HC Deb 16 November 1981 vol 13 cc103-14

Ordered,

That, at this day's sitting, the Nuclear Industry (Finance) Bill may be proceeded with, though opposed, until any hour. [Mr. Lang.]

Question again proposed, That the Bill be now read a Second time.

Mr. Penhaligon

A Division at this time would have enabled me to write a longer speech. I had not expected to be called so early.

A source of energy that I would submit is cheaper than any mentioned by the hon. Member for Bedford or myself is a substantial and massive Government-inspired conservation programme. It is just as good to save energy as to produce it. A number of suggestions have been made showing that it may be possible to save energy more cheaply than any currently conceived method of generating that power. These issues deserve discussion on a motion in the House. The Government should table a motion justifying their current PWR programme. Arguments could be made for it and against it.

There are a number of questions on this long and complicated Bill—it is in fact almost the shortest that I have ever seen—to which I would appreciate an answer. The Minister refused to give way to me when he was speaking but, fortunately, the question that I wished to put has since been pursued. I wish to know how dependent is the programme of British Nuclear Fuels on the future PWR programme. The Minister replied that it was not dependent at all. That was clear, and understood by the House. It is an extremely interesting point. Will the Minister therefore inform the House how much more money he expects BNFL will require to deal with reprocessing that building a substantial string of PWRs will require? I would like more clarification of the way in which BNFL expects to finance and deal with the considerable extra generating of materials required for that series of installations.

There has been reference to the Government guarantee. One can raise money for anything if one is given a Government guarantee. I suspect that if someone were to give a Government guarantee for building a papier maché bridge from my constituency to New York it would not be all that difficult to go to the market and raise the money. The fact that the company has always been able to raise money against a Government guarantee does not in reality sound surprising. Why is it necessary to give this Government, guarantee if the Government believe that a particular business is financially profitable? I do not know what the truth is. I find the Government reasons given for offering a guarantee against this substantial sum rather inadequate.

Mr. John Major (Huntingdonshire)

One point is that BNFL will get a far better rate for the money if there is a Government guarantee behind it.

Mr. Penhaligon

Of course BNFL will, but again I suspect that that goes for nearly any project. The point was made about the public sector borrowing requirement. If it is all right to raise money for this nationalised industry using a Government guarantee, why cannot we use the same method to raise money for a series of nationalised industries? We could thereby solve the PSBR problem at a stroke. We could raise money for virtually every Government investment programme currently in being. We might be able to achieve a more sensible economic strategy by the single mechanism of raising future money for investment by State corporations from a Government guarantee as opposed to it counting against the PSBR. I do not see why some are put into one category and others are put into another. I hope that we shall hear more details about why the Government have decided to give the guarantee for this industry.

Let me make the point, in passing, that the industry is nationalised. I am rather pleased about that. My Liberal colleagues and I have supported the Government on the denationalisation of a significant number of industries in the past two and a half years. The only one on which we opposed the Government concerned the Radiochemical Centre. I opposed that. Similarly, we Liberals would oppose the denationalisation of this industry, but even more vigorously because this one is even more sensitive. The Government would severely sap the existing public confidence in the nuclear industry if it were seen to become a plaything of the competitive world. On the whole, I am in favour of the private ownership of companies and enterprises. I see no reason why the Government should be involved in freight, and so on. But in this area the Government would encounter serious opposition from quarters far beyond those who hold Clause Four to them as some tablet given from on high, scores of years ago. They would have opposition from a far broader base if they introduced the possibility of denationalising this company.

The last topic en which I touch is a substantial one, and I make no apology for doing so. It is an attempt to discover from the Government how far we have gone on the waste disposal programme. I served on the Committee which considered the 1977 Bill. It was revealed during those proceedings that about £43 million of the money being raised, lent or guaranteed at that time was for a vitrification—or, as I prefer to call it, a "glassification"'—programme.

How far have we got? Are we capable of glassifying the waste from nuclear power stations? Can we do it on a substantial scale? Do the Government expect to glassify the waste that they have already? Do they expect to embark on a programme of glassifying that material in the near future? In other words, what has been done with the last £43 million? I gather that another £200 million is to be devoted to the problem. It will be interesting to know what progress was made with the last £43 million. If we have not beaten the problem yet—we are now in the thirtieth year of trying to find a solution and to convince ourselves that we have a waste disposal programme for some of the by-products of nuclear generation—why do the Government believe that we ever shall?

