§ 6.37 p.m.
§ Mr. Arthur Palmer (Bristol, North-East)
The subject that I wish to raise on the Second Reading of the Consolidated Fund Bill is the present position of the high-temperature nuclear research project.
I believe that it is an important matter in itself, and it has a very real bearing on the future of nuclear power in the United Kingdom and in the Western world generally. In my judgment, the importance of the Dragon project, as it is usually known—it is, of course, an OECD project—for the development of the high-temperature nuclear fission system has never been fully understood in the Ministry. I say that because a statement has been made publicly that the high-temperature reactor has no place in the forward thinking of the electricity boards.
If indeed it be the case, then it is a fairly new development. In evidence to the Select Committee on Science and Technology, the Chairman of the Central Electricity Generating Board, Mr. Arthur Hawkins, said, not so long ago, that he saw the high-temperature reactor as a useful intermediate stage before the fast breeder was ready for commercial use.
I do not know whether the Advisory Committee on Nuclear Reactor Choice still exists, but it did exist before we made up our minds on the next generation of British nuclear reactors. The advisory committee also spoke extremely well of the HTR. However, I wish to be fair. The evidence of Mr. Hawkins to the Select Committee and the comments of the advisory committee were made before the Government decided—rightly, in my view—that the SGHW—the steam-generating heavy water reactor—was the best and safest future system for application in new nuclear stations, rather than the 1717 American light water reactor proposed by the CEGB.
But it is a piece of crude reasoning to decide that because we are using for new nuclear stations the more developed SGHW system—of which there has been a prototype in existence for many years—we can drop other valuable nuclear work. That is a crude piece of reasoning, unless it is seriously suggested that we need so many technical and scientific staff on the SGHW reactor that we must concentrate all our efforts upon it, taking them away from the HTR system. If the HTR is finally abandoned, it would be interesting to know how many staff engaged on the project will be switched to other nuclear reactor work.
Apart from British nuclear needs, at a time when energy demand is falling—we hope temporarily—the handling of this matter has been politically inept internationally. The Dragon project is a brilliant example of European scientific collaboration for the general good of the world. Yet my right hon. Friend the Secretary of State for Energy has said that we do not have the resources to pursue its further development, but if our partners wish to carry on we have no objection. I pitch my words as moderately as I can, but is that not an example of the national self-satisfaction that makes this country often the despair of even our best friends?
Where is this project? It is where it has been from the start. It is not in the wastes of high Germany, or in some remote province of France. It is in the cosy rural atmosphere of Hardy's Wessex country in Dorset. Winfrith Heath was, I think, the Egdon Heath about which Thomas Hardy wrote. It is impossible to imagine a more English rural environment. The project was started in 1959 and since then the United Kingdom, unlike its partners, has had the advantage of the project being located on its national territory. That is something of which we might well be proud and, from some points of view, grateful. The project brings money to the country apart from scientific and technical prestige.
The figures are difficult to work out, and much depends on the basis on which the calculation is made, but I am told that the net gain to our balance of payments 1718 is, at current values, about £1 million. Indeed, the Secretary of State admitted that in a letter dated 15th September which he wrote to the staff engaged on the HTR project at Winfrith. He said:I appreciate that Dragon yields a gain to our balance of payments, but the proposed extension would nevertheless involve the United Kingdom in further substantial expenditure".What is meant by "substantial expenditure"? How is "substantial" defined? Once again, much depends on the basis of the calculation. The extra cost in immediate cash terms, forgetting the considerable offset, is less than £5 million per annum. I am told that the total cost of Dragon is less than 2 per cent. of the Atomic Energy Authority's budget, for which the Supplementary Estimate is about £22 million.
I cannot follow the argument that this is substantial extra expenditure. Whatever figure is taken, the expenditure must be less than £10 million. There is no comparison between that amount and the hundreds of millions of pounds of public money which, last night, the House decided to authorise for the Chrysler rescue.
We have here a nuclear power technology that is only in its infancy. As a Westcountry Member of Parliament, I am beginning to wonder whether there is something in Wessex nationalism after all. If the eccentric people in Wessex who support the separation of Wessex from the United Kingdom were taken serious, we might all be a little more friendly towards the Dragon.
The first open indication that the Government were going slow on the HTR—perhaps one should say going cold, as this is a high-temperature reactor—was in August, when the House was in recess. When our proceedings resumed, I questioned the Secretary of State but he gave a non-committal answer. In addition, my right hon. Friend, in a strenuous session this week before the Select Committee on Science and Technology, answered a run of questions. In addition, I know that there has been a deal of correspondence between the Minister and those most affected at Winfrith. Presumably, there has been an even deeper correspondence—which has not been published, of course—between the Minister and the 1719 headquarters of the Atomic Energy Authority.
I cannot say anything about the evidence that was given to the Select Committee. Although that evidence was in public, it has not yet been published or made officially available. We were anxious to ask my right hon. Friend questions about a number of energy matters. It may be that he would have preferred to be in Brussels, but he was detained at Westminster on parliamentary business.
