HC Deb 10 July 1974 vol 876 cc1357-70
The Secretary of State for Energy (Mr. Eric G. Varley)

With permission, Mr. Speaker I wish to make a statement.

The Government have decided that the electricity boards should adopt the steam generating heavy water reactor for their next nuclear power station orders.

In the Government's judgment the SGHWR will provide power reliably and we can proceed to order it quickly. The Chief Inspector of Nuclear Installations advises that there should be no fundamental difficulties in giving SGHWR safety clearance. SGHWR offers particular scope for British nuclear technology and we should exploit it. The 100 megawatt prototype at Winfrith has now been operating successfully for six years and is designed to reproduce the operating conditions of a commercial unit.

It is for these reasons that the Government believe SGHWR is the right system for the United Kingdom to pursue. Since we shall be moving forward from a prototype to a commercial size and design, it seems sensible to start with reactor units of 600–660 MW rather than a larger size so as to reduce the problems of scaling-up, and also for the initial programme to be relatively modest—not more than 4,000 MW over the next four years. We are asking the Central Electricity Generating Board and the Scottish boards to set preparatory work in hand jointly. A first order will be placed as soon as possible.

After the initial programme the aim should be to build up orders as rapidly as progress allows. The initial orders will provide a sound base for industrial development for the future.

Both the British and Canadian Governments see great advantage in full cooperation on heavy water pressure tube systems. United Kingdom nuclear organisations and the electricity boards will start discussing co-operation, with their Canadian counterparts immediately.

Our first commitment to the future must be the success of SGHWR. As to other systems, the Government have accepted that a major new programme of Magnox, depite its generally good operation. would not be sensible. While it is essential to complete the advanced gas-cooled reactor programme satisfactorily, it would be unwise to place further AGR orders until we have successful operating experience.

The high temperature reactor has considerable potential and I am asking the nuclear organisations to pursue further the propects of participating in its international development, in which our experience of gas-cooled technology will be of great value. But HTR is not suitable for the electricity board's main programmes at this time, nor do we have the resources for an immediate demonstration order while we are launching SGHWR.

The Government have decided against any commitment to the light water reactor but have asked the Nuclear Installations Inspectorate to carry through to conclusions its examination of the generic safety issues.

The Government will maintain our effort on the fast reactor on which we are in the forefront of technology. I am asking the nuclear organisations to urgently pursue the prospects for further international co-operation, covering development and the start of commercial ordering.

The present programme of SGHWR will dictate the pattern of nuclear and fossil plant ordering over the next three to four years. We shall take decisions on the capital investment for new fossil stations progressively, depending on load growth. We are fortunately placed with major fossil reserves.

In the later 1970s our nuclear options should widen. We should in particular be able to step up the SGHWR programme, given satisfactory initial experience of construction. We shall keep a close watch on the environmental implications of nuclear power, on siting and on the management of radioactive waste.

Owing to the printing dispute. I am making available a limited number of typed copies of the Government's Paper. I shall shortly publish the advice of the Nuclear Power Advisory Board. I am most grateful to the members for the time and effort they have given.

Discussions on reactor policy have been prolonged, but the period of uncertainty is now over. The Government's decision offers the prospect of a further—publicly acceptable—development of nuclear power in the United Kingdom, and I shall now discuss its detailed implementation with the electricity boards and the nuclear industry. It is important that all concerned should work together to make a success of our nuclear programme. They have assured me that they will do so.

Mr. Patrick Jenkin

This announcement must be one of the most crucial Government decisions about advanced technology which the House has heard for a good many years. I sincerely hope that the decision which the Secretary of State has announced today will prove to be successful and that it will not run into the kind of difficulties which beset the advanced gas-cooled reactor programme launched nine years ago. As it is an extremely crucial decision, I hope that the right hon. Gentleman will bear with me while I put a number of questions to him.

I am sure the House would be wise to await the report of the Nuclear Power Advisory Board before coming to any final conclusions. Will copies of the report be made available in typescript at as early an opportunity as possible so that hon. Members may see what advice the right hon. Gentleman has had? He has announced a programme for 4,000 MW over four years. Is he aware that this is very different from the 3,000 MW a year which he indicated in the debate on 2nd May would be the minimum programme of nuclear ordering over the next two years? Does not this amount to little more than a pilot programme? How long will it be before we can embark on a large-scale series—[Interruption.] The Prime Minister may say "Oh!", but it is one-third of the size of the programme which the right hon. Gentleman said would be appropriate as recently as May.