Recently I had an exchange of correspondence with the Minister of State in the course of which I asked what was the Government's programme for the disposal of nuclear waste. The Minister appeared to say that there was no fixed programme, that a number of investigations were going on, and that they hoped by 1990 to issue a paper outlining the various options available for the disposal of nuclear waste. That will be nearly 40 years on, but all that the Government hope to do is to produce a paper outlining various options for waste disposal.

I am an engineer by training. I recognise that there are substantial problems in this area. There are arguments to be made for putting off the final disposal of waste because it tends to become simpler to handle as time passes. But for all that, 40 years have passed since the first waste was produced and we still do not have even a blueprint for waste disposal—not even one for examination—let alone testing to discover whether, in the final analysis, it is credible. What progress has been made since the debates on this subject in 1977 on glassification and waste disposal?

Will the Government now indicate their policy with regard to the treatment and disposal of waste created by treating other people's nuclear materials? Reference has been made to the amount of business obtained from Japan. I believe that it is hoped that there will be some business from Brazil. We understand that that material will come to Britain, that the useful materials will be taken out of it, and that it will be recycled. What will happen to the various waste materials and by-products of that process? Are we to keep them in Britain? Who will be keeping Japan's rubbish or Brazil's rubbish? Will those countries have it back, or have the British Government agreed to keep it here?

Mr. Mellor

Rather than save my comments for my winding-up speech, I feel that I ought to intervene at this point in the hon. Gentleman's speech. Before he makes his sweeping observations he should study these matters with a little more care than he obviously does. He should know that since 1976 every contract signed by BNFL with overseas countries has involved a crucial clause to the effect that the waste, once reprocessed, shall be taken back. That is covered by an exchange of notes at Government level. Before the hon. Gentleman continues in the disgraceful way in which he has done tonight he should study the facts and not waste the time of the House.

Mr. Penhaligon

How much material has come to Britain for reprocessing and how much has been returned?

Mr. Mellor

If the hon. Gentleman asks the question in the proper form he will get the information. However, his almost pathetic ignorance of the basis on which the company that we are debating conducts its business is almost contemptuous of the House.

Mr. Penhaligon

The Minister could not even answer the basic question of how much of this material has been returned, yet he claims to have great knowledge of the way in which this company carries out its business. I leave the House to make its own judgment. I suspect that the Bill will have a Committee stage. Given the shortness of the Bill, that will give us a rather limited opportunity to return to this point.

The Minister spoke about contempt of the House. The Minister's Government are planning to spend the sum of £15,000 million, and not one second of this Parliament's time has been given to discussing that sum. The Minister wants to build 10 PWRs, all over the country, and not a second of the time of the House has been spent in giving approval to that announcement.

Mr. Mellor

Has the hon. Gentleman read the White Paper? It does not say anything about a commitment to build all those power stations. It says that if a public inquiry permits the construction of one PWR we shall see what the requirements then are, and if necessary we shall build another, and so on. There is no commitment to a sweeping programme of 10 stations all at one go. Once again I must tell the hon. Gentleman to read the basic material before going on in the way that he does.

Mr. Penhaligon

The Minister knows that the w hole energy scenario of the present Government is based on the hope or, perhaps, the assumption—I do not put words in the Government's mouth—that in the end we shall be able to build this number of reactors. The sum involved in building them has been specifically mentioned. It has been specifically brought to the House, at least in one statement about it. The Minister cannot pretend that this decision has not been made. If the public inquiry should have the unlikely result of the PWR being condemned as unsafe—I do not believe that many hon. Members believe that that is the conclusion that will be reached—no doubt the Government would rethink the matter and we would go down another path. But there is no denying the fact that the Government have announced the programme, and no doubt they will stick to it.

Mr. Hooley

What the Minister said is a contradiction of what was recently announced. The hon. Member for Truro (Mr. Penhaligon) is quite right, because the original announcement was that we were to have a massive 10 gigawatt programme costing £25 billion or so. The Government are now back-tracking on that, just as the French back-tracked on their programme.

Mr. Penhaligon

I thought that the costs were originally rather less than £25 billion, but what are £8 billion or £10 billion between friends, especially if the point has been made in order to help me?

I hope to have a detailed reply from the Minister about the progress that has been made on waste disposal. I should also like to know why the company has been given a guarantee when such guarantees are not given to other nationalised industries. If the debate were to produce answers only to those two questions we would be able to go away a little happier and a little wiser than we came. With regard to the macro-economic effect, the Minister would appear to have hit upon a solution to the PSBR problem, if only it could be applied to the financing of the rest of our nationalised industries.