On Monday 15th December there was a meeting in Brussels. I do not know the exact title of the body but I understand it to have the status of an energy committee of the EEC Council of Ministers. That meeting had some relevance to the question whether Dragon is to live or be slaughtered. I do not know whether my hon. Friend who is to reply attended that meeting as a substitute for my right hon. Friend, but I know that before the meeting took place there was a great deal of diplomatic activity.
On 5th December the future of the Dragon project and the British Government's attitude were discussed by the EEC ambassadors. Unfortunately, in the end no agreement was reached, largely it seems—I hope I am not over-pitching it—because of the United Kingdom's negative attitude. It seems that, on the one hand, we could not say "No", but, on the other, like the young lady of the story, we could not say "Yes" either. It seems that we demand that our partners give a clear indication by 31st March—that is the favoured date—that they will fill the financial gap left by a lower British contribution. Failing that, we are prepared to see the whole project come to an end.
The meeting on Monday was important because many people, including the devoted Winfrith staff, hoped that this matter would appear on the agenda. Once again, the United Kingdom was negative about it. The Government refused to put their name to the matter, despite pressure from those who have for a long time been concerned with this work. I understand that we said, rather sulkily, that it was up to Germany. It is probably well known to those who follow 1720 this subject that the Germans have done a fair amount of independent research work on high-temperature reactor technology.
I do not know for certain whether the matter was raised by the Germans at the meeting on Monday, under the heading, "Any Other Business". There seemed to be some conflicting evidence when my right hon. Friend appeared before the Select Committee. Several notes were passed. That was rather surprising, as communication by telephone is not difficult between London and Brussels. No doubt when my hon. Friend replies he will enlighten us about the situation, since I assume that he was there in Brussels.
However, whatever the Germans do or do not do, is our conduct in this matter worthy of a great country with a high tradition of scientific and technical excellence? There can be no doubt about the quality of the work already done at Winfrith on the high-temperature reactor. I am sure that my hon. Friend would be able to say that about the ability of the staff of the Atomic Energy Authority.
All the experts accept that in principle there can be no doubt about the value of the HTR to our nuclear future. It is a highly flexible system, with valuable technical qualities that are different from those of other reactors. As many types of reactor in future will involve a mixed system, the high-temperature reactor could be a most useful component. There can be no doubt about how much we and others in advanced industrial countries will need the high-temperature reactor should there be problems with the operation of fast breeders, when they come. To some extent the high-temperature reactor represents a useful electrical fallback position, apart from its merits as a producer of direct heat.
I shall throw no doubt upon the fast breeder, though there are others who are worried about certain of its characteristics. Some concern, for instance, has been expressed by Sir Brian Flowers, who is Chairman of the Royal Commission on Environmental Pollution. He is a very distinguished scientist. I am not saying whether he is right or wrong, but he has drawn attention to certain safety and contamination problems which can 1721 arise with fast breeders. In the edition of The Guardian a few days ago he said, speaking of fast breeders:The plutonium fuelled reactors seen by some energy strategists as the main source of energy in 30 years' time—may make them unacceptable for deployment on a large scale.He is especially concerned about the fast breeder in its present form. I am not saying that Sir Brian Flowers is right, because many people connected with nuclear energy do not agree with him.
§ Mr. Patrick Jenkin (Wanstead and Woodford)
While this matter is peripheral to the main subject of the debate, would it not be right to say that a number of distinguished commentators have taken Sir Brian Flowers' letter to the Prime Minister to indicate that the Government may well be right to go ahead with a prototype demonstration commercial fast reactor, but that if they do they should do so on the terms of the recommendations set out in the letter? Therefore, so far from being a letter advising against the reactor, it is a letter more concerned to point out the necessary safeguards to ensure that it will operate safely.
§ Mr. Palmer
I am grateful to the right hon. Gentleman for putting the matter in its proper perspective. However, whatever faith we have in the fast breeder—certainly eventually it will be essential—if there are problems, the high-temperature reactor is perhaps a useful fallback for electricity generation. That argument has been put forward for a long time, whatever its strength.
Finally I beg my hon. Friend to impress on our right hon. Friend that in this matter Britain should come out from behind the curtain. We need a joint constructive Anglo-German approach.
It is suggested that if finance is the problem, the Americans would probably be prepared to give considerable assistance. They have been working themselves on high-temperature reactor technology through Gulf Atomics. I do not think that it has been very successful. One problem is that the Americans tend to leave too much of this kind of research to private capital. When private capital cannot see a fairly immediate return, it is not always so enthusiastic. Therefore, the Americans—this could be to our advantage—may look to Europe with its 1722 State systems of nuclear research and construction, and I do not think that they will need a lot of persuading to come and put their money in, if necessary. But we cannot expect the United States Government to assist in this way if the two principal European countries concerned—the United Kingdom and Germany—cannot achieve unity. It would be absurd. Therefore, I suggest—constructively, I hope—that my hon. Friend should put this matter to his right hon. Friend.