The Prime Minister (Mr. Harold Wilson)

How long has the right hon. Gentleman taken?

Mr. Jenkin

Does that mean that while other countries are going right ahead to reduce their dependence on coal and oil we will have to continue for some years more with a fossil fuel programme? If so, will the right hon. Gentleman tell the House what will be the cost to the British electricity consumer and what will be the cost to the balance of payments of such a policy during the 1980s?

Is the right hon. Gentleman aware that nuclear power is now nearly 50 per cent. cheaper than power produced by fossil fuel? Is he further aware that for every 3,000 MW of demand met by nuclear rather than fossil fuel the consumer will be saved about £100 million a year throughout the 1980s? Does his decision mean that during the 1980s consumers will have electricity bills that are 20 per cent. or even 25 per cent. higher than they would have been if he had been able to go for a programme of the size which he indicated was the minimum when he addressed the House on 2nd May?

We are going for a programme of heavy water reactors. What proposals do the Government have for the installation of capacity to produce heavy water? It may be that this pilot programme can be supplied from Canadian heavy water plants, but sooner or later we will have to meet capacity ourselves. Can the right hon. Gentleman tell us something about that?

There has been some suggestion in the Press that there might be a reconstruction of the National Nuclear Corporation. Will the right hon. Gentleman explore with the industry which other companies might like to participate in the NNC before he decides to expand the public sector?

I am sure that the House will want to debate this important decision. Is the Secretary of State aware that I hope it will be regarded as being of sufficient importance not to be relegated to a 90-minute debate on the Electricity (Borrowing Powers) Order which is at present before the House?

Mr. Varley

I am not sure whether the right hon. Member for Wanstead and Woodford (Mr. Jenkin) welcomes our decision. The fact is that the Government to which he belonged postponed making a decision for more than two years. The present Government have come to a decision within four months of taking office. I believe that it is a decision broadly acceptable to the House and to the country.

As to the right hon. Gentleman's detailed questions, the report of the Nuclear Power Advisory Board is practically complete. During the debate on nuclear reactor choice I was asked by my hon. Friend the Member for Bristol, North-East (Mr. Palmer) whether the report would be made public. It will be made public and I hope that it will be published within the next few days, certainly before the end of the month.

On the question of the size of the programme. we think that 4,000 MW of SGHWR capacity is about right, but I hope that by 1977–78 it will be possible to take stock of the situation to see how the ordering and the design are coming along and to consider the matter in that light.

The decision I have announced has implications for our fossil fuel power station programme, but to have gone to the sort of figures I indicated in the debate—not my figures but those of the Central Electricity Generating Board—would have meant that the Government were committed in advance on the safety clearance of pressure water reactors, and I do not think that that would have been acceptable. There are cost implications, but these are highly speculative and they are meaningless because neither an SGHWR nor a PWR has been built in Britain.

On the question of heavy water, in the early stages we shall have to collaborate with the Canadians. We shall enter into negotiations with the Canadian Atomic Energy Authority about securing the heavy water that we require, but eventually—with the success of SGHWR—I hope that we shall have our own heavy water plant.

We shall consider further the structure of the National Nuclear Corporation. I am not giving away secrets when I tell the House that the Chairman of the National Nuclear Corporation was not in favour of SGHWR, but he has put out a statement in which he says: The National Nuclear Corporation, including myself, will now turn their full energies to the design and production of SGHWR. That is a realistic and constructive attitude for Lord Aldington to take.

Several Hon. Members

rose—

Mr. Speaker

Order. The House will realise the difficulty of the Chair. We have a great deal of business to do today. We cannot debate the statement now, but for a limited time I will allow short and sharp questions.

Mr. Palmer

Is my right hon. Friend aware that many hon. Members on both sides of the House will congratulate him on his courage in making this difficult but sound decision against much opposition and on his wisdom in adopting the views of the Select Committee? Is there hope of a sound and comprehensive agreement with the Canadians fairly soon, since this would give great confidence all round and be of tremendous assistance in world markets?

