to reiterate briefly the fact that we have these large-scale reserves. They are mainly in the Nottinghamshire coalfield. I am told that there are also some underneath Oxford which a future Labour Government might exploit—although I am not sure that that would gain many floating votes. Nevertheless, in the Nottinghamshire coalfield there are vast untapped reserves. Anyone in his right mind would accept that if there is 30 years' working of coal—that is the kind of figure being quoted—we ought to be more concerned with a properly co-ordinated fuel policy.
I am told by some of my hon. Friends who are very well informed about North Sea gas that possibly we have only 20 to 25 years supply of North Sea gas at the present rate of exploitation. Therefore, I agree fully with my hon. Friend the Member for Mansfield, who knows the Nottinghamshire coalfield like the back of his hand, and with my hon. Friend the Member for Chesterfield (Mr. Varley). In view of these massive reserves, it is extremely important to see that we do not run down the coal industry any more than we are doing at present.
The hon. Member for Bedford (Mr. Skeet), who has left the Chamber, referred to the 1967 White Paper. Although perhaps my hon. Friend the Member for Chesterfield may have dealt with this matter, it should be pointed out that that White Paper did not get around a great deal in the House. It was suggested that it was an important document. For a while it seemed as though it would be the backbone of a new policy. But because of the close attention paid to it by some of my hon. Friends, Dick Marsh had to do something with it. As far as I am aware, it remains in the pigeon hole into which Dick Marsh put it in 1967.
My hon. Friend the Member for New-castle-under-Lyme (Mr. Golding) referred to the question of the nationalised industries. During the 20 years or more since nationalisation, when the miners have been arguing for the kind of national fuel policy being put forward tonight, the miners were having the national interest rammed down their throats. They were told "Look after the national interest, and do not rock the boat." The right hon. Gentleman the Prime Minister is not so much concerned about the national interest. He talks about it a 422 great deal, but he is not concerned about it when he is trotting off to see Pompidou and taking notice of him. When Pompidou says, as he did yesterday, that if we continue to float the £ we can keep out of the Common Market——
§ Mr. Skinner
I was getting at the floating £, Mr. Deputy Speaker, which is very important to a co-ordinated fuel policy. With a co-ordinated fuel policy, my hon. Friends and I would take every possible opportunity to see that the amount of coal that was imported, whether from EEC countries or elsewhere, was as low as possible. It could not be stopped inside the EEC, although when the Opposition become the Government all that will be ended because we shall renegotiate the whole matter. The French will not like that. They will say that we must be out.
If the £ continues to fall or rise in value according to the way it is treated by speculators in Britain and abroad, that will affect the price of the coal we import. At present the average cost is about £12 per ton and imports are running at an average rate of 12 million tons a year. We are paying about £150 million for imported coal. That is where the floating £ is important in the total arithmetic, because it will affect the balance of payments.
It is necessary to explain the kind of things which would arise if we had a co-ordinated fuel policy, which will mean as low an intake of coal imports as can be justified while we are in the EEC, and when we are outside the EEC, as we shall be when the Labour Party is in government—I do not think I am being too idealistic—it will be back to nothing, as it was for many years after 1959 when the coal stocks were about 40 million tons.
§ 12.45 a.m.
§ My hon. Friend the Member for New-castle-upon-Tyne, West (Mr. Robert C. Brown) mentioned the nuclear programme and touched on the question of pollution. The other week I read a book produced by a Government working party called "Nuisance or Nemesis". It is not my usual type of bedside reading, but I got round to looking at it. Since 423 it was the responsibility of the do-gooding Secretary of State for the Environment, who trots round the world espousing all the good Liberal causes—we can see what he is after—while leaving the despicable matters to the Minister for Housing——
§ Mr. Skinner
The right hon. Gentle man has been very clever and crafty in the way that he has gone about his busi ness, and his visit to Stockholm——
§ Mr. Deputy Speaker
Order. I do not think the hon. Gentleman had better go into that matter. He had better keep very closely to the Amendment and not try my patience too much.
§ Mr. Skinner
That is the last thing I would want to do, Sir Robert, because my patience reaches a low ebb sometimes, too.
