BRITISH NATIONAL NUCLEAR CORPORATION

HC Deb 05 April 1989 vol 150 cc260-310

`A Crown Company, the British National Nuclear Corporation, shall be formed in which the power stations of the United Kingdom will vest on a date to be appointed by the Secretary of State.'.—-[Sir Trevor Skeet.]

Brought up, and read the First time.

Sir Trevor Skeet (Bedfordshire, North)

I beg to move, That the clause be read a Second time.

Madam Deputy Speaker

With this, it will be convenient to consider the following: New clause 10—The British Nuclear Company— '(1) The Secretary of State shall direct the generating hoard to place all its property, rights and liabilities relating to nuclear power in a company designated as the British Nuclear Company. (2) The British Nuclear Company and all its property, rights and liabilities shall remain wholly owned by the Crown.'. New clause 16—Nuclear levy— `(1) It shall be the duty of the Director to publish annually and distribute to each of the Consumer Committees, a report showing the difference in that year between the price of electricity generated from fossil and non-fossil fuel. (2) The Consumer Committees shall have a duty to publish the findings of the Director's report in a manner and form that may be easily understood by electricity consumers.'. Amendment No. 148, in clause 30, page 24, line 13, leave out subsection (1) and insert— `(1) The public electricity suppliers shall take steps to ensure that the mix of fuel sources and generation technologies available to them is adequate to ensure the long term security of supply to their customers. (2) The Director and the Secretary of State shall have powers to require, from time to time, that the pubic electricity suppliers demonstrate to them that their policies in fulfilment of subsection (1) above are adequately contributing to the long term security of supply.'. Amendment No. 147, in clause 30, page 24, line 14. after 'suppliers', insert `and appropriate consumers' bodies including the consumer committees and independent consumer organisations.' Government amendments Nos. 31 to 34.

Amendment No. 160, in clause 61, page 45, line 8, at beginning insert `save for the nuclear power stations for which the Secretary of State shall make proper and reasonable provision for retention in public ownership.'.

8 pm

Sir Trevor Skeet

I make it clear that all the power stations dealt with in the new clause are nuclear. Being well disposed to the nuclear industry, I am disturbed that steps are now being taken to unsettle the industry. My experience has been that, for a good many years, particularly in respect of the nuclear waste repository which was scheduled for an area near my constituency, the public have not been ready for a transfer of nuclear assets to the private sector. The public have not had sufficient time or are reluctant to accept the risks inherent in nuclear power, particularly if it is outside the public sector. A Crown company could provide a high-quality assurance to a nervous public who still look to the state for the protection of the environment. I am certain that, in time, that attitude will change and that the nuclear sector will be fully privatised.

It is rather odd that the Opposition and myself will probably vote in the same Lobby tonight, but for entirely different reasons. I am pro-nuclear and Opposition Members are anti-nuclear and pro-coal. It is the irony of history that men of different persuasion must be honest and put forward the arguments. I propose to advance to the Secretary of State the arguments about why a serious mistake is being made in this Bill.

I pay tribute to the Secretary of State for being here tonight. After all, he has many obligations. Important personalities are in the United Kingdom at the moment, and he could be enjoying an important dinner elsewhere.

My first argument is that much of the industry will remain with the state following the passage of the Bill. The production of nuclear electricity and the fuel cycle that is dependent upon it, including the reprocessing and recycling of plutonium and uranium and the disposal of nuclear waste, should properly be retained in a single integrated company. I agree that that is not the CBI's view. At the moment, the whole industry is in the hands of the state and, subject to the passing of the Bill, the United Kingdom Atomic Energy Authority and British Nuclear Fuels plc will remain so. My simple argument is that we should keep all relevant parts of the industry together. It is logical and it makes commercial sense to do so.

Secondly, many of the obligations to the nuclear industry—for example, those in schedule 12 and civil third liability—remain with the state. The obligations arising under clause 90 and schedule 12, comprising subsidies from the revenue for nuclear storage, reprocessing, waste disposal and decommissioning, should be monitored and scrutinised within the state system until the regulatory authority establishes its competence. It is an entirely new body, and we have no idea of how it will behave or perform. Further, third party civil liability for serious accidents remains the responsibility of the Government. Due to its extent, that liability is virtually unassignable to the private sector. The extent of liability remains covered by the Paris and Brussels supplementary conventions, which are multinational agreements.

The House should recognise that the nuclear option is also expensive for a private company. For example, I refer to construction overruns. The 450 MW Dungeness B took about 18 years to complete and had a load factor of barely I per cent., compared with the average of Magnox stations of 79.7 per cent. Hartlepool took 19 years to complete, and Heysham I took 17 years to complete. It is possible that construction overruns for contemporary stations will be reduced if not eliminated. I am glad to say that the work of some of the more recent AGRs has been praiseworthy.

Planning inquiries are diabolically expensive—the Sizewell inquiry cost £20 million—but we can reduce it to £10 million apiece if the planning process can be simplified or rationalised. I stress that there is an increasing burden of BNFL reprocessing charges. They are escalating fast, well beyond the provisions made in schedule 12.

Another point which the House should bear in mind is that on-going research and development is an essential ingredient of modern technology, and limited expenditure or economising tend to be counter-productive.

Energy remains a long-term strategy. The risks of a change in technology are enormous. It is unlikely that the market will provide the necessary investment in the formative and unprofitable stages. That is at least the lesson to be derived from the development of nuclear power in France. With the eventual rundown of fossilised fuels, fission or fusion will probably become inevitable, and Her Majesty's Government should now be in a position to direct it, as a long-term strategy, undisturbed by short-term considerations.

Technology for the production of electricity may change dramatically in coming years, with extensive penalties for obsolescence, particularly in conventional thermal nuclear power. The fusion route, via the Torus model at Culham in Oxfordshire, could be abandoned in favour of the simpler Fleischmann-Pons process, using palladium electrodes at normal temperatures. It is certainly premature to make any judgment of that.