Mr. Varley

I thank my hon. Friend for his kind remarks. We believe that realistic co-operation with the Canadians is possible. Informal talks have already taken place and we hope to firm them up in the weeks ahead.

Mr. Neave

Is the right hon. Gentleman aware that a great many people in industry will applaud him for having the courage of his convictions and for giving British heavy engineering the opportunity that it has been waiting for to get on with the nuclear job? Will he hold talks with the Canadians at ministerial level as soon as possible?

Mr. Varley

Certainly I want to talk to my Canadian opposite number, but a good deal of the detailed discussions will take place, and have already taken place, with officials. I agree with the hon. Gentleman that this announcement should be regarded as a great boost for British technology and British engineering, and I am sure that the opportunity will be seized.

Mr. Grimond

Is the Secretary of State aware that at first sight it might seem sensible to embark upon a fairly moderate programme at this stage? What is the estimated capital cost of the programme, and what is the estimated cost of the electricity generated?

Mr. Varley

The actual cost is highly speculative, and I ask the right hon. Gentleman to wait until the publication of the Nuclear Power Advisory Board's report which I hope will come out within the next few days. The cost is speculative in the sense that neither the SGHWR nor the system preferred by the CEGB has been built in Britain. I do not think that there is a great cost difference, but there are cost differences when one compares nuclear reactors with fossil fuel reactors. If we can move quickly to series ordering for SGHW—I said that we hope to take stock of the situation by 1977–78—there could be real savings.

Dr. John A. Cunningham

Is my right hon. Friend aware that most people will recognise that he has been faced with a difficult decision? He has decided to stay with British technology, and this will be a boost to the morale of British scientists and technologists. It is most important that my right hon. Friend should have decided upon a limited programme—

Mr. Speaker

Order. Is the hon. Member coming to a question?

Dr. Cunningham

Yes, Mr. Speaker. Is the Secretary of State aware that there are two question marks about his decision? One is that we have not yet built a commercial-scale SGHWR—

Mr. Speaker

Order. Question marks are not enough. The hon. Member must put what he wants to say in interrogative form.

Dr. Cunningham

I beg your pardon, Mr. Speaker. Is my right hon. Friend aware that we have not yet built a commercial-scale SGHWR in this country and that our dependence upon Canadian supplies of heavy water may turn out to be a disadvantage?

Mr. Varley

I am not sure that I wholly accept what my hon. Friend said about the Canadian situation and the supply of heavy water. I am confident that we can come to firm arrangements with the Canadians about heavy water. We do not have a commercial SGHWR operating in Britain but, as my hon. Friend knows, Winfrith has a 100-MW prototype that has operated successfully for six years, and I am confident that it can be scaled up to the size I outlined in my statement.

Mr. Skeet

Is the Secretary of State aware that the CEGB may require six major modifications of the SGHWR? In that case, shall we not be faced with all the teething problems that we experienced with the AGR? Bearing in mind that France, Western Germany, the rest of Western Europe, Japan and the United States have all gone down the road of light water reactors, how has the hon. Gentleman come to the conclusion that he has reached and remained unconvinced by world experience?

Mr. Varley

I am sorry that the hon. Gentleman cannot back British technology, which is what he is implying. We came to our conclusion on SGHWR on the basis of reliability. We think that we can have a reliable system with SGHWR. One of our other conditions was public acceptability, and I think that SGHWR will be publicly acceptable to Britain. There is also the question of giving a boost to British technology. As to PWR, I know that the hon. Gentleman would have preferred that choice.

Mr. Skeet

Light water.

Mr. Varley

There are two versions of the light water reactor. The hon. Gentleman is assuming that the light water reactor would have received immediate safety clearance, but the Nuclear Installations Inspectorate said that it needed two years to consider the matter before coming to a conclusion.

