APPLICATION OF ACT

HC Deb 29 November 1973 vol 865 cc685-97

8.3 p.m.

Mr. Arthur Palmer (Bristol, Central)

I beg to move Amendment No. 1, in Clause 1, page 1, line 12, leave out subsection (2).

The purpose of the amendment is to exempt electricity supply from the sweeping ministerial control which is proposed to be imposed upon it by this legislation. That these are sweeping powers the Committee need have no doubt.

The purpose of the Bill is to enable the Secretary of State to control the production, supply, and acquisition of petroleum and other fuels.

Electricity is referred to in the second part of Clause 1, and the proposal is to control its "production, supply and use". I notice with interest that the Explanatory and Financial Memorandum uses the words that I have just mentioned. In the electricity supply industry one normally talks about the generation, distribution and utilisation of electricity. But the wording of the proposed legislation refers to the control of its "production, supply and use". No doubt the Minister will confirm, one way or the other, when he replies that the meaning is the same. The intention appears to be for the Minister to have control over the whole process of electricity supply from the terminals of the generator through to the terminals of the ultimate consumer.

This great industry, which is basic to our economy, the greatest single user of capital in British industry ; an industry nationalised for many years now and for which Parliament has established 16 public corporations in Great Britain and one in Northern Ireland—because the scope of the Bill extends to Northern Ireland—and made elaborate provisions for its organisation and management, is to be handed over to the virtual dictatorship of the Secretary of State until 30th November 1974, and perhaps beyond, because certain reserve powers are included in the Bill. The Secretary of State may decide where and how much electricity may be produced and to whom it may be supplied. Therefore, in one stroke, all the detailed legislative safeguards for domestic, commercial and industrial consumers, and the quality and continuity of supply, are to be set aside.

The Committee will be aware that the technical staff in electricity supply have been much criticised, certainly by Ministers, for their industrial action and for deciding themselves what duties they will perform out of normal working hours. They are in conflict with the Government over a claim for certain agreed out-of-hours payments which they argue should be honoured, but on which the Government argue otherwise. Therefore, the technical staff, organised by the Electrical Power Engineers' Association are determining the conditions and priorities of supply and they are now in control of the situation. This had and is bound to have the effect of occasionally resulting in the cessation of supplies.

I suggest, however, that under the terms of the Bill consumers of electricity are now at much greater risk from the Secretary of State than from the technical staff because the right hon. Gentleman, through this measure, proposes to take away from the electricity supply industry its normal obligation to maintain continuity of supply. If consumers of electricity lose their supply, and it is not reconnected it will be very hard for them to decide who is responsible—the technical staffs or the Secretary of State. Under these powers the Minister may also, apparently, instruct an engineer or other employee to discontinue a supply if he wishes. He will become a virtual dictator. If such a situation occurs, I hope that the Minister will make it clear that it is he who is doing it and not the Electrical Power Engineers' Association. Once this measure has been passed, which will probably be quite soon, the electricity boards will be relieved of any obligation to maintain continuity of supply and the Minister can determine whether consumers receive electricity or otherwise.

I object to these powers. For all my political life I have advocated the public ownership of utilities and, in general, the basic industries. But I have never believed that those industries should be controlled and run by Ministers and civil servants. I do not know whether that view is fully shared by all of my hon. Friends, but that has consistently been my view. I believe that publicly-owned industries, at every level, should be run by those with the knowledge, training and experience which make them the best qualified to do that. No longer will that be so, apparently, for a year.

What can happen when Ministers attempt, through officials, to run complicated and advanced technology industries of this kind was illustrated, as the Minister knows very well, only a couple of weeks ago. Under the emergency powers which the Government took to themselves, the Department of Trade and Industry drew up an order which they placed before the House. That was an order for the control of electric space heating in all its forms. I confess that I gasped when I read that order. It seemed to be completely impracticable. It banned all electric heating as it was at first drafted, both on-peak and off-peak heating. Anyone with the slightest knowledge of the operation of power stations would know that such a ban was more likely to waste fuel than to save it. Great power stations cannot be placed on and off like kettles on the hob. That was not understood in the Department, apparently. I raised the matter when the Home Secretary was introducing these powers. I asked him whether there had been consultation with the electricity supply industry, and he said that he was sure that there had been consultation. He just did not know, but he gave that answer. Later on in the same debate we had the sequel. The Minister for Industry had to confess that there had been no consultation and that the order as drafted was a nonsense. The order had to be substantially revised.