10.16 pm
Mr. Barry Jones (Flint, East)

There has been a brief reference from time to time during the debate to BNFL at Capenhurst. I should like to put to the House the very serious concern and worry of 500 employees of BNFL at Capenhurst about their employment next year. It is intended that 500 or more men and women should lose their jobs. Of that number, about 100 are from my constituency. I have received some very worried letters from 50 or 60 constituents asking me what I can do to help them.

The House may know that in my constituency we have very serious rates of unemployment. In the Deeside travel-to-work area the unemployment rate is now bordering on 18 per cent., and in the town of Flint male unemployment has reached 40 per cent.

Some of my constituents who have written to me or come to see me it my surgery first lost their jobs in the textile industry and then in the steel industry. Now they are to lose their jobs at Capenhurst.

I ask the Minister to give some reassurance that there will be no more than the proposed 500 redundancies at Capenhurst. I also ask him to consider whether it is necessary for the proposed redundancies to take place. Finally, will he consider enabling me to bring a group of men who are likely to lose their jobs to see him in order to discuss the matter?

10.17 pm
Mr. Mellor

With the leave of the House, Mr. Deputy Speaker, I should like to reply.

This has been art interesting debate, although it would be right to say that some contributions have been more interesting than others. I hope that the House will excuse me if I am unable to refer to every point that has been raised. I have to keep one eye on the clock, but I shall try to deal with as many as I can.

I thank the hon. Member for Merthyr Tydfil (Mr. Rowlands) for accepting the Bill. I had hoped that he would do so, because the Bill marks a continuation of a bipartisan policy of offering guarantees to the company. He may recall that when the statutory instrument to increase the borrowing to £500 million was considered by the Committee in March the right hon. Member for Leeds, South (Mr. Rees) called for such a Bill as the one that we are bringing forward today, so I am grateful to the hon. Gentleman for accenting it.

I am anxious not to get involved in party controversy with the hon. Gentleman about the PSBR, but it is right to say that the company has not been within the PSBR at any time in its life. Its life has continued throughout the period of this Government, the Labour Government and the previous Conservative Government. What is within the public sector borrowing requirement is a matter for the Treasury, but Governments of both parties have managed to run the economy with the company remaining outside the public sector borrowing requirement.

The hon. Member for Merthyr Tydfil was unfair to my hon. Friend the Minister on the subject of the gas-gathering pipeline. I should point out to my hon. Friend the Member for Bedford (Mr. Skeet) that successive Governments decided that there was a need for a guarantee because of the particular nature of the industry. Potential political problems are involved in the nuclear power industry. From their standpoint—we do not agree with them—many hon. Members reasonably believe that we should not have a civil nuclear power programme. Obviously, those who lend money will take such points into account. By the same token, Britain has the most rigorous safety standards and it would be wrong of anyone to think that we would ever rule out the possibility that a nuclear plant would have to be closed temporarily or completely. Such risks make this type of operation different. That is why a guarantee is needed.

My hon. Friend the Member for Huntingdonshire (Mr. Major) always makes pertinent observations. He said that it was right that BNFL should not be prejudiced in its borrowing and have to pay a high rate for money because of its particular situation, when it does work of great national and international significance. In that spirit, I commend the matter to the House. The situation is different from that of the gas-gathering pipeline The Government contend that, just as North Sea oil has been brought ashore by separate pipelines from separate fields, gas can be brought ashore. Therefore, there is no comparison to be drawn.

The hon. Member for Merthyr Tydfil said that there was something fishy about the way in which a statutory instrument had been accepted which transferred shares to my right hon. Friend the Secretary of State, but he will know that the power to do that was contained in the 1971 Act, which survived the previous Labour Government. BNFL has grown to such a size that under successive Governments the Secretary of State for Energy's proper influence has been exercised on a day-to-day basis. It is right to recognise—as the original draftsmen always thought would be done—the reality of the intimate relationship between the Department and BNFL. Therefore, it it right that the Secretary of State should he the principal shareholder.

Mr. Skeet

I understand the Minister's position, but the company was with the Atomic Energy Authority for many years and could have been left there. Were not the shares handed over to the Secretary of State so that he could dispose of them? Is that not part of the privatisation arrangement?