In the book "Nuisance or Nemesis", which was compiled by a Government working party consisting of responsible people—I cannot remember all the names, but the members included the Master of Clare College, Cambridge, and two or three other odd bods—it was said——
§ Mr. Deputy Speaker
Order. Before the hon. Gentleman quotes the book, will he assure me that it is concerned with the co-ordination of fuel, because, if it is not, it is out of order?
§ Mr. Skinner
I shall be very careful to ensure that even if it takes a long time I shall get round to the point, which will be extremely relevant——
§ Mr. Deputy Speaker
Order. It must not take all that long, otherwise I shall have to ask the hon. Gentleman to resume his seat.
§ Mr. Skinner
I appreciate that, Sir Robert: The books "Nuisance or Nemesis", which was sent to Stockholm for the people involved with pollution matters to discuss, stated:The price of electricity: radiation"—424 that was the sub-title of this passage in the book—This rapid and drastic increase in the number of nuclear reactors is bound to lead to an increase in the global level of radio activity unless additional precautions are taken. These precautions will be expensive, will put up the price of electricity and are therefore likely to be resisted.The whole of the paragraph laid stress on the fact that there were hidden dangers in storing nuclear waste, and the professors on the working party and other people of informed opinion have not been able to discover ways of getting rid of the nuclear waste. That is an additional reason why it is necessary to have a co-ordinated fuel policy as described in the Amendment. It was not until I read that book that I realised how relevant were some of the arguments I had heard before. I had paid only scant attention in the past to the nuclear energy argument, but it became clear in that book what an important matter that was.
The Industry Bill is at present in Committee. It is the Government's answer to the lame duck philosophy. I am informed that unless CBI pressures are so great that Clause 8 of that Bill is drastically changed about £550 million will be allocated to private industry willy-nilly. We have reason to believe that Mr. Campbell Adamson of the CBI is not very happy about that state of affairs. He wants Clause 8 abolished, and I can understand his reasons. There are many of them. But if £550 million can be paid out to private industry by the Minister for Industry, with a nod and a wink here and a £25 million handout there, surely it is important to have a co-ordinated fuel policy where nationalised industries can have the same opportunity to use some of that money.
In 1968 the TUC Economic Review spelt it out in more detail. My hon. Friend the Member for Chesterfield knows the argument well. I do not want to go into it tonight. It is getting late and I might upset your patience, Sir Robert. But it would not be enough for a co-ordinated fuel policy to allocate 20 million tons of coal equivalent for one sector of the energy market, 50 million tons of coal equivalent to another and 50 million tons for the coal industry. A properly co-ordinated fuel policy would 425 have to contain built-in advantages for the nationalised industries.
My hon. Friend the Member for Swindon (Mr. David Stoddart) expects the nationalisation of the oil industry to take place early on in the lifetime of the next Labour Government. But we would not be in the position to take it over immediately. There are other problems. We must get rid of the Industrial Relations Act and the Housing Finance Act. You name them, Sir Robert, and we must get rid of them. It could be a while at least before we got round to nationalising the oil industry. Not all my hon. and right hon. Friends would agree with my strategy for nationalisation. I would suggest a one-clause Bill with First Reading, Second Reading, Committee stage and the rest all done in 24 hours with the Bill sent to the House of Lords and quickly brought back, as we did with the Bill dealing with Rolls-Royce. That I would agree with totally, as would some of my hon. Friends. But it might not happen, because our Labour Government might look at the matter a little differently. They might want to adopt a more moral posture, giving everybody a chance to criticise and put his point of view. I hope they do not. I hope they go straight in.
I do not want to disappoint my hon. Friend the Member for Swindon, but we may have difficulties in this co-ordinated fuel policy over the first three months. We should have to have some sort of palliative in order to see that the oil industry did not take too strong a hold within a co-ordinated national fuel policy.