This does not augur well for the powers which the Minister is now taking to himself. Apparently in the future he is to run the industry, rather than those who were appointed under the statute to operate it. Therefore, what guarantee does the Com- mittee or the electricity supply industry have that more blunders of this kind will not be made in the future, either out of sheer ignorance, which appears to have been the case on the previous occasion, or out of a conviction of right hon. Gentlemen on the Treasury Bench that they always know best?

8.15 p.m.

I do not wish to argue that circumstances do not arise in which Ministers must take special powers to deal with special situations. But if such powers are taken they should be limited in duration and should be subject, at every stage, to the closest parliamentary scrutiny. When we discuss the other amendments, we shall be arguing the matter of duration and for just how long this business is to continue, whether it can be modified and changed, and whether it can be indefinitely extended. But apart from the question of duration in the matter of powers of this kind, the powers should also be limited in scope and extent. The Secretary of State should not say to himself "I will take in everything, because that is the easiest thing to do." He should exercise some economy in his thoughts on these matters and take in only as much as is necessary, and nothing beyond that.

Therefore, the case for not including electricity supply is strong. After all, subsections 1(a) and (b) of the clause control the primary resources from which electricity is devised. As I understand it—no doubt the Minister will confirm this later—subsection 1(a) and (b) give ministerial control over coal, which is the greatest single source in the making of electricity, over oil and over uranium. It gives control in fact over all the primary resources. We get a little electricity in the United Kingdom from hydro power. I think that this also is controlled by the Bill, although I have not given a lot of thought to that. As I read then the Bill, the Minister has control over the primary resources from which electricity is derived—coal, oil and uranium. Electricity, as such, although hardly a substance—it cannot be seen, but under some circumstances it can certainly be felt—is a secondary energy source. It is as a secondary energy source that it transfers the primary energy to the point of use.

Therefore, why is there this desire on the part of the Secretary of State to rule everything by a virtual decree? Why does he want such an enormous empire of control? What is the real intention behind it? Are there any precedents for it? I cannot remember precedents. Has the Secretary of State brought in electricity with coal because he brackets the miners' perfectly proper refusal to work overtime with the power engineers' equally proper decision to decide their out-of-hours working? Does the Secretary of State automatically bracket the two? Does he feel that he must have control of electricity because of the labour situation? I hope that that is an unworthy assertion on my part. But these are sweeping powers and the Minister can decide what he will direct, which must include individuals.

Is it the intention that, if there were further industrial action in the electricity supply industry, he will take power to introduce outside labour or contract labour? The Secretary of the State, or the Minister for Industrial Development who will speak for him, will probably say that nothing could be farther from their minds. But they should clear up this issue because they could have all the control they needed, if they were content with the primary sources, without moving on to the universal secondary source. The more I study this Bill the more I think the Opposition should have divided against it. As it was, we let it go through, but it is a most objectionable Bill and it needs a tremendous amount of justification. The Minister should put up a very powerful case on the Government's behalf to the Committee for including electricity supply in the present Clause.

Mr. Tam Dalyell (West Lothian)

Before we give these enormous powers—as my hon. Friend the Member for Bristol, Central (Mr. Palmer) called them—may I ask two questions, the first of relatively minor importance and the second of critical importance?

The relatively minor question is ; after all that has happened in the last few weeks, is it not possible to publish the report of the committee which sat under the chairmanship of Peter Vinter, setting out the various options on atomic energy? I make no bones about the fact that I have always thought it should be published but, in a normal commercial setup, I can see reasons why the Vinter report should not have been made public. But we now have a completely different situation, where the whole world is in search of every form of energy that it can lay its hands on, and in these circumstances it would be sensible to publish such information as the Vinter Committee gave the Government on which they could base their options. But I do not make too much of that point.

