HC Deb 23 November 1987 vol 123 cc4-5
4. Mr. Nicholas Brown

To ask the Secretary of State for Energy if he will make a statement on the timing of the orders for two coal-fired power stations.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer)

The timing of orders for new power stations is a matter for the Central Electricity Generating Board. Applications to build these stations have not yet been submitted. Each application will be considered on its merits when it is received.

Mr. Brown

Is it true that heads of agreement have already been signed between the board and private consortia for the purchase of non-nuclear power stations? Do the Government intend to build the two new coal-fired power stations with private capital?

Mr. Spicer

I am not aware of anything having been done along the lines suggested by the hon. Gentleman in the first part of his question.

As for the second part of his question, the Government always welcome the involvement of private capital.

Mr. Andy Stewart

As Nottinghamshire already has a site for a new coal-fired power station, and as it produces the cheapest coal in Britain, will my hon. Friend tell the House that he will guarantee that the CEGB will place the first of the two coal-fired power stations in Nottinghamshire?

Mr. Spicer

As my right hon. Friend has a duty to take a judicial view about applications when they are made, I cannot anticipate the exact details of what will come forward and what our reaction will be to them.

Mr. Clelland

Is the Secretary of State aware that the lack of investment in coal mines, which obviously has something to do with the question of new power stations — [Interruption.] New power stations will need coal, and it is the lack of investment in coal mines that has led to the proposed closure of Huwood Engineering in Gateshead, with the loss of 600 jobs. What does the Minister intend to do about the critical situation that is facing Huwood in Gateshead, which makes nonsense of the Government's so-called concern about unemployment and industrial growth?

Mr. Spicer

As the Government are allowing £2 million a working day to be invested in the coal mining industry, I imagine that is one of the reasons why the Opposition did not want to debate that issue on Friday last.

Mr. Holt

When my hon. Friend considers the proposition, will he recognise that it is not necessary to build the power stations near coal mines? They should be built at ports such as Teesside, so that the imported coal, which is so much cheaper, will provide cheaper electricity at the seaside.

Mr. Spicer

As my hon. Friend is aware, the current level of imports is very low. We have every confidence that a fully competitive British coal industry will be able to supply a very large part of the future industrial demands of the electricity industry.

Mr. Skinner

Will the Minister guarantee that the Government will ensure as far as possible that the two new coal-fired power stations will use British deep-mined coal? If there is a problem about the price, perhaps he can use the formula that assists the farming industry, which is subsidised to the tune of £11.50 a week for every family in Britain. If we did that, we would have the cheapest coal in the world.

Mr. Spicer

The Government are doing everything in their power to encourage the development of a highly profitable British coal industry. If that is successful, British coal will dominate the coal industry in this country. I only hope that the hon. Gentleman will support us in our effort to get a thoroughly competitive British coal industry.

Mr. Rost

My hon. Friend said that he would consider projects on their merits. Did he mean by that that the CEGB will be expected to raise money at commercial rates of interest, and to produce a commercial rate of return, just as he expects the private sector to do when it has to compete with the CEGB?

Mr. Spicer

The public sector is required to make rates of return on new investment of at least 5 per cent. That is the position in the public sector.

Mr. Eadie

Does the Minister agree that the power plant industry would welcome any expedition in the building of power stations? What about the publicity regarding Fawley, which, we understand, is to have a super design to cater for foreign coal imports? Are the Government backing a signal that British miners, despite the praise that they receive for further Herculean efforts in increasing coal production, are about to be betrayed once again?

Mr. Spicer

The Government have not even received the application for Fawley, and therefore it is impossible for me to give the hon. Gentleman any idea of the Government's reaction. The CEGB has said that it will produce proposals, and it will do that in its own time. We will have to take a view on the matter once the CEGB has produced its proposals.