I emphasise to the Secretary of State that a more sympathetic approach towards the potential of the fast reactor for recycling reprocessed products and depleted uranium could substantially advance the energy yield of a given quantity of uranium. The THORP plant of BNFL makes sense only if it produces uranium and plutonium for recycling as fuels in fast reactors. It is regrettable that much of the research on that has been deferred or handed over to other nations to continue. Further research into magnetohydrodynamics could be valuable as a technology for converting thermal energy directly into electricity, thus avoiding the use of turbines.

The state cannot afford to be out of the race for the development of cheap fuels and, as we are in a technological sector—that is the nuclear industry—I maintain that it should be in state hands.

The nuclear element could seriously embarrass the flotation. The flotation of National Power could be jeopardised by the nuclear element unless funds and guarantees are lavished on the company to eliminate risk. Those, of course, could be repudiated by a Labour Government making the company's position intolerable. For example, should the regulatory system be altered—as happened in the United States in the late 1970s—and the utility is obliged to absorb costs that would normally flow through to the consumer, all orders for nuclear power stations could cease to be economic. We recognise that at some time there will be a change of Government. Heaven forbid that that occurs on the next occasion or the occasion after that, but we live in a democracy.

I suggest to the Minister that the retention of the nuclear industry in a company with a franchise to operate granted to National Power could enable a package of nuclear assets to be assembled—within, say, a decade of flotation, when many of the major problems would have been overcome—and then a subsequent disposal arranged. In other words, it would be possible to segregate out of the present Bill the nuclear industry or the nuclear power complex and defer privatisation to a later date. I am not against its eventual privatisation.

I would further draw to the Secretary of State's attention to the fact that the obligation to build an additional four PWRs of more than 1,000 MW each could embarrass National Power subsequently. Although National Power is being mandated to build four additional PWR power stations of 1,175 MW capacity each, the trend is for the construction of smaller conventional plant and smaller nuclear power stations of 300 MW. The use of the safe integral reactor devised by the UKAEA, Rolls-Royce, Stone and Webster and Combustion Engineering is probably much the best illustration.

It is an interesting speculation whether the £6 billion programme upon which the Government now insist by building Sizewell B and C, Hinkley Point in Somerset and Wylfa in Anglesey could he abandoned if later National Power were to challenge the programme on economic grounds.

There is also a serious risk to the nuclear industry. New technology apart, Britain cannot afford a gradual rundown of the nuclear industry in the United Kingdom due to inaction, economic erosion or short-term energy market considerations. The price of fossil fuels will inevitably rise reversing the competition cycle. I say that because the coal lobby is having a great success at present because coal prices are low compared to what they were 10 or 15 years ago. That situation is likely to alter dramatically. In that case, all the tribute would go back to the nuclear side. There are also certain matters concerning carbon dioxide and sulphur dioxide that could cause nuclear power stations to he favoured.

8.15 pm

I will give an illustration of a lesson to be learnt from Sweden that appeared in the Financial Times on Thursday 22 February of this year. It said: Sweden faces the prospect of a doubling in the cost of its energy production as a result of the planned phasing-out of its nuclear power programme from 1995". That is according to the country's state power authority's own estimates. That is rather significant. One cannot afford to ignore the possibility of that sort of thing happening.

The obligation for the generator to supply under earlier Acts is replaced by a series of contractual arrangements administered by the Director General of Electricity Supply, who in turn will monitor clause 30—that is the quota of non-fossil fuel electricity—and clause 31 on fossil fuel levy. The retention of a nuclear interest in a Crown company could facilitate and simplify those arrangements and more easily regulate the size of the nuclear industry.

I suggest to the Secretary of State that he bears this in mind. I understand that competition is the essence of the Bill under clause 3(1)(c) and that a broader basis of competition is now required. That could be effected with the emergence of at least three competing companies—National Power, PowerGen and British Nuclear. That development would not have to await the fruits of a decade of growth within the private sector.

Nuclear power could furnish the surplus capacity required to operate the privatised system. Both the Secretary of State and the director general are obliged under clause 3(1)(a) to keep the lights burning, which in turn implies the provision of significant reserve capacity to deal with shortfalls in electricity supply. Privatisation will require a much broader margin of capacity to operate the system than in a closely integrated structure. In the United States of America the figure is 33 per cent., in West Germany 50 per cent., and in Japan 49 per cent., as compared with about 20 per cent. in the United Kingdom. A Crown company would enable the Secretary of State to give a specific direction well in advance of likely shortages enabling the company and/or the nuclear industry to act as a "swing producer" for the system. The trouble with the contractual arrangements is that, although they may be subsequently litigated in the courts, they cannot guarantee immediate replacement or response, and a serious interruption in supply could occur. The citizens of New York have had some experience of that in recent years when their lights were extinguished.

It will be fairly obvious that to give a specific direction to any operator will be difficult under the Bill. Clauses 32 and 89 will take time to implement.

Mr. Ashton

It is clause 88, actually.

Sir Trevor Skeet

It is not clause 88, but clause 89. I shall correct the hon. Gentleman, who did not consider the Bill in Committee and therefore would not be expected to know very much about it.

Both clauses 32 and 89 will take time to administer and there may be procedural problems.

I do not want to take up too much of the House's time, but I must say that the idea of segregating the nuclear industry, temporarily at least, and keeping it in the state sector may appear to be an extraordinary idea to this side of the House, but there is a reason behind it.

Mr. Salmond

The hon. Gentleman should not bring his remarks to a close too quickly because the Opposition are an attentive audience. I hope that the hon. Gentleman will explain the relevance of his amendment to the Scottish nuclear industry, because he has spoken about the assets that will go the National Power. The hon. Gentleman correctly surmised at the start of his remarks that I am anopponent of the nuclear industry, but I recognise that technically the SSEB has a better track record than the CEGB. It is important for the hon. Gentleman to address his remarks and the relevance of his amendment to the Scottish nuclear assets.

