DRAX B POWER STATION

HC Deb 21 April 1977 vol 930 cc366-73

Mr. Tom King

(by Private Notice) asked the Secretary of State for Energy whether he will make a statement on the refusal of the Chairman of the CEGB to order the Drax B power station as requested by the Secretary of State.

The Secretary of State for Energy (Mr. Anthony Wedgwood Benn)

As the House knows, the Government are consulting a wide range of interests, including the CEGB, about the need for a steady home ordering programme for power stations and the role of Drax B within it. I have already met the CEGB and am inviting it to see me again next week.

Mr. King

Will the Secretary of State confirm that it is the unanimous view not just of Sir Arthur Hawkins but of the whole board of the CEGB and of the Electricity Council and Mr. Francis Tombs that this order should not be proceeded with by the electricity industry without compensation from the Government? Will he further confirm that it is the statutory duty of the CEGB to provide the most economic supply of electricity and that the Secretary of State's request was tantamount to an invitation to breach its statutory responsibility?

Is this not the worst example of the kind of private directive that the right hon. Gentleman has been so keen to deplore on previous occasions? Will it not be much more satisfactory, if the Government wish to pursue this policy and the Secretary of State wishes to support it, for the right hon. Gentleman to bring it openly before the House so that the House can see the costs involved, the matter can be properly debated here, and the Government can receive authorisation for the finance if they can persuade the House, instead of the Secretary of State attempting to get the cost of his policies surreptitiously through the electricity industry by means of a concealed surcharge on every electricity consumer in the country?

Mr. Benn

The hon. Gentleman has got it a bit wrong. In 1969 in the House of Commons the Minister of State at the Ministry of Technology, the present Chancellor of the Duchy of Lancaster, made this statement: My right hon. Friend"— that was myself— has just approved proposals from the Central Electricity Generating Board for the next power stations to be ordered. They will be Heysham and Sizewell B, both nuclear AGRs: Drax B, which will be coal-fired: and Isle of Grain, which will be oil-fired. It will thus be seen that Drax B is firmly in the programme."—[Official Report, 29th October 1969; Vol. 790, c. 303.] This was in 1969, at the request of the CEGB. The hon. Gentleman should be absolutely clear about this. The Government are now engaged in discussion with the CEGB about what the future power station programme should be on the basis that there is a need for a steady ordering programme.

The previous Government gave an advanced order for Ince B power station, with which the House is familiar. I am not announcing a decision on Drax B today. What has happened, as the House knows well, is that my correspondence with Sir Arthur Hawkins has become public. I make no complaint about that. In the course of these discussions, I have met the Electricity Council, the CEGB and all the interests concerned on the energy side, and my right hon. Friend the Secretary of State for Industry has met all those on the industrial side. The Government will make a statement, and Parliament will have an opportunity of considering it when the Government view is clearer. But I do not think that the hon. Gentleman should read into my consultations with those concerned the dictatorial intent that he suggests in his supplementary question.

Dr. Edmund Marshall

May I congratulate my right hon. Friend on the stand he is taking on this issue? In his negotiations, will he bear in mind the importance of this power station contract for construction jobs in the locality, where such employment is greatly needed?

Mr. Benn

I shall certainly consider the employment implications, not only from the point of view of those in the industry but because it would be a tragedy if the Central Electricity Generating Board were to find, through a faulty ordering programme, that there was no home industry upon which to base its own future power station ordering. That is in the interests of electricity consumers as much as of those who work in the power industry

Mr. Hannam

The right hon. Gentleman has mentioned the 1971 Ince B order which was brought forward by the then Conservative Government. Will he confirm that on that occasion compensation was paid by the Government to the Central Electricity Generating Board? Why is he now trying to clobber the electricity consumer for what is a direct employment subsidy to the power construction industry?

Mr. Benn

I do not accept—and my letter was intended to ascertain whether the CEGB could justify its claim—that an order for Drax B would involve extra cost for the electricity consumer. The Government have never accepted the highly inflated estimates that were given.

I should also tell the House—I said it to the CEGB—that the CEGB was ready to accept a steam generating heavy-water reactor, which was due for ordering last September, without any compensation whatsoever. We asked the CEGB to look at Drax B in line with our general examination of the future of that industry. Members of the CEGB themselves, in a meeting with me, admitted that using coal from Selby would be absolutely the cheapest option for power generation from any fuel at this moment.