Mr. Mellor

That is not the reason that my right hon. Friend the Secretary of State would give for the measure. There is no present intention to invite the public to subscribe for any shares in BNFL. I avoid the pejorative term "selling off', because in other fields we are inviting subscriptions for shares and there is nothing disreputable about that. In that context, the idea of selling off does not apply.

Mr. Robert Maclennan (Caithness and Sutherland)

Why did the Minister say that there was no "present intention"? Does he mean that the matter is under consideration?

Mr. Mellor

There is no present intention to invite the public to subscribe for shares. The hon. Gentleman knows that "no present intention" means that, as I stand here now, there is no intention of doing so. There are plenty of hon. Members who say "Never", meaning "Not today", although one cannot rely on the fact that they do not merely mean "Not this morning". I am saying that there is no present intention, but it would be wrong to rule out such an intention in future. I do not say anything that does so. I am interested to note that the hosts of the Social Democratic Party are quick to leap to their feet on the old trick of defending nationalised industries.

Mr. Rowlands

I understand what the words "present intention" mean. Can the Under-Secretary of State make it clear that the transfer of shares to the Department of Energy was not meant to clear the decks or prepare the way for such privatisation?

Mr. Mellor

I have given the hon. Gentleman the reason for that. The enthusiasm of my hon. Friend the Member for Bedford for privatisation is entirely acceptable to me, but that was not the motive for bringing forward the statutory instrument. It is possible, had a Labour Government been returned in 1979, that they would have felt it proper to take the steps that we did. After all, that legislation was acceptable to the previous Government. I do not believe that it is a central issue on privatisation.

I turn to what has been said about the PWR. I stress to the House, as I did to the hon. Member for Truro (Mr. Penhaligon), that there is no present intention for a huge expansion in a PWR building programme. We are committed to a wide-ranging public inquiry. The right hon. Member for Norwich, North (Mr. Ennals) is not at present in his place, but he asked me about the CEGB. He can read the answer in Hansard. The CEGB will be publishing a report on the safety aspects of the PWR in plenty of time for the inquiry. We shall look at the results of the inquiry. Even if the decision is to go ahead with the PWR, each power station project will be considered on its merits.

The question of safety has been very much under consideration, and one or two things have been said that may give a false impression. I must emphasise that during nearly 20 years of commercial operation of nuclear power stations in Britain no accident has occurred that has given rise to significant public hazard. That is because successive Governments and the nuclear industry have attached paramount importance to safety from the earliest days of nuclear power. We intend to maintain that excellent record. Not many enterprises, public or private, have the enviable safety record of our nuclear industry. I believe that that proposition would command the support of most hon. Members.

The hon. Member for West Lothian (Mr. Dalyell), who is intimately concerned with those matters, asked me two specific questions. I can assist him briefly with those. If there are other matters on which he would like clarification I shall respond to any letter that he may write. He asked first of all about the Khan affair. As he will know, there was an investigation into that breach of security by the Dutch Government. A report will be made to the Dutch Parliament, which we shall obtain. I shall ensure that the hon. Member knows about it as soon as we do. I can assure him that as a result of the Khan affair the three partners reviewed security arrangements, as it was only right that they should.

The hon. Gentleman also asked how much money was devoted to BNFL's vitrification programme, and on what time scale. A total of £220 million, at best estimate, will be spent on the programme over the next 10 years. Design work is proceeding and construction will commence within the next two years. Again, if the hon. Gentleman requires further information I can assist him.

I say to the hon. Member for Flint, East (Mr. Jones), who mentioned redundancies, that of course I shall meet him and anyone else that he wishes. The main factor in the recent redundancies at Capenhurst is that it is a diffusion plant. It is old, and no longer economic. The company has done its best to minimise redundancies by natural wastage and transferring workers to the centrifuge project, which is an update of the process being carried out in the hon. Gentleman's constituency. However, that has been difficult because the slack enrichment market has slowed down the expansion of the centrifuge capacity and natural wastage has been at a minimum.

Most work on a Ministry of Defence project for naval fuel using the centrifuge has been deferred. I point out to the hon. Gentleman that the intimate connection of that plant with the defence industries is typical of many factories in Britain that may suffer if some of the cuts in defence that are promised by certain hon. and right hon. Members of the Opposition are ever effected.

The hon. Member for Truro spoke as though he had had no opportunity to speak on the subject in the House. However, this is the third time this year that he has entertained the House with his prejudices about nuclear power. In his introduction to one speech he said: I must confess that when I see a Bill with the words 'atomic energy' written across the top I am likely to be against it."—[Official Report, 10 February 1981; Vol. 998, c. 763.] I am glad to see proof of the unprejudiced way in which members of the Alliance approach the crucial matter of nuclear power.