Sir Trevor Skeet

I am obliged for that intervention, but the hon. Gentleman can make his own speech and I will make mine. The system prevailing in Scotland is rather different. How one approaches this matter rests on a question of understanding and judgment.

The CBI is thinking along exactly the same lines as myself as it has suggested that nuclear power stations should remain in state hands. The CBI and Opposition Members may have special motives for saying that—we all have different motives—but we are all searching for the truth. Some Labour Members cannot see the truth, but we are trying to prevent the Government from going straight ahead for the rocks and making problems for themselves. The Back-Bench Member can stand well back from the mountain and appreciate its height. Perhaps the Secretary of State, who is standing under the mountain, is in its shadow and cannot appreciate the height of the edifice. Therefore, it is up to us to point out some of the difficulties involved.

Because nuclear power was included in the Bill, probably against the advice of some of my right hon. Friend's advisers, clauses 30 and 31 had to be introduced. They are hardly in line with market conditions, but one must attempt to reconcile the irreconcilable. Perhaps the Secretary of State has done that. Perhaps he has been able to box the compass in every way and achieve his purpose.

The success of Governments lies in the support that they command at a given time. Provided that they get their legislation through, it is years before the mistakes are noted. If the Conservative party is in power in the future, it will say that an error was made now which certain Back-Bench Members tried to avoid. On the other hand, if the Labour party is in power, it will move from crisis to crisis. It will be faced with so many crises to surmount, that it will be unable to establish the conditions that preceded those crises.

Mr. Ian Bruce (Dorset, South)

Does my hon. Friend accept that the CEGB—or Big G as it will be known—will ring-fence the nuclear industry, which will use the support of the main board and its experience? Therefore, to a certain extent, we shall have a separate nuclear industry. I have discussed this with the deputy energy Minister of the Soviet Union who is currently visiting this country. He told me that the people in the Soviet Union are extremely unhappy that the manufacture of nuclear energy and its regulation are all one and the same rather than those functions being separate. It is far better for the Government to regulate and for someone else to manufacture the power.

Sir Trevor Skeet

Our system is such that if one gets rid of a nationalised industry—I am glad about that because I support privatisation—one puts in its place regulations galore. There are so many regulations that an industry can hardly move.

Obviously things will settle down in future, but one must decide whether to have a plethora of agreements, negotiated between companies, or a national system with a small focal point. I prefer the agreement system, which I have witnessed operating abroad. We must be careful of some of the arguments advanced by my hon. Friend the Member for Dorset, South (Mr. Bruce). Simply because the CEGB will ring-fence the nuclear industry does not mean that the industry will rid itself of liabilities. Such liabilities will be passed down, virtually into perpetuity.

When the nuclear industry experiences some of the additional costs passed on from British Nuclear Fuels from reprocessing and when, in the next 100 years, it encounters problems as a result of decommissioning—such problems are not apparent yet—it will be a good thing for it to be ring-fenced. Ultimately, however, the nuclear industry will remain responsible for the liabilities that may have been created. At a later stage those controlling the industry may have to go to the Government to say that the financial assistance laid down in schedule 12 is not great enough and that it must be increased by a separate Bill. Almost every year we have seen that happen with the coal industry as its borrowing power has increased. Exactly the same may happen with the nuclear industry, and we may end up giving it a vast subsidy to prevent it from going under. I am not suggesting that that will happen because the management is good and it will do its best.

As we pass through this period of great uncertainty, I would be much happier if we left the nuclear industry in the hands of the state. When we begin to understand and solve some of the problems, we will be able to go ahead and privatise and, on that occasion, the public will be behind us.

Mr. Tony Blair (Sedgefield)

I congratulate the hon. Member for Bedfordshire, North (Sir T. Skeet) on moving his new clause. When he described the purpose of his clause as protecting the long-term future of energy policy he unerringly put his finger not only on the weakness of this part of the proposal, but on the entire privatisation proposal.

Our amendment No. 160 is similar to new clause 3 as it seeks to take the nuclear industry out of the privatisation process. New clause 16 would oblige the director to publish the details of the difference between fossil and non-fossil fuels. Our other amendments relate to diversity of supply.

Surely when we debate the privatisation of the nuclear industry we debate the most remarkable and inconsistent element of the Bill. The nuclear industry will be privatised, but be subject to no competition. It will be sent to market without market forces. The consumer will be under an obligation to buy a fixed amount of electricity from nuclear sources and, for the privilege of being shackled in that way, pay an additional special tax on his bill. This is not so much privatisation as a rather crude form of economic gerrymandering. The privatisation of the nuclear industry is the achilles heel of the Bill because only a Government whose mind was so gripped by doctrine that they had completely banished common sense could contemplate as hare-brained a scheme as the one that they are entering into now.

Mr. Mans

rose—

Mr. Blair

I shall give way in a moment.

The Government's insistence on the privatisation of nuclear power has dictated the terms of the privatisation throughout. It has been the driving factor behind the privatisation proposals. The proposed structure of the industry means that we will have Big G and Little G—70 per cent. of power stations in one company. The Secretary of State admitted to the Select Committee that that proposed structure resulted from the proposal to privatise nuclear power.

The Bill contains a special nuclear quota designed to protect the nuclear industry from competitive pressures because it cannot cope with the market as it is. There will be a special levy or tax on consumers to pay for the new generation of nuclear power stations that private investors will not undertake. When it comes to the decommissioning of existing nuclear power stations the taxpayer will be asked to underwrite the risk of existing nuclear power stations even though the profit from the industry has passed into the private sector. In short we have all the disadvantages of the private sector without even the one benefit it can offer from market forces.

As a result of our debate on new clause 3 and associated new clauses and amendments, we appreciate the dilemma in which the Secretary of State has got himself—it is a fairly incompetent position in which he finds himself. As he attempts to tell investors that the nuclear industry is an industry that can be sold, he offends consumers, but, as he attempts to placate consumers, angry that the industry is being sold with them guaranteeing the risk, he of course offends investors. For that reason there is a contradiction written into the Bill between the idea of privatisation and the reality of the special ring fence to be built around nuclear power.