I think that the House would be well advised not to read any final decision into a publicised exchange between myself and the chairman. I would also warn the House not to believe every inflated estimate that the CEGB has seen fit to give to the Press, because the reports are not correct.

Mr. Mike Thomas

My right hon. Friend will know that I support his position on the Drax B power station. Will he take this opportunity to repudiate the suggestion, which is entirely contrary to assurances given to me and to the trade unions involved, that the Government now want a straight takeover of C. A. Parsons in my constituency by GEC?

Mr. Benn

My hon. Friend should put that question to my right hon. Friend the Secretary of State for Industry. I am involved in the negotiations with energy interests in this matter, but the leading Minister on the future of the industry is my right hon. Friend the Secretary of State for Industry, and I think it only right that he should deal with that question.

Mr. Kimball

The right hon. Gentleman has admitted that one of the arguments for Drax B is to use the coal from the Selby field. Would it not be sensible to wait until the National Coal Board has finished its assessment of the reserves that there may be in the Vale of Till in North Lincolnshire, when there would be a much better case for the West Burton B power station at Gainsborough, using the Vale of Till coal, rather than the Drax B power station?

Mr. Benn

I am grateful to the hon. Gentleman for confirming what all those here and in the United States now agree, namely, that there is a much bigger rôle for coal and coal-fired power stations than was accepted by the conventional wisdom all over the world a few years ago. But there is nothing whatever contradictory in our view that there must be a domestic heavy electrical industry to build power stations for the potential development that will come from an expanded investment in our coal industry and the need to burn that coal economically to generate electricity economically for the consumer.

Mr. Alexander Wilson

Will my right hon. Friend accept that he would do better if we were to accept the miners' side and announce that Drax B should be started and that it should be coal fired? Should we not recognise that the British economy depends entirely on the miners of this country and give them due preference in the society to which they belong?

Mr. Benn

My hon. Friend's view and the view of the National Union of Mineworkers have been forcefully put before the Government. My right hon. Friend and I met a delegation at which that view was put. It was also put very strongly by the TUC Fuel and Power Committee. But I want to reiterate what I said a moment ago, that the CEGB members themselves have recognised in discussions that Drax B with Selby coal would represent the cheapest option for power stations in this country.

Several Hon. Members

rose—

Mr. Speaker

I propose to call two more hon. Members from each side. I have allowed seven supplementary questions already on a Private Notice Question.

Mr. Rost

Do not this dispute and other important energy policy decisions and options emphasise the rôle that could be played by a properly established energy commission giving important independent advice free from institutional pressure groups and ministerial arm-twisting?

Mr. Benn

As the House knows, I am very much in favour of an energy commission to advise on matters of this kind. The magnitude of the capital investment involved and of the decisions and interests concerned—which are not mean interests; they are major interests, consumer interests, industrial interests and so on—means that the ultimate responsibility must rest with Ministers accountable to the House of Commons. But I am in favour of and have been developing the energy commission concept, and I hope to be able to make a statement about that before very long. I agree with the hon. Gentleman in that sense.

Mr. Hoyle

Would not my right hon. Friend agree that the attitude of the CEGB, which has meant a hold-up of any announcement on this project, could lead to unemployment in the power generating industry, both in the North-East and in Scotland where unemployment is already very high? Does he not further agree that we do not want any further delay?

Mr. Benn

I appreciate the anxiety expressed by my hon. Friend and others about delay. On the other hand, I think that the House recognises that the task we have set ourselves of trying to find a consistent ordering programme that will provide security for a strong domestic industry is a very big project and cannot be undertaken overnight. Consultations are going forward with great urgency on this matter.

Mr. Biffen

Does not this whole incident indicate the unsatisfactory nature of the relationship between Ministers and nationalised industries? Can the right hon. Gentleman say whether he feels that his position would be reinforced by powers of specific direction? If his answer is "Yes", would he not conclude that there is an imperative need for the implementation of the Plowden recommendations on the reorganisation of the electricity industry, which could encompass precisely these points?