On the second issue, I hope that before the evening is out we can get some kind of undertaking that before the House goes into the Christmas Recess there will be a statement, albeit an interim statement, on precisely the kind of decisions that will be taken in relation to nuclear policy. It is very easy to ask questions of the Government. I should like to say what I think they ought to do, and what the Minister ought to choose to do. As a first step, the Minister should get into his office all the experts who may have anything to contribute, and probe as deeply as possible whether the advanced gas-cooled reactor is, or is not, a starter on the information that will come from Dungeness B and Hinckley B, and all other available information.

This may be the most important decision which the Secretary of State will take in his political career, wherever that may lead him. It is of great importance, because we could sink thousands of millions of pounds into it. If there is anything approaching certainty, and the gas-cooled reactor looks like working and being completed within a 7 or 8-year period, then perhaps the Government would be right to take the risk and go ahead and have a whole programme of AGRs. This would be the best solution. But I have grave doubts, based on the views of those who know far more about the matter than I ever shall do, whether any Government would be justified in taking such a risk, because, at the end of the day, we might find that the corrosion problems were too considerable and this country really would be left in the proverbial cart.

There are two less attractive but more realistic propositions. One of them is to say "All right, let us go back to the British reactor system, the old hat Magnox, because at least we know that it will work." My information is that the Magnox reactor could be built within a 4 to 5-year period, and, if it were done on the basis of replication, a pattern of Magnox reactors could be created throughout this country. The costs would not be unreasonable by present-day standards, the engineering problems have been more or less overcome and this would give us the certainty of major nuclear production by 1978–79. That would be one option. It would be the safe course. It may not be on the frontiers of technology, but at least it is a serious option.

The second option is to go ahead with the country which has perhaps had the most successful nuclear power programme of any of the past 20 years, and I refer to Canada. The question is whether we should accept negotiations with the Canadians, to put our eggs in the one basket of the CANDU duterium reactor. I mention this because Lorne Gray has been in London this week and I think he has met the Minister ; at any rate, he has met senior officials. I should like to ask—it may be too early ; I have a Parliamentary Question down to ask for a full Government statement on discussions that are very new—whether we can have a statement on what the Canadian offer is, because those of us who have been to Chalk River, as I think my hon. Friend the Member for Bristol, Central, has, to the centre of the Canadian nuclear energy programme, know how extremely impressive it is. They would provide expertise and a market and, perhaps most enticingly of all from our point of view, by going ahead on the basis of CANDU much of the technology of the steam-generated heavy water reactor—as my hon. Friend the Member for Bristol, Central, and I know from Win-frith—could be used in a joint British-Canadian programme. Also, we know that the CANDU nuclear reactor actually works.

As I said, there are these two options, and I hope that the Minister will be able tonight to give the House an undertaking that before the Christmas Recess we shall have a statement—at any rate, an interim statement, about something which deserves the most senior and urgent ministerial attention.

Mr. Kenneth Warren (Hastings)

I cannot agree with the hon. Member for Bristol, Central (Mr. Palmer) in his attempt to exclude electricity, but I have some sympathy with him about the wording of the Preamble, because it is not really clear, as it ought to be, that what is sought is temporary provisions for controlling the production, supply, acquisition and use of fuel of all kinds. The fact that electricity has been added as an apparent afterthought is perhaps the reason for his amendment. I do not believe that one can separate the items along the chain of fuel production, whether the output happens to be gas, oil or electricity to the consumer. What one has to define is the primary point of production about which we are concerned—and that is the point at which something becomes usable by a consumer in the home or in industry.

It is interesting to find that we have a debate developing in which the Opposition appear to desire freedom and on this side there is a desire for control. No doubt the Minister will be able to help me out of that pitfall, into which I would not wish to fall without his aid.

