HC Deb 14 April 1980 vol 982 cc775-80
12. Mr. Hooley

asked the Secretary of State for Energy what action he is proposing to take on the Government's nuclear power programme prior to the receipt of the report of the Central Policy Review Staff on the nuclear power stations at Heysham and Torness.

13. Mr. Palmer

asked the Secretary of State for Energy what steps he is now taking to make possible the announced expansion of the nuclear power programme, in view of the difficult financial position of the Central Electricity Generat- ing Board and the cash limits imposed by Government policy.

18. Mr. Rost

asked the Secretary of State for Energy what progress has been achieved in the implementation of the programme of nuclear power construction since his statement of December 1979.

19. Mr. John Evans

asked the Secretary of State for Energy if he is still committed to the building of the advanced gas-cooled reactors he announced in his statement of 18 December 1979.

Mr. David Howell

As the House knows, the Government have reviewed the proposal to construct new advanced gas-cooled reactor power stations at Heysham and Torness. The generating boards made clear their wish to proceed with the stations, and the Government have decided that this would be right.

The cost of these stations was fully reflected in the public expenditure White Paper—Cmnd. 7841. But in view of the heavy costs of these and other capital projects the Government have urged the CEGB, the SSEB and the other boards to identify economies wherever possible.

Work is in hand on all the measures announced in my statement of 18 December, which provides a framework for the development of the nuclear programme.

Mr. Hooley

Since it has taken 16 years to produce 1½ gigawatts of generating capacity in the present AGR programme, is it not ridiculous to suppose that the Government's new programme is in any way practicable? In the light of the fall in demand for electricity, will not the Government be lumbering the country not simply with one white elephant, but with a whole herd of white elephants?

Mr. Howell

The hon. Gentleman is wrong. It is generally recognised that while we are not planning a crash programme—a massive programme of nuclear generation capacity increase—we are proposing a steady programme over the coming years which will build up our electricity generation from nuclear sources to a reasonable percentage. Even then, as my hon. Friend the Under-Secretary said in reply to an earlier question, the amount of electricity generated from nuclear power which Britain will have by the year 2000 on the plans which I announced before Christmas, will be less than that which will be available to the French and the Germans in 1985. Since nuclear-generated electricity, on all present experience costs less, the consumer will be the loser if we do not build nuclear.

Several Hon. Members


Mr. Speaker

Order. I propose to call first those hon. Members whose questions are being answered.

Mr. Palmer

Does the Secretary of State agree that in practical terms there is a clash between the expansion of the nuclear power programme and the cash limits that the Government are imposing on the electricity supply industry? Is it not a fact that the Cabinet hoped to get out of the dilemma by getting the Central Policy Review Staff to make a decision in favour of postponement until the pressurised water reactor was ready? Will the Secretary of State deny those rumours, if they are rumours?

Mr. Howell

They are rumours. There is no conflict between the cash limit restraints on the electricity industry and the decision to go ahead with the building of these stations. As I have already said, the Government decided that that would be right, and the cost of those stations is fully reflected in the public expenditure White Paper. It makes sense to go ahead with building nuclear power stations and the available technology at present is the advanced gas-cooled reactor. I have explained to the House that it is the Government's objective that we move towards seeking to build a pressurised water reactor in due course. In the meantime we have the opportunity to build nuclear; that is what the boards are to do and they will keep within their cash limits in doing so.

Mr. Rost

Taking into account the huge escalation in costs and the delayed time scale, as well as the unsatisfactory performance of the existing AGR programme, how will the Government monitor the new construction programmes so that they keep within even the unacceptably high costs, and the proposed time scale of six years per station?

Mr. Howell

It has been widely recognised that there is a need to strengthen the nuclear construction capacity. For that reason I announced before Christmas the Government's plans to reorganise the NNC, and to strengthen it to meet the demands which will fall upon it from building nuclear power stations in the coming years. My hon. Friend is correct in saying that the performance has not been good in the past. It is essential that the industry is reorganised, that confidence is given by a steady programme, and that the different roles of the customer and the supplier are clearly defined. Within that broad set of arrangements we can go forward with more economic and efficient building, with tighter control on costs.