We know—not from a leak that emanated involuntarily from the CEGB but from one that appeared in the Financial Times last November that seems to come directly from the CEGB rather than indirectly as did some of later leaks—that Mr. Baker now believes that the new PWR programme cannot be justified unless the costs are underwritten by the consumer. Similar statements were made by Mr. Miller in relation to the Scottish nuclear industry. Since the Government have introduced a nuclear quota, stipulating that a certain amount of power should be bought from nuclear sources, and since only National Power—at least in England and Wales—can build new nuclear stations—the Government have left themselves in a position where National Power can demand that the costs should be underwritten by the consumer. In the provisions that they have introduced, the Government have effectively acceded to that request.

8.30 pm

On report, we are now hearing about the idea of a nuclear tax to pay for the additional costs of nuclear power—in particular, for the new generation of nuclear power stations. My hon. Friends will remember that that tax was at first denied by the Secretary of State. Then we were told that it had existed all along. Finally, in Committee, we received an admission from the Minister that, at present, it amounts to about £500 million a year, which is about 10 per cent. extra on consumers' bills. Even if all went well, it would be down to only 3.5 per cent. or 4 per cent. on consumers' bills by the end of the century.

The Secretary of State must answer the following question. Once this levy has been introduced, once the new generation of PWRs starts to be built by the privatised industry, what will happen if, contrary to the hopes of Ministers, the costs of nuclear power are greater even than the 10 per cent. extra that they now place on consumers' bills? Is there any limit on the levy or tax that will be paid?

The answer is, of course, that there is no limit at all. As a result of the structure introduced by the Secretary of State, we will be obliged to pay this nuclear tax, or levy, irrespective of what it adds to consumers' bills. Although at one stage in the proceedings, he attempted to suggest that the position would be reviewed by the turn of the century and perhaps then the levy could be taken off, it is difficult to see that happening when the levy exists in order to build a new generation of power stations that will exist well into the next century. The Secretary of State has locked us into a system whereby we have effectively given an open-ended commitment to fund a new generation of nuclear power stations without any ability to subject that commitment to the consumers' considerations.

Mr. Mans

Does the hon. Gentleman agree that, as we discussed in Committee, the so-called, possible nuclear levy exists largely to cope with ongoing costs of existing nuclear reactors which will be there regardless of whether the nuclear industry is in the public or private sector? If he is suggesting that existing nuclear power stations should be shut down, the cost to the consumer would be greater rather than less.

Mr. Blair

We shall hear from the Secretary of State whether the nuclear levy is there to pay for existing nuclear power stations. I have a different recollection of our Committee proceedings. The question was put time and again to Ministers about whether the levy covered new nuclear power stations that he wants the industry to build. The Secretary of State will tell us—and no doubt the hon. Member for Wyre (Mr. Mans) will listen carefully—if it does not cover existing stations. I believe that the tax exists to fund the new nuclear PWRs.

We have learnt from the Hinkley inquiry that once privatisation takes effect, the key element on cost for this new generation of nuclear stations will be the rate of return on capital required by the private sector. The London Business School puts that figure at about 11 per cent., which is wildly uncompetitive with conventional fired stations. The evidence given to the Hinkley inquiry, which was not particularly contradicted even by the electricity board, was that once the generation of four stations which the Government want are up and running, that would add anything from £400 million to £800 million to people's bills.

Is it not fascinating to reflect on the distinction between the Government's case as presented at Sizewell and that presented at Hinkley. The world has finally been stood on its head at Hinkley. Rather than the building of new nuclear power stations being the justification of the nuclear quota, the Central Electricity Generating Board's evidence at Hinkley shows that the nuclear quota is now the justification for building the power station. The prime motive behind the building of Hinkley power station is said to be because they have introduced a quota system.

The question which the Government must answer—I know that my hon. Friend the Member for Midlothian (Mr. Eadie) has raised it—is why the nuclear industry should be singled out for special legislative protection. Why does that industry stand alone to ensure that the Government's beliefs are realised? In addition, the proceeds of sale will be reduced as a result of the inclusion of the nuclear industry—that is probably where the Secretary of State and I share common ground. The CBI says that many of the City analysts believe that the proceeds of sale will not be substantially—if at all—increased by the inclusion of the nuclear industry. All these complex and complicated structures are the result of the Government's insistence on privatisation.

The Government accept that all these difficulties exist but they say that that is the only way to privatise the industry. They have not yet taken on board in this debate the fundamental point that, if the industry cannot be marketed without guaranteeing the risk of investors—which makes a nonsense of the idea of putting it into the market—the answer is not to market it and not to privatise it in any shape or form. That is the logical conclusion of the Secretary of State's proposal, from which the Government run away.

New clause 16 is reasonable. It says that it will be for the director to publish the difference between non-fossil and fossil fuels. That is entirely right for this, if for no other reason. We are told that nuclear power is uneconomic. The Hinkley inquiry is fought on a basis that has nothing to do with the economic case for that nuclear power station. Many of my hon. Friends will remember that for years we were told that the justification for nuclear power was that it was economic, and that nuclear power stations would provide us with cheap electricity. Given that record within the industry, surely it is reasonable—as we suggest in new clause 16—that, if anyone should scrutinise the difference between non-fossil and fossil fuels it should be the director rather than the industry.

Will the Secretary of State confirm—I have heard that this is so—that the area boards wish to set up an organisation in order to implement the levy? The boards are thinking along the lines of a purchasing agency contracted to them or run by them in order to collect the nuclear levy. We would find that utterly unacceptable. If this is to be done at all, it must be done subject to the proper independent judgment of the director, who can look after the interests of consumers. His objective eye should be on the proceedings so that consumers can see exactly what is happening.