My hon. Friend the Member for Chesterfield, my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) and I met last Monday one of the Ministers of the Department of Trade and Industry and the Minister for Local Government and Development, who was the chairman of the meeting but said very little. We met them at the Department of the Environment, in Marsham Street, in a very plush office, to discuss the question of intermediate status for parts of my constituency, the major part of the constituency of my hon. Friend the Member for Derbyshire, North-East and all of the constituency of my hon. Friend the Member for Chesterfield. We 426 have been arguing the matter for two or three years.
§ Mr. Deputy Speaker
Order. The hon. Gentleman has spoken for too long about intermediate status. He must get back to co-ordination at once.
§ Mr. Deputy Speaker
I will not have it developed. I want to get back straight away to co-ordination.
§ Mr. Skinner
It is extremely difficult. If I can give you a general impression, Sir Robert, of why we were there and then develop the argument I think you will fully understand. We wanted intermediate status for a mining area. Everyone will accept that most of the problems in the regional and development areas are consistent with mining areas, consistent with the fact that successive Governments have been responsible for the closure of pits. The point is well taken. The Hunt Committee, set up to look at the problem when the Labour Government were in power in the middle 1960s, dwelt in the main on the mining areas, to establish some sort of intermediate range of regional development status for areas then not development areas.
§ Mr. Deputy Speaker
The hon. Gentleman is too long in getting back to co-ordination. He must not stretch my patience unduly. I am quite serious. Unless the hon. Gentleman tries to play the game by me, I shall have to ask him to resume his seat.
§ Mr. Skinner
It will not be the first time, Sir Robert.
The point I wanted to make was that we were at the meeting because pits had been closing. That is why we have been there on several occasions, arguing the toss as to whether we could get intermediate status for North Derbyshire, including Chesterfield and the surrounding district, because pits had been closed under a co-ordinated fuel policy. We hope that will not occur in the future, and that we shall not be trotting along to try to get some industry into that area to offset the loss of jobs as a result of the pit closures.
The point I am trying to establish is essential to the discussion. It must not be a question of solving the problem 427 after it has happened. I am suggesting that with a properly co-ordinated fuel policy there would be no argument about going to the Department of the Environment or the Department of Trade and Industry to try to get other jobs after the pits had been shut.
When a pit has been shut, there are 700 men unemployed who were once in a hole in the ground. There needs to be a great deal of acreage of industrial development to employ those 700 men—certainly a lot more than a hole in the ground and a few working places at the pit top. With a properly co-ordinated fuel policy there would be no need to argue the point. It was made clear by the representatives, including the Duke of Rutland, that they were concerned about future pit closures.
Some of my hon. Friends were giving the impression that now we are in a different situation in the coal industry, but the situation is not much different from what it was two or three years ago. Last year we were told, and again at the beginning of this year when the strike took place, that there were 32 million tons of coal on the ground in stocks. That assertion was proved to be false. But next winter, unless some alteration is made and there is a properly co-ordinated fuel policy, there will be 32 million tons of coal on the ground. That is exactly what the Government are about. They are importing coal which they do not need at the rate of 12 million tons a year, at twice the cost of British coal. This is a deliberate plan to build up the stocks so that they will be in a more powerful position and the miners will be in a less powerful position when the next round of wage talks take place. That is why a fuel policy is important.
Even if we have a fuel policy, there will have to be continued growth in the economy. A co-ordinated fuel policy would not continue for long unless there was growth. One of the main reasons for pit closures is the stop in the economy. With the recession, there have been pit closures. If a few thousand car workers, for example, are thrown out of work, within six months, if there are different tax arrangements, the boom can commence and some of those workers, or perhaps all of them, can start work again in the same factories. But when there is a recession in the coal industry, pits 428 must close to take account of the slack, and they never reopen.
Therefore, there must be a co-ordinated fuel policy allied to continued growth in the economy. I hope that hon. Members opposite will take note of the arguments, notwithstanding the fact that they relate to an Amendment to the Gas Bill. It is important that they should do so if we are going to look after the nationalised industries, of which I believe the coal industry is the most important. We must have a co-ordinated fuel policy.