Mr. Evans

Will the Secretary of State concede that doubt and indecision at Government level in general, and within the Department of Energy in particular, have bedevilled the nuclear industry over the years? Does his announcement mean that the industry can now get on with the job without any further interference from the Prime Minister?

Mr. Howell

My announcement today confirms what the Government also made clear before Chirstmas. We are setitng out a basic programme around which the industry can organise with confidence. No one in the industry expects any such programmes, stretching ahead over many years, to be completely free from uncertainties and questions as time goes on. The pace must be influenced by resource availability and demand. The fundamental point is that we now have the basic programme to give the industry confidence.

Mr. Costain

Will the Secretary of State take an early opportunity to visit Dungeness B? Will he further explain that the long building programme was due to the experimental work that was carried out? Is he aware that there is an extremely good team working at Dungeness B, whose experience should be used for future stations?

Mr. Howell

I am grateful to my hon. Friend for his invitation. Despite the unwelcome delays, there is a prospect that these stations will produce electricity highly competitively and economically. That is an indication of the strong economic benefit from nuclear electricity—which is cheaper. Even where there are considerable delays and difficulties, the cheaper quality of that electricity is maintained.

Mr. Mike Thomas

How can the right hon. Gentleman expect the nuclear industry and the power plant industry to work when an order is placed one month, and before the month is out the "Think Tank" reviews it, the Prime Minister protests about it, the Treasury argues about it, and his right hon. Friends leak stories to the press about it? How can any industry be organised—Conservative Members are supposed to know about such matters—on that basis? Further, how can the industry operate on the basis of steady ordering when everyone knows that an order scheduled for completion in 1982 will not be completed before 1984–85?

Mr. Howell

The Labour Party and the previous Labour Government know all about uncertainty and change of direction on nuclear power and nuclear ordering. If the hon. Gentleman had a little grace and courtesy he would recognise that there has been a great improvement and that we now have the basis for a steady ordering programme, and for the revival of the British nuclear industry. He should congratulate my right hon. and hon. Friends on that, and he should think back to the poorer performance of his party.

Mr. Skeet

Surely the Secretary of State is aware that the existing AGRs are difficult to complete, and are extremely expensive. Would it not be wiser to cut the Gordian knot and go straight to the PWR now, which is much cheaper than the AGR?

Mr. Howell

As my hon. Friend will know, Hinkley B compares favourably with fossil fuel stations, taking all the factors into account. My hon. Friend talks of cutting Gordian knots. The reality is that we have the capacity, technology and opportunity to build AGR stations. I have stated the objective that we should seek to build a PWR, but safety considerations are paramount and there must first be a full and thorough inquiry, which takes time. In the meantime, the CEGB and SSEB should continue building nuclear so that we are not left so far behind our continental competitors in cheap nuclear electricity.

Dr. Owen

Will the right hon. Gentleman accept that I welcome his decision, without which the industry would not have the steady ordering programme that is vital if it is to be viable throughout the next decade and beyond? Has the right hon. Gentleman yet decided on the choice for the important appointment of chairman, over which the delay has been too long?

Any power programme must reflect demand. Can the right hon. Gentleman give us an idea about future energy demand, particularly for electricity? Is a fall in demand anticipated, which would result in the building programme being cut back? For example, does the right hon. Gentleman still hold to the belief that he can sustain a building programme of one nuclear station a year, as announced in December?

Mr. Howell

I am grateful for the right hon. Gentleman's welcome for what I have said. I intend to make a statement about the chairmanship and the new chairman of the NNC shortly. Recent electricity supply industry estimates of demand have been revised downwards to a growth rate of just under 1 per cent. My announcement of nuclear power building before Christmas was based on at least the possibility of an overall energy demand growth of 1 per cent. and an electricity demand growth of less than 1 per cent. On demand grounds alone my announcement before Christmas is still valid. In addition, there is an economic case for building nuclear power stations. The increasing evidence is that electricity from nuclear power is considerably cheaper than from oil—or coal-fired stations, even on present prices, let alone with possible price trends in a dangerous world. Reading the newspapers one is daily aware of the growing threats to oil and gas supplies. There is an urgent need for us to diversify our energy resources, and it makes sense to build nuclear.

Mr. Speaker

Order. Questions are becoming lengthy and answers longer still.