The final amendment in the group deals with diversity. It sets itself modest and, in my view, reasonable objectives. It obliges the area boards to consider the issue of diversity, which is the only case that the Government have left for nuclear power, but gives them freedom of choice as to how they meet that obligation. I believe—and I think that many of my hon. Friends would share my belief—that diversity, the argument now advanced by the Government for the new generation of nuclear power, is merely the latest in a long line of excuses for preferring nuclear at the expense of coal. The amendment accepts diversity, but provides a way of achieving it that is neutral as between different sources of fuel and does not put nuclear in a special, privileged position not occupied by coal, oil, gas and other industries.

Mr. David Tredinnick (Bosworth)

Has not coal occupied a special, privileged position for the past 30 years because the CEGB has paid more for it than has been really necessary?

Mr. Blair

Exactly the same case could be made about nuclear power. What is interesting about the comments of Mr. Baker in the draft that came—involuntarily—from his office is his letting the cat out of the bag in disclosing that we are already paying a premium for nuclear power. Whatever money may have been put into the coal industry, the hon. Gentleman's argument applies in spades to what has been put into the nuclear industry.

The point that is germane to our present consideration of privatisation is why nuclear is being treated differently from coal. Why is one being made subject to the full rigours of the market and the other not? I believe that the argument about diversity exposes a weakness at the heart of the Government's case. The diversity argument is a very particular type of argument. It is a public policy argument. It is not an argument about market forces or about competition; it is an argument about long-term energy policy. That is what diversity is really about.

On inspection, the only argument for the fossil fuel levy with which the Government are now left is one that refutes the case for privatisation, because it assumes that markets cannot govern energy policy but must yield to the public interest. We may differ on where that public interest lies, but the fact that the Government are now driven to rely on diversity makes us realise that they are driven to accept the impossibility of running an energy policy simply at the behest of the market.

That is the difference between us—not merely on the privatisation of nuclear power or on the question of diversity, but on the case for privatisation itself. That is why, like it or not, when we support the new clause we are supporting the case for a long-term energy policy. We are supporting the case for market forces not to rule that policy. Ultimately, we are putting forward the case against privatisation, which is not in the interests of consumers, energy policy or the country as a whole.

Mr. Mans

I wish to speak mostly about the nuclear power industry.

It is clear, probably to both sides of the House, that there is a need for a variety of sources of power, not just generation from fossil fuels. I believe that my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) would like an increase, if anything, in the amount of electricity generated by nuclear power, whereas I suspect that Opposition Members would like a reduction and would probably prefer the nuclear industry to wither on the vine as an alternative to fossil fuels in the medium and long term.

My hon. Friend gave a number of reasons for feeling that the nuclear sector should be kept public. He mentioned planning. Planning inquiries into nuclear power stations have indeed taken considerable amounts of time; for all we know, however, if we ever wanted to build a new fossil fuel power station in the future that, too, might result in a long drawn out planning inquiry. One thinks of the preliminary steps taken in relation to Fawley B, a new coal-fired power station which is not yet off the drawing board. Before the plan was scrapped it was already clear that the planning process might take as long as the Sizewell process, judging by the protests from that part of the country.

8.45 pm

At present, capital costs are higher for nuclear than for fossil fuel power stations, but the gap is narrowing due to the need to fit environmental devices to fossil fuel stations to meet the increasing demands of the environmental lobby in this country and elsewhere. While there is no doubt that fossil fuel power stations will continue to have an advantage in terms of capital costs, that advantage is bound to lessen in future.

My hon. Friend also made some relevant points about future investment in nuclear power and research and development. Interestingly, since the privatisation proposals were announced a number of new initiatives have been taken by those in the private sector, such as Rolls-Royce, getting together with American concerns such as Combustion Engineering to produce new schemes for nuclear power stations—perhaps, in some instances, smaller power stations. There is no evidence to suggest that, simply because of privatisation, research and development money will no longer be spent on developing nuclear generation of electricity. BNFL is already looking into feasibility studies on replacing the two Magnox stations at Calder Hall and Chapelcross, perhaps with a modified PWR design. That, too, is a private sector initiative and shows that there is a future for nuclear power in the private sector.

It is also worth mentioning that the running costs of nuclear power stations—as opposed to the capital costs—are certainly of the same order as those of fossil fuel power stations, if not cheaper.

Mr. Beith

The hon. Gentleman confused us all by suddenly referring to a series of power station proposals as though they had emanated from the private sector rather than from the publicly owned nuclear sector. Will he clarify what he was talking about?

Mr. Mans

I cited Rolls-Royce as one private sector company—a privatised company, indeed—which is very much involved in discussing the production of smaller nuclear power stations, but that is just one example and there is already talk of similar plans in areas outside the CEGB. There is evidence that new initiatives are being taken as a result of the privatisation proposals.

One of the most significant points, mentioned only fleetingly in Committee, is that most of the nuclear power stations are right at the top of the merit order in which power stations are brought on line within the CEGB. That shows, if nothing else, that in purely running cost terms—as distinct from the capital costs of the new process—the generation of power by nuclear means is as cheap as fossil fuel generation. It shows that the nuclear industry has a future as an alternative means of generation in the private as well as the public sector. I therefore see no reason for it to be kept in the public sector.

I submit that in the future, with the increasing environmental restrictions on the generation of electrical power by fossil fuel means, nuclear energy will become a much more viable alternative. For that reason alone development should continue, and should continue in the private sector.

Mr. Malcolm Bruce

This debate is an interesting one, and the hon. Member for Bedfordshire, North (Sir T. Skeet) is to be congratulated on tabling his amendment, which is remarkably similar to one that I tabled at the same time—indicating that there is some common thinking even though, as I freely acknowledge, we approach the problem from totally different directions.[Interruption.] No, I do not disagree totally. That is not the point at all. I think that the hon. Gentleman and I agree on one thing—that the Government have got themselves into the rather ludicrous position of trying to advance the argument of rhetoric—bringing the electricity industry to market and then having to force a rig into the market to distort it. The hon. Member for Bedfordshire, North quite rightly says that this is a piece of nonsense. Why should not the Government operate more honestly, admit that there is a fix, take the nuclear industry out of their rhetoric, and leave the market to operate in the area of the electricity industry where it can more easily do so?