I have some sympathy with the point of the hon. Member for West Lothian (Mr. Dalyell) about civil nuclear energy. I received on 12th November a most useful reply from the Minister about the amount of money put into civil nuclear research over the last 10 years. At first sight, it seems that the expenditure has been stable, but if one looks at the figures one sees that in 1963–64 £53 million was spent, which dropped to a low of £41 million in 1968–69, representing in real terms a drop to £33 million. In 1972–73, the last complete year for which we have figures, the expenditure was £49 million, which in 1963 terms represents £30 million. So we are down to just over half what we were spending 10 years ago. This is very serious, when we should be considering every possible alternative source of fuel.

8.30 p.m.

I wonder whether we should not examine the Canadian project very carefully before committing ourselves to a doubtful American reactor whose safety standards have yet to be proved to our satisfaction. We should consider this carefully perhaps, not only in the context of United Kngdom usage but in terms of European usage. As a member of the Select Committee on Science and Technology and of the Council of Europe, I shall be one of those who go to Canada next year to see their progress. I hope that we shall have a statement before the recess in the terms for which the hon. Member asked.

The Minister for Industry (Mr. Tom Boardman)

I am grateful for the opportunity to explain more fully the reason for including electricity in this clause. It was not included in the 1967 Act, but it is believed to be right to include it now because the supply of electricity in the event of shortage of coal or oil might be included to eke out those supplies. The powers might also be used if there were a shortage of generating capacity, which could arise through unwillingness to work out of work hours and a number of other circumstances, including plant failure and lack of plant availability.

In the recent fuel supply difficulties, without this Bill—indeed, this was the situation before the Bill existed—it would be necessary to operate electricity restrictions by use of the emergency regulations. We had prohibited the use of electricity for space heating in non-domestic premises, and for advertising, display lighting and floodlighting. This will be re-imposed if necessary, as I fear it will be, under the powers conferred by the Bill.

The hon. Member for Bristol Central (Mr. Palmer) criticised the way in which those powers were introduced and the lack of consultation. I told him when we debated this before that there had not been consultation on the precise orders which were brought in. I added that there had been consultation on broadly similar orders although alterations had been made—

Mr. Palmer

Why was there not consultation? Was it an oversight or was it deliberate? The Minister will agree that the order as first drafted was an absolute nonsense.

Mr. Boardman

I do not accept that it was an absolute nonsense. After further consultation, I thought it desirable to make changes in it. I explained the situation to the hon. Gentleman, and I can assure him that we are having careful consultations with this industry and with other industries on such measures as it may be necessary to take.

As a result of that order, coupled with the public response to appeals to economise on electricity, there was a reduction in demand of about 5 per cent. This will vary with the weather and there is not a constant temperature against which to take an accurate measurement. But as we get further into winter and the demand rate rises—and the margin between generating capacity and demand will remain slim—it may be necessary to retain the powers we have and also to make such further restrictions as circumstances may demand. The saving so far has been of significant help in the operational control of generating and of the distribution system.

I must emphasise that there is continuing need for economy and if the public, as I hope it will, continues to play its part by switching off unnecessary lights and other electrical apparatus, particularly in the late afternoon and early evening between 3.30 p.m. and 6.30 p.m., when demand is heavy, it will make an important contribution to the efforts of the industry to meet the load demand.

The hon. Member referred to the wide powers, asking whether it was necessary to go right through from generation to the consumption of electricity. I find that difficult to follow because, in the case of a shortage of fuel or of any shortages affecting operation or bringing restrictions on the system, it is necessary to ensure that one has complete control at demand level so that it is, as far as possible, brought down to match the supply available.

My hon. Friend the Member for Hastings (Mr. Warren) suggested that the primary point with which we are all concerned is where supply really reaches the consumer. That is in contrast with the hon. Gentleman's suggestion that the only control needed is at the point where the fuel is supplied.

Mr. Palmer

I am sure I am right about this. After all, if there is a shortage of primary supplies, then the electricity boards have their own load-shedding arrangements and they would automatically reduce the supply of electricity in the secondary sense. It is not necessary for a Minister to give an instruction on it.