At heart, I doubt whether money is the real difficulty. If so, there are other ways round the problem. I suspect that the trouble is lack of understanding in the Department of Energy that our future lies with new, not old, technologies.
We could almost say that motor car manufacture is fast becoming an old technology. We may find that in a few years, whatever efforts advanced industrial countries may make, it will be cheaper for the world to manufacture motor cars in other countries, some of which are at the moment covered with jungle. It may be that the West's already developed technology can be used and applied more cheaply in other countries than we in the West can afford, with our higher standard of living.
This country's future lies in keeping ahead all the time, technologically. We should not use for too long what is well known. We should pursue technology into new places and beyond new frontiers. That is the true industrial future of the United Kingdom, but I am fast beginning to doubt whether that is understood at all in the Department of Energy. If I am wrong in the case of the high-temperature reactor, no doubt my hon. Friend will indicate by his answer today.
§ 7.4 p.m.
§ Mr. Patrick Jenkin (Wanstead and Woodford)
The hon. Member for Bristol, North-East (Mr. Palmer) has performed a valuable service in providing us with an opportunity to debate this important issue tonight. At times I thought that I detected some difficulty on his part in finding words that would aptly describe his sense of indignation about this matter without at the same time giving undue offence to the Undersecretary of State. I think that he was too kind. What he has told us is a very 1723 sad story of Government contradiction, prevarication and downright muddle over the extension of the Dragon reactor project. It now seems almost inevitable that the project, which has been and could be of great value to a European energy policy, should now come to an end with the loss of 300 jobs and other unfortunate consequences.
I say "almost inevitable", because I believe there is, even now, time, if there were the will, for the British Government, in conjunction with the other Governments involved, to save the project. It is important that the Government should make and be seen to make some effort to do that if they are to begin to live down the reputation that they are gaining of being an unreliable partner for our European colleagues in international energy projects.
The hon. Gentleman referred to the earlier attitude of the electricity authorities, as disclosed to the Select Committee. It was not only the electricity authorities that took the view, only a few months ago, that the high-temperature reactor technology was important. The previous Secretary of State for Energy—the present Secretary of State for Industry—in his statement to the House on 10th July 1974 said:The high temperature reactor has considerable potential and—I ask the House to mark the words—I am asking the nuclear organisations to pursue further the prospects of participating in its international development in which our experience of gas-cooled technology will be of great value."—[Official Report, 10th July 1971; Vol. 876, c. 1358.]What a change there is here when the Government appear to have been bending most of their efforts to ensure that the only effective international project on high-temperature reactor technology should be brought to an end. Furthermore, the right hon. Gentleman was well advised to have taken the view at that time. The Report of the Nuclear Power Advisory Board, on page 9, states thatThere is general agreement that the HTR has the greatest potential among thermal reactor systems but that it could not be sufficiently proven for series ordering in the UK before the early to mid-1980s.I stress,the greatest potential among thermal reactor systems".1724 Now, almost at the end of the road, we are faced with the Government's decision to kill the only project in this country in that sphere.
I do not regard the main potential of high temperature reactor technology as being electricity generation, though the direct cycle possibilities offer some exciting prospects. There is a lot of work to be done. It is in the area of process heat—providing heat for the steel industry, for the chemical industry, for hydrogen manufacture and a whole range of projects—where the gas temperatures that the HTR technology can produce will be of the utmost value.
It is now clear that the Government's attitude to this project has become highly equivocal, if not downright contradictory. When the extension beyond the present five-year period was discussed—discussions began in April this year—the only United Kingdom offer on the table was that the project should end in March 1976 and the only question was how the costs would be snared up to the termination date. At that time there was no interest by the United Kingdom Government in continuing Dragon. Our partners in the Dragon project were, however, looking for an extension, because they at least recognised its value. Indeed, they believed that it would be easier to get funds for an extension than for the expenditure necessary to wind it up.
The question was referred to the Community to see whether some form of agreement could be reached involving the Community—because Dragon is at present an OECD project. In the Community the matter was referred to the Atomic Affairs Group—the Groupe des Questions Atomiques. But every time other members of the Community sought to raise this issue, during the spring and summer, they were baulked by the United Kingdom Government, who repeatedly said that they were not ready to discuss Community participation.
In August, the matter came out into the open. As the hon. Member for Bristol, North-East rightly said, the staff wrote to a number of hon. Members and drew the matter to our attention. On 16th September I met a deputation of staff and learned the whole story at first hand. I had earlier written to the Secretary of State, and on 16th September the Secretary of State replied to me; his letter 1725 was in fairly blunt, uncompromising terms indicating that the United Kingdom was refusing to be involved in any extension at all. I quote just one paragraph from his letter:Although Dragon yields a gain to our balance of payments an extension would nevertheless involve us in further substantial net expenditure. A great deal of time and money will be needed to realise, on a commercial scale, the potential advantages of the HTR; it is unrealistic to regard Dragon as any form of cheap insurance for the present United Kingdom nuclear power programme.Even while he was writing that letter there were leaks from his Department to the effect that perhaps that was not the last word. It was thought perhaps there might be a chance that the United Kingdom would be willing to see an extension of the project, although with a substantially smaller United Kingdom contribution. That is the course which I would urge even now upon the Government. I recognise that we cannot go on bearing such a large share of the project and that a smaller share is necessary, but the answer is not to kill it.