What I find interesting is that for 10 years of Conservative Government successive Secretaries of State have said, in effect, that the Government's policy on energy is not to have a policy. While the industry has been substantially in the public sector, there has been no policy, but now that it is to be privatised the Government have suddenly produced an energy policy—a policy which applies only to nuclear power. Nuclear power, we are told, is required for strategic reasons, but it is not fitted into a grand debate—we are not let into the inside thinking as to exactly what the Government's judgment of the strategy was. Certainly, it does not appear to have been produced by a radical reassessment of all energy options—weighing them up honestly and objectively, and then coming to a conclusion as to exactly where they might fit into a planned, or free market, or hybrid scenario.

We know perfectly well that from the outset the Government have begged every question, determined to have nuclear power. They knew that once they were committed to privatisation there was no possibility of making nuclear power stand up in the market place on ns own merits, so they introduced this extraordinary Bill, which creates this distortion. Among means of generating electricity, nuclear power is given a unique, distorted and privileged position, which will disadvantage the consumer and other players in the electricity supply industry. That is why, on the question of nuclear power, the hon. Member for Bedfordshire, North came up with a view similar to that of my colleagues and myself.

I think that it was last year, when the privatisation process was put in motion, that the Secretary of State said that the case for nuclear power would have to make itself. However, it could not make itself and it has not made itself, so the Secretary of State has had to introduce a fix in the Bill to take account of the inability of nuclear power to make a case for itself.

A number of factors need to be addressed. First, those of us who have a different view of energy priorities are at least entitled to argue that if we were allowed to determine which particular sector should be given a specific advantage it would not be the nuclear sector. It might be conservation. Certainly conservation ought to be the highest priority of this country, and it is one issue on which the Government can take positive action and make things happen. There could have been a decision to increase the use of natural gas—a much cleaner fuel, of which there is a great deal in the North sea. We could have made a very useful bargain with our Scandinavian neighbours. That would have been of substantial benefit for our medium to long-term energy requirements are concerned. Those options could have been pursued, but the Government did not even allow them to be explored because they had their own priorities.

Mr. Hardy

The hon. Gentleman is making a very interesting point. Does he agree that the Department of Energy was in favour of the Sleipner deal but that, for reasons of international finance, and because of the need to avoid the sort of trade deficits to which we are becoming accustomed, the Treasury opposed it?

Mr. Bruce

I do not accept that. Perhaps the Treasury knew something then that has only come home to roost now. There is no doubt at all that British Gas and the Department of Energy, left to operate freely, would have gone for that system. Indeed, if we had gone in early enough, when BP first mooted it, there could have been substantial benefits to the whole United Kingdom, both economically and in terms of energy.

It is interesting that the Government have decided that in one part of the United Kingdom—Scotland—there will be a separate nuclear company. Admittedly, it will not be an independent company but a subsidiary of the Scottish electricity companies. Nevertheless, the separation of the nuclear industry has been acknowledged as something that is tidy, at least in Scotland. The Government are therefore being somewhat inconsistent in not accepting that England and Wales, or indeed the whole United Kingdom, might benefit from having a single nuclear company.

As the hon. Member for Bedfordshire, North indicated, the nuclear industry is facing a very uncertain future. It was quite interesting that the hon. Member, who is as strong and enthusiastic a supporter of nuclear power as I am an opponent of it, gave us a very substantial list of uncertainties, escalating costs, drawbacks and disadvantages. That that was from somebody who is in favour of the industry is an indication that serious questions have to be faced which the Government's Bill simply fails to address.

Certainly the cost has escalated. It has already been said today, and was said many times in Committee, that it is extraordinary that up to about two years ago we were told, in spite of the obvious information to the contrary, that nuclear power was the cheapest form of electricity available. Now we have been told that those of us who said that it was dear were right all along—that it was, and has been, the dearest form of electricity available. Throughout that time, those of us who said that it was expensive were told that we were entirely wrong. The consumer, in the Secretary of State's words, has been paying a nuclear levy—the high cost of nuclear power—all that time.

There are increasing problems for the nuclear power industry. First, the cost of reprocessing is rising at an unpredictable and rapid rate. Sellafield has been faced with threats of closure by the nuclear inspectorate because of its inability to meet acceptable safety and operating standards. A private industry which is dependent on reprocessing—that is bad enough, because it is expensive—also has to face the possibility of being totally paralysed if the only reprocessing facility in the country were closed down on safety grounds. The commercial risk of being bound into that system is clear. If I were asked to take that risk—as, indeed, I and all other members of the public are being asked—I should not want anything to do with it.

The problem of decommissioning is also creating uncertainty. That, too, is coming home to roost. The first nuclear power station is moving into its decommissioning phase. When we look back five years from now, I shall be interested to see what the actual cost of that decommissioning to date proved to be. The amount that we are told has been estimated and put aside is £300 million, but those who have been involved in decommissioning experiments in Canada have found that it costs many times that amount. Estimates suggest that the decommissioning of a significant nuclear power station may cost £2 billion—more than the cost, at current prices, of building one.

I accept that these are only ball park estimates by people who may not be totally unbiased, although the Canadians have had experience of decommissioning a nuclear power station. Nevertheless, it may prove to be substantially more expensive than has been budgeted for. The Bill provides for a substantial sum of money to be set aside for decommissioning, but the industry may find that the substantial amount of money to be advanced by the Government is inadequate. The industry faces considerable uncertainties, all of which could add substantially to the cost.

9 pm

The biggest problem of all that the industry will have to face is that of waste disposal. The costs and the practicalities of waste disposal cannot be fully quantified because no acceptable system for waste disposal has yet been devised. We must not take short cuts when dealing with waste disposal. It would be much better to store the waste on site in an area where it could be safely monitored than to transfer it to another site for reprocessing. The problem with nuclear energy is that, the more material one handles, the greater the volume of waste one creates. The industry must confront the problem, and the consumer and taxpayer will also have to face up to it. So must the shareholder. I hope that the Secretary of State acknowledges that.