Mr. Boardman

I am surprised to hear the hon. Gentleman suggesting that it should be left entirely to the discretion of the electricity boards, for whose responsible attitude I have as high a respect as he has, to decide the priorities that should apply across the nation. Indeed, wide discretion may have to be and is given on a number of occasions, but it must be the responsibility of the Government, when there is shortage, to take the decisions on the constraints which must be placed on demand and on which consumers or potential consumers shall be constrained or restricted and which shall be placed under less severe handicaps.

The hon. Gentleman said that this would hand over virtually dictatorial power to the Secretary of State to decide by whom supply was produced, when it was produced and to whom it was supplied. I remind him that this matter needs an order which is, of course, subject to the negative resolution procedure.

The hon. Gentleman also referred to the Electrical Power Engineers' Association. I shall not go into that matter except to correct his statement that it is in conflict with the Government. I remind him again that the difference is between the EPEA and the Electricity Council and the provisions in the code. The council and the association are collectively seeing whether there is a case which they can jointly put forward for consideration by the Pay Board.

Mr. Palmer rose—

Mr. Boardman

I hope the hon. Gentleman will forgive me if I do not give way to him on this point. I suggest that the conflict is between what the EPEA wishes to happen and what the code provides. Perhaps we can leave it at that.

The hon. Gentleman suggested that an order under the Bill would enable the Secretary of State to instruct an engineer to disconnect supply. That would not be so. It would enable the Secretary of State to give directions as to who should have supply, but the management of the industry must remain with those who are the capable and only people able to deal with it.

The hon. Member referred to the need to have control over primary fuels as being something he would accept, but said there was no need to go beyond that. I find it difficult to accept this, since there is a variety of ways in which fuel can be most effectively used to meet national needs. Not to have control would be to fall far short of the responsibility which my right hon. Friend will have to discharge.

The hon. Member for West Lothian (Mr. Dalyell) raised a number of points on the nuclear programme. They went somewhat wide of the amendment, but I would assure him, in relation to the various systems, including Candu, no less than the other systems which are canvassed, including Magnox, the advanced gas cooler reactor, the heavy water reactor, the pressurised boiling water reactor, the American reactors with their advantages and disadvantages, and the safety factors, that they are all being very carefully and fully reviewed by the Nuclear Power Advisory Board, which contains many of the most brilliant brains which we in this country have on the subject. They will give my right hon. Friend most skilled and able advice.

Mr. Alex Eadie (Midlothian)

I am obliged to the hon. Gentleman for giving way. This is a very important point. According to the Press the South of Scotland Electricity Board has had consultations with the Canadians about their type of reactor because the board has planning proposals in relation to a power station in Scotland. Can the Minister confirm that those discussions are taking place between the board and representatives from Canada?

Mr. Boardman

The representatives of the Canadian Government have seen a great number of people in the industry and rightly are putting forward their merits and achievements. Mr. Tombs is a member of that board and of the Nuclear Power Advisory Board, as the hon. Member will know. I accept what the hon. Member said about their achievements in Pickering, which has been a remarkably successful project. This is one of the systems which will be considered by the Advisory Board. It would be quite inappropriate for me to express now any view on which way the Advisory Board's opinion may go, or the time when that decision will be made, or, indeed, to say at this stage more than already has been said by my right hon. Friend.

The hon. Member also asked about the Vinter Report. I have nothing to add to what has been said in the House and in the Select Committee on a number of occasions about the reasons why it was considered inappropriate that that report should be published.

My final comment is that the position of the hon. Member for Bristol, Central seems somewhat anomalous. I think he must find himself in an anomalous position in urging an amendment to say that the powers should be retained by the industry when on all other occasions, particularly with reference to the nuclear industry, he has been critical of industry being given powers which, he has said, should be assumed by the Government.

I must advise my hon. Friends that we are unable to accept the amendment. Retention of this power to take control over the supply of electricity is, or may be, essential to a proper preservation of supplies and the safeguarding purposes for which the Bill is introduced.

Amendment negatived.

Clause 1 ordered to stand part of the Bill.