Mr. Hardy

Is my right hon. Friend aware that his statement deserves to be greeted with considerable satisfaction, not least because he has maintained British nuclear technology despite the considerable and often ill-based pressure which appears to have half-persuaded the right hon. Member for Wanstead and Woodford (Mr. Jenkin)? Will my right hon. Friend make clear that there is no ground for concern about the adequacy of the supply of heavy water? Will he also say a word about his idea of the future composition of the National Nuclear Corporation.

Mr. Varley

I do not doubt that we shall have the ability to get a firm arrangement with the Canadians in the initial stages on heavy water. As the programme builds up, I hope that we can have our own heavy water plant. As for the National Nuclear Corporation, we shall be looking at this matter carefully. It is clear that Sir Arnold Weinstock of the GEC would like to reduce its shareholding, but there might be others who will want to take it up. We shall consider the matter further.

Mr. Hannam

Does the right hon. Gentleman agree that the programme represents a sharp reduction in our nuclear power programme and will lead to extra costs of electricity in the years to come? Has he considered a mixed programme including the SGHWR and light water reactors?

Mr. Varley

No. So far as the Government are concerned it is a firm commitment and a straight commitment to go for the SGHWR. The hon. Gentleman will see that in paragraph 14 of our report we say that we have asked the Nuclear Installations Inspectorate to carry through to conclusions the assessment of the generic safety of the PWR. This it will do.

Mr. Fernyhough

Is my right hon. Friend aware that the British public, as distinct from some Members of the House, will welcome the high priority he has given to safety as against price? Is he further aware that because this field is still so uncharted, this modest beginning is sensible? When he has discussions with the CEGB about the placing of the contract for four or five heavy water nuclear stations, will he bear in mind the problems of the heavy electrical engineering industry, particularly in development areas, and see whether any orders can go to those areas?

Mr. Varley

Certainly the decision we have announced will be welcomed by some engineering interests associated with power station development. I am sure that there are some within my right hon. Friend's constituency or region who will welcome the decision, even the modest start to this programme—a programme which, as I have already indicated, I hope can be built up later.

Mr. Nigel Lawson

Is the right hon. Gentleman aware that his decision will cause considerable dismay in an important sector of the British nuclear power industry, including British Nuclear Design and Construction and the GEC Reactor Corporation in my constituency? Does he know whether the hyper-cautious Swiss have given the light water reactor and the PWR safety clearance? Will he confirm that he is throwing away great export opportunities in respect of the light water reactor, particularly in conjunction with the French, and is saddling us with a large import burden in obtaining heavy water from the Canadians? Will he confirm that he has thrown over the advice not merely of the CEGB and the Chairman of the National Nuclear Corporation but also of Lord Rothschild's "think-tank" after an objective study of the problem?

Mr. Varley

It is not customary for Government spokesmen to comment on the advice that Governments receive from the Central Policy Review Staff. I do not think I can go any further than that. The hon. Gentleman knows that there are many people who are just as passionate in their advocacy of the SGHWR as he is in favour of the LWR. That goes for the Scottish Board, Lord Hinton. the Select Committee, the Institution of Professional Civil Servants and many other who have a great deal of knowledge of these matters.

Mr. David Stoddart

May I join in congratulations to my right hon. Friend since he has made an eminently sensible decision that will be welcomed by all the people in industry, including working people? May I ask him two questions? First, will he make sure that the export potential of the SGHWR will not be ignored? Second, does the decision to have a slower programme reflect an investigation into the absurd projections of demand made by the CEGB?

Mr. Varley

On the question of demand by those in the electricity industry, my hon. Friend will see that our forecasts and estimates are set out in the Nuclear Power Advisory Board's report. As for the question of exports, the primary consideration in coming to this decision was to have a reactor which would provide power reliably for Britain. I believe that as the SGHWR is built up there will be an export potential.

Mr. Tom Boardman

Will the Secretary of State recognise that until we see the report of the Nuclear Power Advisory Board it will be difficult for hon. Members to form an opinion? Will he confirm that his decision was contrary to the choice of both the CEGB and the National Nuclear Corporation? Will he also undertake to make a further statement on the supply of heavy water, which is a matter of concern on both sides of the House?