We are told that the private sector is to be given the opportunity to exercise its commercial judgment in an uncertain market, and the Secretary of State tells us that it will do so far more efficiently than the public sector. However, shareholders are to be told that they will not have to take a risk. The Secretary of State should acknowledge that the shareholders will have to take a risk. The hon. Member for Bedfordshire, North referred to the fact that the regulatory system is likely to be changed. It will almost certainly be changed. It will have to be modified in the light of experience. As and when the political complexion of the Government changes, the regulatory system will undoubtedly be changed. At that point, taxpayers are unlikely to be interested in providing substantial compensation for electricity industry shareholders.

The hon. Member for Bedfordshire, North believes that at some unspecified time flotation may take place, but my proposal is the more honest way to deal with the industry. The Secretary of State's criticism of the over-centralisation of the Central Electricity Generating Board is legitimate, but it has been blurred by the need to create the fossil fuel levy, the non-fossil fuel quota and the nuclear levy. That has distorted the framework of the Bill. It would be in much better shape if at the outset the Government had taken the advice of the hon. Member for Bedfordshire, North, kept nuclear power in the public sector, argued that there were strategic reasons for keeping it there and considered how to privatise the rest of the industry, which I accept is much more open to normal market forces and competition.

Furthermore, I would not privatise the industry until I had proved that a genuinely competitive industry could be created. That would be possible in other parts of the electricity supply industry, but the Government are privatising an industry that has built into it a substantial financial drag—the nuclear power industry. The Government have tried to ring fence it against risk and the foreseeable escalating costs that the industry faces, but they have been unable to take all the uncertainties fully into account. They will therefore find the City and the market less than enthusiastic about privatisation because it has not been thought through and properly worked out. The Government have created a monster which will return to haunt them.

The Secretary of State for Energy (Mr. Cecil Parkinson)

I hope that the House will not object if I intervene now to reply to the debate on the new clause and to speak to a number of Government amendments. After I have dealt with the new clause and spoken to the Government amendments, I shall listen to what is said about them and then reply to those comments.

The reasons for Government amendments Nos. 31 to 34 are straightforward. Under the present proposals, the nuclear obligation will be set once by order. We believe that that is too rigid. During the next 12 years, Magnox stations will be going off stream and PWRs will be coming on stream. However, it may not be possible to synchronise it so that, at any given moment, the amount of capacity that is needed to meet the obligations is available. Therefore, we are amending clause 30 so that we place before the House orders that will recognise the practicalities. That does not represent any change of policy. Our intention is still to fix the obligation at 15 to 20 per cent., but we need flexibility for the reason that I mentioned. Power stations will be going out of commission while new ones are being built.

Another reason, which I believe the House will accept, is that we are aware that although we have set a non-fossil fuel obligation and wish to see renewables come on stream, at the moment there are no sources of renewable energy that could meet a significant part of that obligation. The distributors will be signing up to meet their obligations for non-fossil fuel.

We want to create a new tranche of capacity that is reserved exclusively for renewable sources of energy. We do not expect it to be very large between now and the year 2000. It will be between 200 and 600 MW. It is important to develop renewables. We want to have the right, therefore, to vary the order. There is no point in creating a non-fossil fuel obligation to be met by renewables if they do not exist. We want to have the right to modify the non-fossil fuel obligation to take into account the development of renewables and we shall be reserving a special tranche for that purpose. That is what the four amendments are designed to achieve.

I have listened with great interest to the debate. I mean no offence when I say that the arguments had a certain familiarity about them. We have been debating the subject at regular intervals for about three months. I shall repeat the Government's position. In particular, the hon. Member for Gordon (Mr. Bruce) grossly misrepresented the Government's position. The Government were elected on a commitment to maintain the nuclear power programme and to privatise the electricity supply industry. I have made it clear in every speech that I have made that we recognise that the non-fossil fuel obligation is a distortion of the market, but we believe that it is a worthwhile distortion, for these reasons.

We believe that security of supply is absolutely vital. We believe that diversity is the basis of security, and that has been my argument since the day I took office. I believe passionately that diversity of sources of energy is a vital part of ensuring the security of supply. In case there are hon. Members with short memories, may I say that we have had at least three major incidents in the past two decades which have underlined the value of nuclear—the two oil price explosions and the miners' strike.

Without nuclear during those three major incidents, this country's supplies of electricity would have been put at risk. I have said this before and I will repeat it because, although it annoys Opposition Members it is true: without nuclear during the miners' strike, Mr. Scargill would have won. So we believe that the case for diversity has been made three times and that it would be an irresponsible Government who did not learn from those experiences.

Mr. Blair

What about oil?

Mr. Parkinson

The hon. Member for Sedgefield (Mr. Blair) asks me to talk about oil and that is precisely the point that I am going to make now—the volatility of fossil fuel prices, even since this Bill was introduced. In the past six months the price of oil has moved from $12 a barrel to $20 a barrel, and there is no one who does not believe that in future oil prices will move gradually, inexorably and inevitably in one direction—upwards. So we need diversity of sources of supply to give us the necessary security.

We were elected on a promise to privatise and a promise to maintain a nuclear programme. We are determined to honour both those promises and also to make sure that those who benefit from diversity contribute to the cost; that is the reason for the non-fossil fuel obligation, which will enable us to meet both our commitments. It will enable us to privatise and it will maintain the nuclear programme.

Let me repeat once again a remark that I have made over and over again but which the hon. Member for Sedgefield simply cannot or will not understand. The non-fossil fuel obligation does not increase or decrease costs; it opens them up for public inspection. Now, for the first time, as a result of our proposals, the public is being told what nuclear costs are and it will have set out for it every year the difference, if there is one, between fossil fuel prices and prices of nuclear. So the Government are not in any way hiding the costs of nuclear. For the first time the public is being told what the costs of nuclear are.

