HC Deb 31 July 1978 vol 955 cc5-10
2. Mr. Nicholas Winterton

asked the Secretary of State for Energy whether he has any firm evidence indicating that it might be possible to increase the proportion of coal burned at power stations in the United Kingdom without directly or indirectly passing on higher costs to the public.

3. Mr. Patrick McNair-Wilson

asked the Secretary of State for Energy if he is satisfied with the current level of coal-burn by power stations.

7. Mr. Palmer

asked the Secretary of State for Energy if he will make a statement on his proposals to alter the merit order of power stations in favour of more coalburning; and what conversations he has had with the trade unions in the electricity supply industry on the matter.

13. Mr. Rooker

asked the Secretary of State for Energy if he will make a statement on the current position of coal stocks at power stations.

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

Stock levels at power stations and at pithead are high and could increase further. In order to make the greatest possible use of our indigenous resources, I have put in hand with the National Coal Board and the Central Electricity Generating Board an urgent examination of the potential for burning additional quantities of coal in power stations to displace imported oil and coal. The study, which is still continuing, is being conducted on the basis that there would be no additional cost to the electricity consumer.

Mr. Winterton

I thank the Secretary of State for that relatively full reply, but does not the observation of the chairman of the Central Electricity Generating Board that the significant price advantage that coal has over oil has largely withered away indicate that the right hon. Gentleman's policy of trying to make power stations more dependent upon coal rather than on cheaper forms of energy is both unfortunate and wrong? Will he agree that his policy will result, or is likely to result, in an increase of electricity prices next years of some 11 per cent.?

Mr. Benn

No, I reject that, as I made clear in my answer, but the House should appreciate that in the context of energy policy the fuelburn must be a matter for national consideration. On a number of occasions the Central Electricity Generating Board has urged me to tax gas, and I have taken the view that that is not a sensible course for us to pursue. The board accepts that we shall not permit gas-fired power stations to be built. That has been accepted. What does not make sense is to stock coal at home and import it from abroad and to import oil from abroad at a balance of payments cost when coal, which is an indigenous source of energy, is available to us. I believe that this can be done without imposing any increase of prices for the electricity consumer, and I hope that my studies will show that to be so.

Mr. McNair-Wilson

Since many of the coal industries in western Europe are now facing difficulties, largely because of the fall-off in demand for blast furnace coke, what help can we expect from the EEC towards solving what I believe will be a temporary problem since this industry will be utterly central to our economic thinking in 10 years' time?

Mr. Benn

I agree with the last part of that supplementary question: coal is the one resource which we can rely on for 300 years or more, and it would be lunatic to close pits in order to permit imports of coal and oil which may temporarily appear to be cheaper but which will not be available to us. As regards western Europe, the House should know that each individual German miner is subsidised by the German Government to the extent of £6,700 a year. Our coal is £10 a tonne cheaper than any other coal in Europe, and ours is much the most efficient mining industry. It would be absurd for me to put it at risk in pursuit of short-term market fluctuations which may well not persist.

Mr. Palmer

But will not my right hon. Friend agree that it is a serious matter to take a positive step by political decision to lower the efficiency of our electricity supply system? In fact, it is a sin against the light. Has my right hon. Friend taken into account that the electricity supply trade unions are very doubtful about the wisdom of this step, and will he consult them first?

Mr. Benn

When I discussed the matter in the context of the situation in south Wales, the electricity trade unions were present. As my hon. Friend knows, the unions in the TUC fuel and power committee, under the chairmanship of Frank Chapple, have been urging upon the Government for a long time an integrated national energy policy looking long term. This is the inevitable consquence of looking long term—that one does not set at risk secure supplies of fuel in pursuit of short-term market interests. Nor have I ever known the electricity unions to fail to draw to my attention the economic disadvantage which they suffer vis-a-vis gas—my hon. Friend has made that point—and I think that energy policy must be made by a Minister answerable to Parliament. That is the view which I take.

Mr. Rooker

Notwithstanding the concerted attack by Tory backwoodsmen on the mining industry today at Question Time, will my right hon. Friend give a guarantee for the future of Britain's coal industry and give an assurance that there will not be any more oil-fired power stations built while we have this massive quantity of indigenous coal still under our soil?

Mr. Benn

I am happy to respond to my hon. Friend's supplementary question in this way. I am in favour of using indigenous supplies of fuel, and that applies not only to coal but to our nuclear programme for which we have a considerable indigenous capacity. As the House will know, I have recently told the Central Electricity Generating Board that I am not prepared to authorise the Inswork Point oil-fired power station, and I believe that that, too, is a sensible decision in the light of all the factors which I have described.

Mr. Skeet

Is the Secretary of State aware that a nuclear power station will produce energy—electricity—at 62 per cent. of the cost of coal? Would it not therefore be wiser to have a nuclear power station near Plymouth? Further, is the right hon. Gentleman aware that he has no statutory power to compel the CEGB to consume more coal? He has not got clause 2(2) and clause 9(2) of the draft Bill passed by the House.

Mr. Benn

I appreciate that, but at the same time I have responsibilities placed upon me by statute to co-ordinate the nation's energy policies, and I have to do the best I can in the circumstances which confront me. The hon. Gentleman will know that the Government announced in April that, in their view, the power of specific directive ought to be available—

Mr. Skeet

The Minister has not got it.

Mr. Benn

—subject to proper parliamentary approval. The hon. Gentleman might notice that nuclear power depends upon uranium, and last week the European Commission prevented me from signing an agreement with the Australian Government to buy uranium. I have to take account of a number of factors in considering the future availability of supplies.

Mr. Ioan Evans

Will my right hon. Friend take it that his policy will be welcomed not only in south Wales but in all mining areas, and he should pursue his objective of getting an integrated energy policy? Does he accept that, although great profits are now being made by all the energy industries—gas, electricity and coal—there ought to be a long-term policy recognising, as he said, that there is at least 300 years' supply of coal, probably more, available to us?

Mr. Benn

Obviously, I agree with my hon. Friend, but from the questions put from the Opposition Benches it would appear that the lessons of 1973 have been forgotten and Conservative Members are really advocating pit closures, which would put us at the mercy of vast increases in the prices of imported oil or imported coal to which we should then be subject.

Mr. Tom King

Does not the right hon. Gentleman appreciate that the real threat of pit closures comes from his Government who have been so slow in recognising the problem which they now face? In the light of the productivity scheme, which was bound to give rise to this concern about higher stocks and the problem of coalburn, why has he been so slow and only now begun to consider the problem? Does he maintain, as he did in "Coal for the Future", that the crucial factor for the coal industry is to maintain the cutting edge of its competitiveness if it is to have a real future in this country, which can be so important for us?

Mr. Benn

The hon. Gentleman is quite wrong. The mining industry, like all the fuel industries, including electricity, has been badly hit by the economic recession and temporarily the various price differentials have been subject to fluctuations. But it is confidently expected that there may well be an oil price increase of 10 per cent., and the truth is that his party's policy is meaningful only in terms of a pit closure programme. That, in effect, is what the hon. Gentleman is suggesting, although he has not the courage to say it openly.

Mr. Winterton

In view of the Secreretary of State's totally unsatisfactory reply, I beg to give notice that I shall try to raise this important matter on the Adjournment at the earliest possible moment.