The Secretary of State on 19th September confirmed to his European colleagues that this was what he was now prepared to consider. I will read briefly from my reply to the Secretary of State on 22nd September because it sets out very clearly my view as it was then and as it is now.My own view is that HTR represents a project of potential economic value in its own right. It is not an alternative to breeders.—and here I disagree with the hon. Member for Bristol, North-East. It is not a stand-by in the event of difficulties with thermal reactors, because the time scales are wrong.Its merits come under two heads:—(a) HTR technology is potentially of great value as a source of heat for process industries, (b) it is enormously important to obtain a capacity in high temperature gas technology so that the gas-coled breeder reactor system can be considered as a possible variant to the liquid metal coolant system. We do not have to pay a great deal as our contribution to Dragon, even so, I would not be against our negotiating a higher share for the Germans or the French. I would be very distressed indeed if we were to abandon it altogether.By that time the Dragon project was in dire financial straits. It was beginning to run out of money, even to effect a proper rundown of the system, so that the 1726 Secretary of State's offer to consider extension was given an exceedingly short time limit for acceptance. Signor Spinelli of the Commission said that the offer came very late and that members of the Commission must be given more time. He asked for a year's extension to be agreed with the possibility of a further four years if that could be negotiated. The Secretary of State considered the matter and said he could envisage only a three-month extension. On 6th October he wrote to me and said:We certainly would not wish to see the project brought to an end if our other partners wish to continue to work at Winfrith under a new financial regime … we have told them we are prepared to provide support to give them more time to formulate alternative arrange ments.He said we would be able to bear the cost until June 1976 if our partners would do likewise.
Then came the crucial sentence:We have made this offer conditional upon its acceptance by 30th November at the latest given that the de-secondment notices would take effect on 6th December.The Under-Secretary of State made a public statement at Basle on 7th October confirming what I have just read to the House. It was therefore necessary to find new funding by 30th November, the date by which this offer had to be accepted. It was therefore necessary to find new funding and to agree to acceptance of the offer by 30th November. This was far too sudden. By now it was apparent that the Americans were interested and that they would need time to consider their position.
On 13th October I tried to raise the matter in the House, but for reasons which will be understood I was unsuccessful. The matter was then referred to the Committee of Permanent Representatives of the Commission to see whether they could find some basis on which an extension could be negotiated. The Germans suggested that there should be a nine-months' extension of the project until December 1976 to allow time to see whether there could be a four or five-year continuation. This was then accepted by the United Kingdom Government, but on two conditions—first, that any new basis would be retroactive to 31st March 1976. That seemed a reasonable condition. They also went on to say that there must be a clear indication of support for the new 1727 basis by 31st March 1976 and that without any such clear indication the project must close on 30th June 1976. For a moment, therefore, it looked as if there might be a possibility of saving the project, for this offer was welcomed by COREPER as a basis of negotiation. Clarification of the first condition was requested and the matter was referred back to the Groupe des Questions Atomiques.
However, before the meeting of the GQA, there was another shift in the United Kingdom attitude. There was an informal meeting attended by an official from the Department of Energy, Dr. Pictet, the Chairman of the Dragon Board of Management, Sr. de Bacci, of the EEC Commission, and Dr. Shepherd, the Manager of the Dragon project. Although the Department of Energy official made assuring and soothing noises that the first condition was no more than a longstop and that it was not to be interpreted rigidly, he dropped another bombshell and made it clear that any new basis of negotiation must involve no separate United Kingdom support at all. He said the only contribution the Government were prepared to make was through their share as a member of the Community.
When it got to the Groupe des Questions Atomiques, the situation was already very near to disaster for it had to be faced that the United Kingdom was not prepared to put any separate contribution at all into the project.
There was no attempt at that meeting of the group by the United Kingdom representative to try to keep the project alive. Indeed, the impression I have been given, as the impression held by those at the meeting, was that the United Kingdom representative at that meeting of the group was a hatchet man sent to cut the project down and kill it.
That matter was finally reported back to COREPER on 5th December. The German ambassador was faced with the prospect of no United Kingdom contribution and suggested a nine-months' extension to 31st December. After much argument it was conceded that there was no unanimous support and that therefore the Community could not become involved.
1728 The following week came the first indication of real American interest. The Energy Research and Development Authority wanted more time to consider. I quote excerpts from the telegram sent to Dr. Shepherd, the Chief Executive of Dragon.We sincerely hope means can be found to continue Dragon project because of the unique capabilities of the reactor for testing of gas cooled reactor fuels. The US gas cooled reactor program is now undergoing re-examination because of the recent changes in the industrial situation. ERDA does wish to continue gas cooled reactor program, particularly for the advanced concepts.Then,We believe the unique fuel testing capabilities would be valuable in fuel development and will seriously consider the use of the reactor as part of our future program. Any possible US support could not be decided by March 1976. We would need a longer time to develop a program and obtain necessary budget support. Thus a nine month extension of the project would make this feasible whereas a three month extension would not.Whereas earlier the Government had been prepared to consider a nine-month extension, by the time it got back to COREPER they were unable to agree that.