§ Several hon. Members rose——
§ Mr. Ronald Brown
On a point of order, Mr. Deputy Speaker. I have been waiting patiently to make my contribution to the discussion, which is now being truncated. The Government Chief Whip is putting a guillotine on everything. It is outrageous that, this Bill having been put on tonight, those of us prepared to stay for it should be frustrated. The Government Chief Whip is behaving like a little Fascist.
§ Mr. Deputy Speaker
The hon. Gentleman knows the situation as far as I am concerned. If a Front Bench Member gets up to speak, it is the custom of the Chair to call him.
§ Mr. W. E. Garrett (Wallsend)
Further to that point of order, Mr. Deputy Speaker. I was a member of the Standing Committee which considered the Bill and I have sat here for many hours——
§ Mr. Deputy Speaker
Order. There is nothing further that can be said to the point of order. I am anxious not to waste the time of the House. The hon. Member for Bristol, Central (Mr. Palmer) has risen to speak and I have no option, under the custom of the House, but to call him.
§ Mr. Ronald Brown
Further to that point of order, Mr. Deputy Speaker. My hon. Friend the Member for Bristol, Central (Mr. Palmer) may have risen, but, clearly, he could not have seen me rising to my feet at the same time. I have been rising to speak a number of times. If my hon. Friend feels that he did not observe me rising, perhaps he is now giving way to me.
§ Mr. Arthur Palmer (Bristol, Central)
My intervention at this stage does not close the debate. We are on Report.
My hon. Friends have covered the question of a co-ordinated fuel policy very thoroughly. It is a great pity that we have not had more contributions from hon. Members opposite in view of the importance of the subject. The Under-secretary of State on Friday said that this debate could be the coat hanger on which a general discussion of fuel policy could hang.
Although there has been a general debate on fuel policy, the Amendment stands in its own right in a Bill which deals only with one fuel industry, but there is indeed an argument for saying that a similar provision should be included in every Bill dealing with fuel industries. The case for it is three-fold. First, it would be a safeguard against wasteful capital expenditure in the gas industry; secondly, it would emphasise the general need for the conservation of fuel resources; thirdly, it Would strengthen the Minister's hand in his general obligation under the 1944 Act to co-ordinate fuel and energy supplies.
The principal argument is that the massive development of natural gas is part of the new organisation of the gas industry. Perhaps under the new Gas Corporation the industry will develop an ever-increasing appetite for capital. Up to 1965 there was an average capital expenditure by the gas industry of £60 million per year. It is now running at £300 million per year. There is no guarantee that there will be any return on that expenditure. The new expenditure of the gas industry is being met by huge increases in borrowings. As a result the self-financing ratio of the gas industry has fallen, in a few years, from 41 per cent. self-financing three or four years ago to 25 per cent. last year.
It is worth comparing that poor return with the figures being achieved still in 430 the nationalised electricity supply industry. It would be much nearer 50 per cent. than the low figure being maintained now by the gas industry.
Looking to new borrowing, the future costs of the gas industry will be tremendous. The industry is now paying 9½ per cent. to the Treasury. On foreign borrowings the figure is running at between 8 and 8½ per cent. There will be a great deal of old stock coming up for redemption very soon, on which the outstanding capital debt has now risen to about 6¼ per cent.
If the gas industry is going to be financially solvent under the new circumstances a very much higher level of profitability will have to be achieved.
It is reasonable that we should not spend money on such an enormous scale in the gas industry whilst finding ourselves with under-used assets in the other fuel industries, including the coal industry. That might come about because no proper balance has been struck between capital claims of the various fuel industries. There is no proper co-ordination. It would be useful to set a proper and realistic overall target of return for the gas industry for the future. It should be at least 7 per cent. If that were achieved there would be some check on wasteful capital expenditure. It is important that all primary energy sources should advance together. I do not take the view that the nuclear power industry is one that is not of great advantage to the country. It is of great advantage. It is a great employer of labour.
The time will come when the fossil fuels of the country and the world are exhausted. No one can say exactly when this will happen but, working on a normal compound calculation of 7 per cent. to 8 per cent. per annum, it is likely that fossil fuel resources of all kinds will be exhausted by perhaps the turn of the century. Under those circumstances, unless the industrial civilisation we know, with all its faults and some of its merits, is to collapse we will obviously have to look for some other primary source of energy.