Mr. Varley

If a statement is necessary on that aspect of heavy water supply, I shall come to the House and make it. But, as I have already said on two or three occasions, we are satisfied that we can have an arrangement for this programme which will be satisfactory. In respect of the Nuclear Power Advisory Board, it was clear that they, the CEGB and the National Nuclear Corporation would have preferred to go for the LWR. To that extent their advice has been rejected, but I have been told by Lord Aldington and by the chairman of the CEGB that now that the Government have made up their minds on reactor choice, they will back us and make a success of it. I certainly hope that this will happen. I have by no means rejected the unanimous advice of the Nuclear Power Advisory Board because it was impossible to get a unanimous decision out of it. As a result of my meeting yesterday, I think the balance of opinion from the NPAB is in favour of the Government's decision.

Mr. Dalyell

Is my right hon. Friend aware that some of us are pleased at the decision and also at the rational and convincing methods used by my right hon. Friend in arriving at the decision over the past few months—which is a change from the sort of situation we have had in the past 10 years in terms of technological decision-making? Apart from the heavy water aspect, what else is included in the co-operation package with the Canadians? Some of us think it wise that we are going first for 660 megawatts and not into the uncharted territory of bigger stations.

Mr. Varley

Certainly it is prudent at this stage not to go straight from a 100 megawatt prototype at Winfrith up to 1300 megawatts. We should make a success of the 600–660 megawatt-type first. As for further industrial collaboration with the Canadians, I think that there is scope in this direction and it is a matter which we shall be discussing.

Mr. Churchill

Is the Secretary of State aware of the disappointment among those who work in heavy electrical industry at Trafford Park in the Greater Manchester area at the Government's decision to proceed with a programme only one-third of the size which the CEGB thought desirable? Will he confirm that the full programme suggested by the CEGB was unacceptable to the National Union of Mineworkers?

Mr. Varley

I do not know what connection that supplementary question has with the matter under discussion. Perhaps the hon. Gentleman will take me to one side and explain precisely what he means. As for Trafford Park and the GEC, I have already said that Sir Arnold Weinstock said that he wants to back the decision and make a success of it now. I am confident that he means what he says.

Mr. Swain

Is my right hon. Friend aware that since the Labour Government came into office we have had statements about the mining industry, the oil industry and now about the nuclear industry? When will he, in the interest of hon. Members and the general public produce a White Paper setting out where each of the main energy-producing industries will fit into the energy needs of the nation by 1980?

Mr. Varley

I want in the years ahead to produce as much information as possible for the House about energy and energy policy. I believe that the 1980 perspective is still a good one. By 1980 in terms of value Britain should be self-sufficient in energy. We have to make the most of it and make sure that we use that opportunity in general economic terms

Mr. John Davies

Although I congratulate the Secretary of State on an act of courage which I am sure he realises is also an act of faith, may I ask him for one assurance? He said that he intended to proceed to a measure of international collaboration in terms of the high temperature reactor. Does he intend to do the same in terms of the fast breeder reactor, where there are great rewards available to us from international cooperation, especially in Europe?

Mr. Varley

Yes, Sir. It will certainly be possible to look for further collaborative efforts with the fast breeder reactor and the HTR. As to the right hon. Gentleman's first comment about my decision being an act of faith, there was of course a risk involved, no matter what course the Government had taken. But I am sure that the SGHWR is the right system for Britain. I know that the majority of British industry will welcome it and will want to back it.

Several Hon. Members

rose—

Mr. Speaker

Order. I have allowed more than half an hour for questions on the right hon. Gentleman's statement. I am afraid that we must move on now. However, I assure hon. Members who have not had an opportunity to put questions to the Minister that, if there is a debate in due course, it may be that they will have preferential treatment.

Mr. Evelyn King

On a point of order, Mr. Speaker. May I draw attention to the fact that the whole of the research for this project has been developed in my constituency by a devoted team over the past 10 years? Might not the House spare one moment to pay tribute to the immense value of their work?

Mr. Speaker

Order. The hon. Member of Dorset, South (Mr. King), in an irregular manner, has made his point.

Mr. Patrick Jenkin

On a further point of order, Mr. Speaker. You suggested that a number of hon. Members had not had a chance to catch your eye in this exchange on the ground that there would be a debate. We have not been given any undertaking that there will be a debate.

Mr. Speaker

I said "If".