Another American initiative came from Dr. Kramish, the American science counsellor at the Paris Embassy, who maintains close connections with the International Energy Agency. He indicated an interest and suggested that the Americans might be prepared to offer up to $2 million as support for Dragon via the IEA.
Faced with this situation, renewed efforts were made to get the project once again resurrected and brought before the Council of Ministers. They were due to have a meeting on 15th December. At first there was no readiness even to have the matter on the agenda, but, as the hon. Member for Bristol, North-East said, Dr. Pictet eventually persuaded the Germans to put it on the agenda and this was done at a late hour last Friday—
§ The Under-Secretary of State for Energy (Mr. Alex Eadie)
§ Mr. Jenkin
The Under-Secretary shakes his head, but he has much to answer for in this respect. He was the United Kingdom representative at that meeting of the Council of Ministers.
§ Mr. Jenkin
That is a very interesting point. My information was—and I can check this again today—that the matter was on the agenda under "any other business", and was an invitation to the Council of Ministers to take note of the COREPER report. We have been unable to find out, in spite of inquiries to the German Ministry of Technology in Bonn, why the German representative at that meeting left before this item was reached.
The Under-Secretary says that it was not on the agenda in the form I have described it. It must therefore at some stage have been taken off, and we need to know therefore at whose instigation this was done and by whom it was taken off the agenda. What is clear is that at no time did the Under-Secretary make any attempt to have the matter put on the agenda or to raise it at the Council of Ministers.
However, still the matter would not lie down. The European Parliament debated it yesterday on the initiative of my hon. Friend the Member for Dorset, West (Mr. Spicer), some of whose constituents are involved in the work at Winfrith. The European Parliament passed a resolution on the subject and this was dictated to me by phone from Strasbourg this afternoon. It says:Having noted with concern the present intention to close down the Dragon Project by 31.3 1976, requests the Commission to present urgently proposals to the Council which will enable the continuation of the project until 30th September in order to allow for negotiations to take place with a view to ensuring the long-term future of the project.That resolution was accepted without dissent by the European Parliament, although there were some abstentions.
§ Mr. Jenkin
The hon. Member has made a valuable point. The resolution had the support of the Socialist Group, including the Labour Group in the European Parliament. The resolution now stands and the representative of the Commission who was present will undertake 1730 to put it on the agenda for the Council of Ministers at the next meeting. This matter will therefore come back. The United Kingdom will have another opportunity to reconsider its attitude. There is still time to try to get the support which is evident from the Germans, provided it is not sought with the kind of pistol-at-the-head, dead-line attitude which was displayed earlier. There is, too, the chance of getting substantial support from the United States.
That is where the matter stands. At Winfrith the reactor is being closed down and mothballed. The staff are under notice of desecondment, and some will have to be dismissed. Tomorrow, the Germans arrive at Winfrith in order to put forward proposals for the analysis and writing up of the results which have been achieved. The Winfrith staff have worked out a £2 million programme to record the results of experiments in recent years. It does not see how it can ask the Germans to pay more than one-third of this sum, and it would be a double tragedy if as well as the work being called off there were to be no funds for analysing and processing the results for future use.
The Government have been guilty of very serious prevarication and of misleading their colleagues in this matter. They have shifted their ground repeatedly and they have made no effort to try to save the project. Their first ultimatum of 31st March was so brutal and abrupt as to be totally unacceptable. Their second ultimatum of 30th June was unrealistically short and gave no adequate time for the proper negotiation of new terms. During the spring and summer they actually prevented discussion of the matter in the Groupe des Questions Atomiques. The staff at Winfrith have every right to feel angry, disillusioned and let down, and it is not surprising that they have formed the belief that the Government were from the outset determined to kill the project and to scotch every attempt to salvage it.
There is another aspect of the matter. The hon. Member for Bristol, North-East said that the Government were inept in their international relations in connection with this project. One needs to ask how far the final decision of the Germans not to put the matter on the agenda on Monday or, if it was on the agenda, to leave the Council before the 1731 matter was discussed, arose from sheer exasperation of the attitudes of the British Labour Government to the whole energy policy of the Community. They have had to suffer the Foreign Secretary's provocative bravado at Luxembourg, the Prime Minister's acrimonious correspondence with Herr Schmidt, and the row at Rome resulting in the stupid and futile climb-down by British Ministers. They have had to put up with, and they may have had it at present in their minds, with the revealing and shocking statement by the Secretary of State for Energy when he spoke at Bridgwater as reported in The Times last Saturday. He was actually boasting at being responsible for holding up the entire EEC energy policy and he said thatwithout opening old wounds, that pleases me no end.That is a disgraceful and impudent statement of which the Secretary of State and the whole Government should be heartily ashamed. It would not in the least surprise me if it proved to be the last straw for the Germans over the Dragon project.