As far as can be seen nuclear fission, or perhaps by that time nuclear fusion, will be the only available source on any large scale. I have never argued that the 431 development of nuclear energy should take place at the expense of the coal industry. That does not mean that there is not still in this country, as in other advanced industrial countries where coal is available, a future for the industry. If we are to resume the industrial prosperity that can come about only when we have a change of Government, there will be a massive demand for energy all round and every primary source can be used.
I am glad in this connection to have the approval of no less an authority, and in some respects it is a surprising one, than Sir David Barran, Chairman of Shell Transport and Trading Co., when he was speaking in April to the West Yorkshire region of the Economic League. I do not know whether that league is to the left or right of the Monday Club but it is certainly very anti-Socialist. Apparently the gentlemen of this branch brought along Sir David Barran because they thought he would absolutely condemn the coal industry as a source of energy, following the experience of the miners' strike. The gentleman responsible for sending out the notice convening the meeting used these words, and they will be of interest to my hon. Friend the Member for Bolsover (Mr. Skinner):The disastrous results of the recent miners' strike, placing as it did a virtual stranglehold upon the nation's source of power, brought industry virtually to a halt. The country cannot afford to be placed in a similar situation again …The members of the league must have been very disappointed at the way their guest repaid them.
What Sir David Barran says is of the greatest interest and comfort to the coal industry and my hon. Friends. I content myself with one quotation. He said:In the light of these figures"—he had given figures which we must accept. We cannot argue about figures; we can argue about the interpretation to be placed upon them. He went on to say:my priorities if I were framing a national fuel policy would be these: wherever coal can be economically produced it should be. Every effort should be made to help nuclear energy to become more efficient and more economical, thus hastening the day when it can take over a larger share of the energy burden—although I do not think this can happen until well into the 1980s.432 My view is that the date would be much further into the future than that. He went on to argue that we must reduce wastage in fuel consumption and recognise fuel as a scarce resource to be used more efficiently.
Sir David made this powerful point:The maximum effort should be made to ensure the optimum development of all indigenous resources—oil and natural gas around our shores, coal and nuclear energy—while recognising that as far as oil is concerned we cannot avoid substantial dependence on imported supplies for many years".Obviously Sir David is not happy, any more than the rest of us are happy, about overdue dependence on imported supplies.
After inviting this guest to their gathering, these reactionaries of the Economic League must have been very disappointed. Sir David is an eloquent witness to the strength of our argument.
I turn to question of conservation of resources. The argument I have used so far has been about the financial viability of the gas industry, which must be considered in relation to the financial viability of the other fuel industries. There is an equal need for a fiscal economy in the use of fossil resources, because once Nature's store cupboard has been depleted—there is a point of depletion in the long run—there is no way of filling it easily again.
For the gas industry, which in future will be marketing almost entirely natural gas, the rate of exploitation is obviously of the greatest importance. It will be necessary to strike a balance between bringing in natural gas too fast, which can upset the proper balance of the associated fuel industries, and bringing it in too slowly, resulting in an insufficient return on capital invested. The question of conservation is much in support of the Amendment.
My third argument for the Amendment is that it would strengthen the Minister's hand, because since 1944, starting with the first Ministry of Fuel and Power, continuing into the Ministry of Power and now into the Department of Trade and Industry, the responsible Minister has had a general duty of co-ordinating all the fuel and power industries. I think that the Minister's general duty of co-ordination goes beyond the nationalised industries as such and 433 reaches into the privately-owned industries, including the oil industry.
When I made inquiries at the Ministry recently, I was told that, surprising as it may seem, there is no overall census or record of Britain's total energy resources. I had great difficulty in obtaining the figure for the amount of electric power which is generated privately, even though the industry has been nationalised for 25 years. I believe the figure to be about 20 per cent. There is no overall census of energy resources available, and it is important that that should be obtained.