Mr. Benn

I do not think that relations are soured by a candid exchange between Ministers and the chairmen of nationalised industries. What I think is undesirable—[Interruption.] I believe that most sincerely. What is undesirable is arm-twisting that never reaches the light of day. But if there is an exchange, I make no complaint whatsoever that that exchange—one of many—has come into the public domain.

What is true in some nationalised industries, and notably the British National Oil Corporation, is that there is a power of specific direction. I believe that the chairmen of nationalised industries and Ministers of all parties would appreciate an institutionalising of the position, which is that in the end the Government of the day must be able to achieve their policy objectives. At the moment the arrangements are not ideal but they are not damaged by a candid exchange between chairmen and Ministers.

Mr. Palmer

Putting aside all personalities and the opportunism of the Opposition, would not my right hon. Friend agree that the point of view of the electricity supply industry—which is the point of view of the electricity supply trade unions—that the cost of Drax B should be borne jointly by the Government and by the industry, is not unreasonable?

Mr. Benn

That is the point to which, in my most recent consultations with the CEGB, my questioning was directed. My hon. Friend knows very well that I have discussed with the TUC Fuel and Power Committee, the Electricity Council and many others the point that for a claim for compensation to stand it has to be firmly established that it is justifiable. It must not be just a way of getting money from the Exchequer. We have also to act in the interests of the consumer to establish a viable domestic industry sustained by a reasonable, phased, long-term ordering programme.

These are the matters that we are exploring in public, and I do not object to that. But were the electricity consumers to be asked to pay a special price, that argument would be a valid one for the CEGB to put to the Government.

Several Hon. Members

rose

Mr. Speaker

Business Question. Mrs. Thatcher

Mr. Mellish

On a point of order, Mr. Speaker. It so happens—I do not know whether it is within your knowledge, Mr. Speaker—that I have in my constituency the largest firm in the whole of England associated with power generating plant. I have been trying very hard to put a relevant question to my right hon. Friend. For reasons which I do not understand I have been completely ignored and I just want to put it on record that I am fed up.

Mr. Speaker

Order. It may be that I should put something on the record as well. Privy Councillorship—if that is what the right hon. Member for Bermondsey (Mr. Mellish) has in mind—does not count during Question Time, and the right hon. Gentleman must take his place with other Members of the House.

Mr. Mellish

It has nothing to do with Privy Councillorship. I am in the same category as you, Mr. Speaker. I am no different from any other Member of this House. Let that be understood. But against that, Mr. Speaker, an hon. Member is justified in feeling aggrieved about this when he has in his constituency one of the largest firms in the whole of the country associated with the problem we have been discussing.

Mr. Speaker

I understand the right hon. Gentleman's feeling, but I am quite sure that it is shared by other hon. Members who also have particular interests. I am very conscious that a number of hon. Members representing mining areas would have liked to be called. But I allowed 11 supplementary questions on a Private Notice Question, which I think is not unreasonable.

Mr. Kelley

On a point of order, Mr. Speaker. Is my right hon. Friend aware that there is a possibility—

Mr. Speaker

Is the hon. Gentleman raising a point of order with me? He cannot ask his right hon. Friend the question now.

Mr. Kelley

Are you aware, Mr. Speaker, that there is a possibility that the City of London will be very concerned to learn of the discussion that has taken place here about the takeover of certain concerns affected by the electrical generation industry?

Mr. Speaker

Order. I fear that the hon. Gentleman is trying to use a point of order to get in his question, and that would be unfair to the right hon. Member for Bermondsey, who failed to put his question.

Mr. Buchan

As you know, Mr. Speaker, I rarely raise points of order, especially as I unfortunately resigned before I became a Privy Councillor. I recognise your difficulty in relation to supplementary questions. I have been particularly aware of it from half-past two, as a matter of fact, and I have not been called. But I am much more aware of it on this issue. I should have thought that, in view of my raising of the issue of Drax B throughout the past year, and because my constituency involvement concerns 5,000 people whose livelihood tomorrow depends upon it, you would have known me sufficiently, Mr. Speaker, to call upon me to make this point.

Mr. Speaker

Order. Obviously whoever is in the Chair does his best to be fair, and the hon. Gentleman must realise that I allowed a fair time and called as representative a number of hon. Members as I could. As a postcript, I might say that I hear only from those hon. Members who are not called. I never hear from those who are.