The whole issue goes further than that, however. This attitude by the Government may be imperilling other joint projects which are on the stocks or which may have the possibility of coming to Britain. There is the Joint European Torus project, which is concerned with very important long-term research into nuclear fusion. That will be a tragedy if it does not go to Culham in the constituency of my hon. Friend the Member for Abingdon (Mr. Neave) where much of the work has been done.
An article in The Times by its distinguished science editor, Pearce Wright, said:Government indecision over continuing to support an international nuclear research group at Winfrith, Dorset, has caused advisers to the EEC to reconsider proposals to build another European laboratory in Britain. The new centre would absorb most of the £250 million to be spent in Europe on fusion research over the next six or seven years.Later, it said:The European Commission's preference for the Italian rather than the British centre has been prompted by the Government attitude over the Dragon project at Winfrith.From whatever point of view this matter is considered—that of the staff at Winfrith, that of the future of high temperature 1732 technology, that of Britain's collaboration with our industrial partners in the Community, or that of long-term nuclear research—the Government's attitudes, and particularly their inaction at critical stages of the negotiations, have been utterly lamentable.
In future years, we shall bitterly regret having thrown away any chances of remaining a direct participator in a technology which, without doubt, has great promise for the future of energy generation. In a week, as the hon. Member reminded us, in which the Government are throwing away £162 million on trying to salvage a company that makes cars that no one wants to buy, they will have a great deal to answer for. I hope that the Under-Secretary will give us some undertaking that even at this last minute the Government will try to resurrect this project and keep it going.
§ 7.31 p.m.
§ The Under-Secretary of State for Energy (Mr. Alex Eadie)
I should like to thank my hon. Friend the Member for Bristol, North-East (Mr. Palmer) for raising this subject. I know from the correspondence that I have received that several hon. Members are concerned about this matter, and on behalf of the Government I welcome the opportunity to clear up any misunderstandings that may have arisen about the nature of the project, its recent history and the Government's attitude to its future.
The right hon. Member for Wanstead and Woodford (Mr. Jenkin) expressed surprise at the way my hon. Friend opened this debate. My hon. Friend spoke constructively, although critically. The right hon. Gentleman was surprised that he did not talk in the same terms as the right hon. Gentleman himself. But the right hon. Gentleman always seems to prefer to support foreign Governments rather than his own. I propose to try to show that it would be better for the nation's interests if he started to speak for Britain for a change, rather than for foreign countries.
The OECD's Dragon project, an experimental high-temperature reactor sited at the United Kingdom Atomic Energy Authority's establishment at Winfrith, has been a successful international venture. Since its inception in 1959, it has been extended five times. The current 1733 agreement between the United Kingdom Atomic Energy Authority, the European Communities, Sweden, Switzerland and Austria expires on 31st March 1976.
As hon. Members are aware, the Government in their White Paper of July 1974 accepted the advice of the NPAB that we would not have the resources for a substantial effort on HTR while we were launching and completing SGHWR and completing the AGRs. But we did ask the nuclear organisations to pursue further the prospects of participation in international development of HTR.
In April this year the Board of Management of the Dragon project proposed that it should be extended for a further five years. Under the present agreement the partners should have reached a decision on any further extension by the end of June. It would not have been appropriate for the United Kingdom to agree to participate in an extension of this length before the completion of the review by the nuclear organisations. But we were even then aware of the risk that exhaustion of funds during the current extension might lead to a premature termination of the project before a decision on a further extension could be reached. It was for this reason that, in April, the United Kingdom Atomic Energy Authority had made it clear that it was ready to bear its share of the costs to prevent closure before 31st March 1976, if the other signatories could do likewise. Unfortunately, this arrangement was not acceptable to the other partners.
Although, as I have said, we were not able by the end of June to finalise our policy on the proposed extension, by September we had completed the necessary consultations with the nuclear industry, the Atomic Energy Authority, the electricity boards and the Trades Union Congress. All agreed that the benefit to the United Kingdom's nuclear programme of the proposed extension would not justify us in continuing to bear the substantial costs which we would incur as the largest single contributor to the project. Accordingly, looked at from the standpoint of our own nuclear reactor policies, the Government were not in favour of a further extension of the project. However, we were conscious of our special position as the host country and did not wish to see the project 1734 brought to an end if the other signatories wished to continue work at Winfrith under a new financial regime.
In the meantime, inflation was causing the project to run out of money. The Board of Management advised that funds would no longer be adequate to run the project until its scheduled completion on 31st March 1976. Indeed, seconded staff would have to return to their parent laboratories from 6th December onwards. They were entitled to three months' notice of this, which meant that issue of desecondment notices could not be postponed beyond 6th September.
During September, my right hon. Friend the Secretary of State for Energy discussed the position with other European Ministers and with the interested Commissioners in Brussels and decided that we should try to give our partners more time to make new arrangements to continue the project if they wished to do so. We therefore informed them on 30th September that we were prepared to provide new money, contributing our present share of the costs to the end of June 1976 if they would do likewise. Because desecondment had to take effect on 6th December if this offer was not accepted, we made it conditional upon acceptance by 30th November.