My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) dealt eloquently with the total heat and energy concept. There is no consultation under the supervision of the Ministry about the organisation of energy supplies in relation to a particular geographical area. There is no understanding of how to obtain a proper mix of fuel resources.
Although it is hard for me as an electric power supply man to admit this, I suggest that, for instance, when a new town or a new estate is being developed, instead of bringing in electricity through an extra high voltage line, with the transmission losses that go with it, it might pay, if we had proper planning of fuel resources, to bring in natural gas by pipeline—there have been systems for bringing in coal in pulverised form by pipeline—and generate the electrical energy at the other end for power and lighting, the heat from the gas line being used directly.
The Amendment has made it possible for us to have a discussion at great length and breadth on the national fuel policy. Those of us who have worked so hard on the Bill argue that the Amendment stands up in its own right.
I will quote a few sentences from the 1967 White Paper "Fuel Policy". Like my hon. Friend the Member for Bolsover I have had many doubts about that White Paper. A great deal of effort went into drawing it up, but unfortunately it has proved to be woefully inaccurate in its predictions——
§ Mr. Palmer
It would be a novel departure if objection were taken to my 434 making selected quotations. It is normal practice and the hon. Gentleman is sometimes rather good at it himself. I quote from paragraph 136 in Chapter 9 headed "Conclusion":The concentration in the White Paper on primary energy reflects its dominating importance for fuel policy as a result of recent developments. The magnitude of these developments highlights the need to think of fuel policy as an evolving subject, requiring constant review and susceptible to continuous adjustment. This need arises not only from change within the energy sector itself but also from the impact of broader economic and social circumstances, themselves liable to change. In their continuing review of fuel policy the Government's aim will be to make possible the supply of energy at the lowest total cost to the community having regard to the whole range of relevant considerations —economic and social—and to national and regional economic policies.The Amendment asks that that sound sentiment should be written into the legislation.
I emphasise again what I said in the first place. When at any stage this House considers fuel and power legislation, be it for the gas industry, the electricity supply industry or the oil industry, the legislation should stipulate that those responsible for the administration of the industry concerned should not act on their own as if they lived in an isolated world but should relate what they do in their industry to what everyone else is doing in every other fuel industry.
Therefore I suggest that there is a strong case for the Amendment, which has been put forward in a constructive spirit. I hope that the Government will accept it.
§ 1.30 a.m.
§ Mr. Emery
I am sure that all hon. Members will agree that we have had a reasonable span of debate on this Amendment, and I accept immediately that a number of points have been put forward by hon. Members with specific constituency interests concerned with coal. All have argued very reasonably and sensibly the considerable rôle that the coal industry has to play in a coordinated fuel policy. This should be taken into account when we are dealing with any of the fuel industries.
I came to this debate fresh from six hours of debate on the European Communities Bill. I began to feel that we were still discussing the EEC when the 435 hon. Member for Mansfield (Mr. Con-cannon) said that we could not have settled the recent strike in the way we did if we had been in the EEC. I cannot see any ground for that argument. But I repeat that we accept the vital rôle of coal in a co-ordinated fuel policy.
I want to deal specifically with two points raised by the hon. Member for Bristol, Central (Mr. Palmer) about the ever-increasing appetite for capital expenditure in the gas industry. Perhaps he does not interpret this in its absolute sense, because the peak of expenditure on the gas system itself passed in the financial year 1967–68 and the conversion expenditure reached its peak in 1971–72. Expenditure should now begin to decline.
I have spoken already in this debate and I have little to add in principle——
§ Mr. Palmer
I was interested to hear the hon. Gentleman's view that the gas industry had passed its peak of expenditure. That is not the view of a great many authorities outside the industry. If the industry concentrated on improving some of its system with a view to preventing leakages, that in itself would involve considerable capital expenditure.
§ Mr. Emery
The hon. Gentleman is too great an expert to compare that sort of expenditure with the massive capital expenditure factors in which we have had to deal on the system, the grid, and conversion.
I have tried to make a reasonable statement on the position of the coordinated fuel policy. I am encouraged to think that that might have been the case because, although it has been on record since Friday it has not been torn apart today.