The hon. Gentleman said that there was no chance to vote against the measure. He is welcome to divide the House tonight. He has voted twice with the Labour Party on previous occasions when nuclear matters have been discussed this year. I do not wish to inhibit him from doing so a third time.

The hon. Member for Truro raised a constituency point. He referred to the Cornish site investigation. Under section 35 of the Electricity Act the CEGB has power to survey land for possible sites for future stations. If a site is suitable the CEGB has to submit an application for consent to the Secretary of State for Energy, who would order a public inquiry before making his decision. He has to hold a public inquiry if the local planning authority objects to the application. Successive Governments have accepted that such a procedure is a proper exercise in a sophisticated society. I regret that the hon. Gentleman chose to make cavalier remarks about public inquiries as if to suggest that the whole procedure was a confidence trick. That is disgraceful. I hope that no other hon. Members will associate themselves with that suggestion.

Mr. John Golding (Newcastle-under-Lyme)

If the hon. Member for Truro (Mr. Penhaligon) wishes to divide the House, he has the hon. Member for Caithness and Sutherland (Mr. Maclennan) to stand with him.

Mr. Mellor

I am glad that the hon. Member for Newcastle-under-Lyme (Mr. Golding) has raised that matter. The hon. Member for Caithness and Sutherland (Mr. Maclennan) knows too much about atomic power to have much truck with what the hon. Member for Truro says, because Dounreay is in his constituency. He knows of the great safety record and achievement of the nuclear industry. He is also on record as favouring the fast breeder reactor. A great alliance dominates British politics. I wonder how the views of the hon. Members for Truro and Caithness and Sutherland equate.

Mr. Maclennan

I can say with confidence that the fast breeder reactor programme would enjoy much greater favour if there were an alliance in Government than if the right hon. Member for Bristol, South-East (Mr. Benn) were by some misfortune ever again to have charge of our nuclear affairs.

Mr. Mellor

To say that an alliance is better than an Administration presided over by the right hon. Member for Bristol, South-East (Mr. Benn) is no commendation in a sensible discussion. We are talking about a choice between this Government and the threat posed by the Alliance. The hon. Member for Truro is the energy spokesman for the Alliance. The Liberal Party has fascinating views on atomic energy. Its members were once in the lunatic position that while they supported the use of nuclear power for military mean: they opposed its use for civil means. They decided to rectify that, not by common sense and approving nuclear power for civil use, but by coming out in favour of disarmament at their last conference. They went further. It was said at the conference that all atomic power stations should be shut.

I do not know whether the hon. Member for Truro reads Liberal News. it is not my regular bedtime reading, but I was fascinated to read a letter by a man who lives in Leiston—a fascinating place to live in relation to nuclear policy. He said that the cost to the CEGB of shutting down existing nuclear power stations would be £250 million in extra fuel charges and that by the year 1990 this would rise to £1 billion at current day values. He said that he had no intention of going to the electorate with such a policy but was anxious to learn what others would do. He went on to say that if the party was not to be accused of irresponsibility—that is passing resolutions in the full knowledge that they will not be implemented—it must answer the questions. I give way to the hon. Member for Truro in the hope that he will answer them.

Mr. Penhaligon

We all have problems with our parties if they are given real and meaningful motions to discuss—a temptation that the Conservative Party never allows to its members.

I am the Liberal spokesman on energy and I have never argued in the House in favour of the closing down of existing nuclear power stations. There are disagreements between the Liberal Party and the SDP, but I have no doubt that the tremendous good will between the parties will allow those differences to be resolved.

The Minister has still not answered my question. When has the House had the opportunity to discuss, on a Government motion, our current programme of building nuclear power stations? The Minister knows that we have had no such opportunity.

Mr. Mellor

The hon. Member knows that there is a Select Committee report on the matter, and it will be debated in the House in due course. I will not be deflected on to that aspect. The hon. Gentleman apparently favours elderly nuclear power stations continuing in use, but he opposes the construction of new power stations, which could be built with the advantages of modern technology. What a lunatic policy!

In commending the Bill I stress that BNFL is a world leader and an important employer in the North-West, employing about 16,000 people. If the expansion programme goes forward it will provide additional, safe employment in an industry of the future.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).