We received no formal response to this offer, but in course of discussion in Brussels our German partners made a counter-proposal for an extension to 31st December 1976. We did not see the need for the additional six months they proposed. We thought that at least the principles of any new financial arrangements should be clear by the end of March. If nothing were then in prospect, there would still be time to give three months' notice of closure in June. To go on till September before taking a decision, which might have been for closure in December, seemed to us to be unnecessarily prolonging the period of uncertainty for the staff, and the staff must be considered. Nevertheless, we were anxious that no real opportunity for extension should be missed.
§ Mr. Patrick Jenkin
Although I treat with the contempt it deserves the Minister's original imputation against my patriotism, it comes ill from him to say that all this was done in the interests of the staff. Let him go to Winfrith and talk to them to find out what they are saying.
§ Mr. Eadie
I shall retaliate in the way the right hon. Gentleman has done. He continually quoted documents of other countries. He has used every opportunity during this debate to deride the British Government and was quoting the views of foreign Governments to supplement his argument. I was not challenging his patriotism; I was challenging his political judgment. I hope that he will not giggle, because what I am saying to him is perfectly serious. He is a big boy and if he dishes it out it will be given back to him.
§ Mr. Eadie
The right hon. Gentleman is being rather silly because he should know that in political debates if he dishes it out he will be required to take it like someone who is a mature politician.
Accordingly, after discussions in London among my officials, the chairman of the Dragon Board of Management, the chief executive of the Project, and representatives of the Federal Republic of Germany, the Commission and the UKAEA, we put forward a compromise proposal. We agreed to accept the German proposal for a nine-month extension, subject to the condition that if by March 1976 there was no clear prospect of new financial arrangements in view, the termination arrangements should be put in hand. In addition, we asked that if the project continued under a new financial regime this should be made retrospective to 1st April 1976. Both these conditions had been discussed at the London meeting.
All the participants had welcomed them as constructive and believed that they should be acceptable.
1736 We were, therefore, very disappointed to have our proposals rejected when we presented them formally to the Committee of Permanent Representatives in Brussels.
However, the soundings we have taken indicate that none of our partners is prepared to contemplate paying substantially more towards the project than at present, even though some have a very much greater current interest in the high-temperature reactor than has the United Kingdom.
§ Mr. Palmer
Reference has been made to figures. Could we know the extent of the amount involved and just how far they are a burden compared with everything else in the United Kingdom's economy?
§ Mr. Eadie
I have incorporated that information into my speech and I shall come to it.
Nor does the interest expressed by the United States appear to be on a sufficient scale to enable the project to continue We understand that United States' participation, if it could be obtained, would be more likely to take the form of a contract for work than agreement to become a signatory to the Dragon agreement.
I turn now to the financial aspects of the project. The United Kingdom is the largest single contributor to the Dragon project and bears 48 per cent. of the costs. The remainder is shared among the other eight members of the EEC, together with Sweden, Switzerland and Austria.
The total United Kingdom contribution to the project in financial years 1959–60 to 1975–76 has been about £20.7 million. In addition, the UKAEA has provided services costing £25.5million, the whole of which has been recovered as income from the project. To have participated in the five-year extension proposed in April would have cost the United Kingdom a further £13.5 million. It has been put to me that the Dragon yields this country a balance of payments advantage of £1 million a year. This is true but it does not alter the commitment we have to make to the project in staff and resources.
§ Mr. Patrick Jenkin
The hon. Gentleman has said that a figure of £13.5 million would be the cost. Does that assume 1737 any reduction in the British share from its current percentage of 48 per cent? Does it assume any contribution from the Americans, as is indicated in the telegram from ERDA, which I have read to the House?
§ Mr. Eadie
I said that the £13.5 million was based on current considerations but I will check the project and if I am wrong I will write to the right hon. Gentleman.
Hon. Members may like to know that the cost to the United Kingdom of the offer we made in September to allow continuation until 30th June would have been £1.5 million. To go on until December, as we were willing to do subject to the conditions I have mentioned, would have cost us a further £800,000.
§ Mr. Palmer
My hon. Friend must agree that these are not great amounts in terms of public expenditure these days.
§ Mr. Eadie
It is not a question whether I agree. My hon. Friend asked for the figures and the facts and I propose to give them to him. The question of his judgment on facts and figures will no doubt be taken into account.
Hon. Members are understandably concerned about the implications of closure for the staff who have contributed so much to the success of the project over the last 15 years. Many have been seconded to the project by their parent laboratories in the United Kingdom Atomic Energy Authority or overseas, to which they will now return.
The UKAEA has undertaken that there will be no compulsory redundancies of its staff as a result of the closure of the project and will discuss with staff representatives the ways in which their skills and experience can be employed. The right hon. Gentleman is aware that we have already met representatives on this matter.