I argued then, and I repeat it only because there is nothing further I have to say about it, that the Secretary of State has a general duty ofsecuring the effective and co-ordinated development of coal, petroleum and other minerals and sources of fuel and power in Great Britain…and of promoting economy and efficiency in the supply, distribution, use and consumption of fuel and power, whether produced in Great Britain or not".Those duties are on the Secretary of State. They are the sort of assurances which hon. Members are seeking. The reason why I am suggesting that this 436 should not be written into the Bill as provided in the Amendment is that the Amendment applies to a specific aspect of the judgment which the Secretary of State has to make. The capital expenditure aspect is important, but there are a number of other aspects and, as I have pointed out, it is wrong to single it out of the Bill like this.
I hope that the Opposition having had their debate, and with the assurance I have been able to give, we might make progress.
§ Mr. Ronald Brown rose——
§ Mr. Brown
I want to say only a few words. The Minister's reply is disappointing. I did him the courtesy of rereading his speech on Friday. It was a poor effort because he did not address himself to the arguments and justify our withdrawing the Amendment.
The Minister referred on Friday, as reported at col. 1927 of the OFFICIAL REPORT, to the need for a careful balance of the considerations concerning the factors of relevance to the various forms of energy source. One would have expected him to have gone a little further in discussing this. He has the Vinter Report and could have discussed the information contained in it. He could have shown us how the various pieces of information contained in that report have been put together and where the balance lies in them.
The hon. Gentleman has shown complete disregard for the House in producing that report. I hope it will be possible at some stage to get a Minister or Mr. Vinter to come to the House or to a Select Committee to explain that report. It was outrageous of the Minister to take the view that he did not have to talk to us about it.
437 It may be difficult, as was outlined on Friday, for the Minister to make judgments on the various forms of energy source but, having regard to the vast capital investment in the gas industry, it seems to me that we should know what his judgments are based upon and not have him believe that his role as Minister is simply to try to get the Bill through without debate. The Minister's predecessor was sacked. Perhaps he will suffer the same fate himself, because his predecessor did not take much notice of the affairs of the House. I urge the hon. Gentleman to consider these matters in the House.
On Friday the hon. Gentleman said that his right hon. Friend the Secretary of State wanted, in whatever way possible, to bring the House into his thinking. What the hon. Gentleman did on Friday and has done tonight scarcely honours that pledge by his right hon. Friend. He has taken no notice whatsoever of the debate. The House is entitled to know upon what basis our future fuel policy is based.
There have been arguments over the years not only about our fuel policy but about the fuel policy of the whole of Europe. The hon. Gentleman was with me at the Council of Europe in 1966 when we discussed with the Energy Committee our energy resources and where our financial investment should be put concerning future energy requirements. I expected him to have updated that information. I should expect any Government in this country to be in a position to say what their judgment was and how it had been made. The results of investments made between 1970 and 1975 will be seen in the period from 1980 to 1985. Therefore, for the Under-Secretary to say that his right hon. Friend can at any time make a judgment seems insufficient. I intend to support the Amendment. I hope the hon. Gentleman realises that his answer to the debate on this very serious Amendment was extremely disappointing.
§ Mr. Eric G. Varley (Chesterfield)
We have had a useful debate on the Amendment. Certainly my hon. Friends who have taken part in the debate have been able to let the Government know, that they are not satisfied with the way the country's energy policy is developing. Reading the signs, one imagines that there will be an energy crisis within the next decade if we continue to use our resources 438 at the present rate. Therefore, the Government have an obligation to tell us what their fuel policy is. At the moment they have no fuel policy. They are drifting from one situation to another.
I know it is difficult to set out in precise terms what each primary fuel's share should be within any energy policy, but it should be possible to move towards more co-ordination than we now have.
I doubt whether we can deal with a co-ordinated fuel policy on the basis of an Amendment to the Gas Bill. However, this has been a useful debate. We are not happy with the reply we have had from the Under-Secretary. We think he should have been more forthcoming on some of these matters. We shall certainly have to return to the subject when the opportunity arises.
In view of the debate, which has been extremely useful, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.