The UKAEA also assures me that the closure of the project will not jeopardise the future of its Winfrith establishment. I want to emphasise that because it is important. In addition, the project employs around 50 agency staff. They are employed, for example, as draftsmen, calculation assistants and typists. The UKAEA cannot give a categorical assurance about their continued employment. 1738 This is primarily a matter for the contractors as they are agency staff. However, the director of Winfrith has indicated that he will give these agency staff priority in consideration for any vacancies at Winfrith for which they may be suitable. Such vacancies will be limited by the need to reabsorb the Authority staff who have been working with the Dragon project.
I fully appreciate the potential advantages of the HTR, particularly as a source of process heat which might be applied to steelmaking or gasification of coal. But there has been no change in our judgment about our nuclear priorities or about the HTR since last year's White Paper. We cannot afford to do everything. We must recognise that the current status and timescale for commercial development of the HTR in the countries which have the lead has slipped back since then. In particular General Atomic, the Gulf/Shell company with the world lead in HTR, has just bought itself out of the last of its utility contracts in the United States of America.
I have already referred to the considerable achievements of the Dragon project. But we have to recognise that Dragon is an experimental reactor; it is in no sense a prototype and continuing with it would not have given us a commercial capability.
Some fears have been expressed that termination of the Dragon project may affect the views of our partners in the European Communities on the siting of JET or any other Community project in the United Kingdom. Why should this be so? We did not close the Dragon project. [Interruption.]
I turn to answer the right hon. Gentleman direct. I hope he will accept what I say. I attended the meeting of the Council of Ministers, to which he referred. I emphasise that Dragon was not on the agenda, nor was it discussed. We made a very reasonable offer which we believe should have been accepted. It was rejected at ambassador level. The ambassadors had made no recommendation to the Council for discussion on the subject. As I was there, I hope that at least my hon. Friend will accept that what I am saying is a fact.
§ Mr. Patrick Jenkin
Of course, if the hon. Gentleman says that, I accept it, and I recognise that, therefore, the Press and many of the staff at Winfrith were entirely misinformed when they said on Friday that it was on the agenda. I accept what the Minister says.
§ Mr. Eadie
I am grateful to the right hon. Gentleman.
Hon. Members will wish to know the current status of the Dragon. Under the terms of the Dragon agreement the facilities revert to the United Kingdom at zero cost. The reactor has been defuelled and work is being undertaken to leave it in a safe condition. Thereafter, short-term maintenance costs are estimated by the United Kingdom Atomic Energy Authority at about £60,000 per annum. Arrangements for more permanent disposal of the reactor, ancillary plant and buildings and so on, are now being considered. The Authority expects to use some of these for other reactor research and development work, including work on the SGHWR and the fast reactor.
My hon. Friend has performed a very valuable service in initiating this debate because it has given the Government the opportunity to put forward their view. Despite the fact that my hon. Friend made a fair case in his criticisms of the Government, the opportunity has been given to put the Government's point of view. I have described to him what happened at the meeting of Ministers which I attended in Brussels. My hon. Friend raised the question of the fast breeder reactor and Sir Brian Flowers' comment on this subject. I think that my hon. Friend must agree with me that the statement made by Sir Brian Flowers must be considered, but he would also want me to make clear—as I think the right hon. Gentleman, in his intervention, wanted to make clear—that it was not a question of condemnation as such of the fast breeder reactor route, but that what was being suggested was that rather than go commercial there should be consideration of a further prototype, before we developed on the commercial level. 1740 It is necessary to make that point in the debate because many people have shown great interest in nuclear power and the various roads that we should pursue.
My hon. Friend raised the question about a joint constructive Anglo-German approach. I think he will recollect that I did some work on this in order to try to further it. I was responsible earlier—I think it was this year—for a meeting with Herr Matthöfer, a Minister in the German Government. There were discussions in relation to technological collaboration. My hon. Friend has heard me say very often in this House that I am all in favour of technological co-operation throughout the world with partners and allies who wish to participate. I have always argued that it is futile and stupid that we should do work in duplication of one another.
As a matter of fact, at the invitation of Herr Matthöfer I went to West Germany and visited the HTR establishment. I also went down a pit in the Ruhr with him. I think that it was the first time in history that two Ministers had been down a pit in the Ruhr.
My hon. Friend introduced this constructive note in his speech. There is an interesting constructive collaboration between the nations and there have been discussions in relation to it. Therefore, I hope that he will agree that, whatever he may feel about it, there has been no political ineptitude on the part of the Department of Energy, and that we have taken a constructive, realistic decision based on a policy of nuclear power under which we really cannot do everything.
I want to assure my hon. Friend that we are always looking for constructive relationships with other nations to pursue technological collaboration. I should like to hope that, at least during the period in which I am at the Department, I may have the privilege from time to time of coming to the Dispatch Box and intimating to the House that joint technological collaborative arrangements have been made with other friendly countries.
I hope that the House will agree that I have tried as best I could to give a constructive answer to the points made during the debate. On reflection, perhaps right hon. and hon. Members will realise that the Government had a very good case when handling this whole issue.