Mr. Blair

The hon. Member for Bedfordshire, North (Sir T. Skeet) asserted that it was no part of the function of the nuclear levy or tax to cover the cost of the new pressurised water reactors. Does the Secretary of State agree with that?

Mr. Parkinson

I will deal with that point in my own good time. The point that I wish to make now is that nuclear costs are being incurred at present and that if, God forbid, we had a Labour Government tomorrow, the nuclear costs would continue to be incurred because we need the capacity that the present nuclear stations give US. So there would be no change with a change of Government, and the costs of nuclear would continue to be what they are—the costs.

What we are arranging to do is to expose those costs. So in 80 to 85 per cent., of the market we will have competition in the supply of electricity and in the 15 to 20 per cent. met by nuclear we will, for the first time, have transparency: people will know what they are paying for.

9.15 pm

What I find particularly puzzling about Opposition Members is that they continue to attack us for exposing the costs of nuclear and to defend a system which conceals them. At present, the cost of nuclear is wrapped up in the bulk supply tariff, and nobody knows precisely what it is.

Sir Trevor Skeet

rose—

Mr. Parkinson

Whatever it is, every electricity user in this country pays it. It is being paid now and the fact that it becomes known and identified will neither increase nor decrease it.

Again, privatisation will not increase the nuclear component. In fact, ironically, for the first time the public is being consulted through Parliament about the level of nuclear provision. Were we not to have come forward with this Bill, it would have been declared CEGB policy to build four PWRS initially, with another five by 2003; so privatisation is not producing more nuclear power; it is exposing the costs of nuclear power and ensuring that the public, through Parliament, is consulted about the level of the nuclear obligation.

Sir Trevor Skeet

rose—

Mr. Parkinson

The hon. Member for Sedgefield gives the impression that somehow or other privatisation has put nuclear in a privileged position. Privatisation has put the first four PWRS in a privileged position, but the rest of the programme will have to be settled on is own merits by Parliament. The system that the hon. Member for Sedgefield and the hon. Member for Gordon defend would have imposed on the country a huge nuclear programme, would have wrapped up the costs in the bulk supply tariff —the plans are already made—and the public would have had to accept them on its own cost-plus basis.

Mr. Blair

rose—

Mr. Parkinson

That cost-plus basis is the basis on which the public has had to pay for nuclear from day one.

So here we have a position in which the Government are prepared to declare their commitment to nuclear, prepared to reveal and justify the costs and prepared for the first time to tell the public what they are. Opposition Members defend a system which imposes these things on the public without consultation.

Sir Trevor Skeet

The Secretary of State makes some very astute observations. May I ask him a simple question on costs? What is the difference in cost to the state with the nuclear industry inside and with the nuclear industry outside the state system?

Mr. Parkinson

I will explain in a moment why I believe that, although there are difficulties with nuclear—and I do not deny them—even with those difficulties the nuclear component is far better in the private sector and that the country will be far better off having it in the private sector.

Mr. Blair

I want to correct the Secretary of State on one point. It is the most extraordinary drivel to say that the electricity generating board would have insisted on the nuclear reactors and that somehow the things are now up for choice. The Government have already made the decision anyway; the inconsistency is having made the decision by giving the ring fence of nuclear power and then putting it in the private sector. The Secretary of State has said that the nuclear tax covers these four PWRs. Supposing that the hopes on cost are wrong and that we find that those PWRs are considerably more expensive than conventional plant. Is it not the case that under his proposals the consumer will pay the difference?

Mr. Parkinson

The consumer always pays the difference, as he does under the present system. The difference is that those costs will be exposed and the cost of the electricity will be exposed, and if the public does not like those costs it will have a choice about whether it will pursue a nuclear policy. I believe that it will. I believe that the arguments for nuclear will become stronger and are becoming stronger day by day.

I mentioned the volatility of fuel prices. We are now seeing a growing world awareness of the dangers of being over-reliant on fossil fuels. We know about the greenhouse effect, the acid rain effect, the generally polluting effect of fossil fuel-produced electricity. I believe that the arguments will move firmly in the direction of more nuclear in the years ahead. But nuclear will not be imposed on an unwilling country as it has been in the past, by Labour Governments in particular. In future, it will have to justify its existence, after the four PWRs that we are committed to helping the industry to build.

I repeat that it is not privatisation that is ring-fencing the nuclear programme for the first time. The nuclear programme has been imposed on the country by successive Governments and we are maintaining the existing level. We are not increasing that level and we are not reducing it; we are simply maintaining it.

My hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), who wanted to keep the industry in the public sector, and the hon. Member for Sedgefield disagreed on just about everything else; there was not a single word in my hon. Friend's speech that the hon. Gentleman could really support. My hon. Friend suggested that keeping the industry in the public sector would help. I believe that that would be fundamentally wrong, and we have the experience of the past to prove it. The history of the British nuclear programme—a history in which the Labour party played a prominent part—is littered with appallingly wrong and bad decisions.

The AGR programme has been mentioned in the debate. We have heard a list of stations which were 18, 17 or 16 years late. That programme was imposed on the country by a Labour Government. They chose the wrong technology. They imposed it on industry. The programme was carried through in an appallingly incompetent fashion. There was a total lack of financial discipline and management.

Already, simply as a result of the threat of privatisation, we see a change in attitude. The CEGB is starting to drive hard bargains with its suppliers. Now that it is aware that it is no longer in a cost-plus position, the CEGB is talking to BNFL about not getting fixed price contracts and no longer being at the mercy of BNFL's cost-plus mentality. Why is the industry coming to see me to argue the case for help and protection? It is because it recognises for the first time that it will not be in a cost-plus position and that it will not be in the position, in which Labour Governments would leave it, and which it would be in if it were in the public sector, of being able to spend whatever it likes and passing the cost through. There is the beginning of financial discipline in an area where there has been none, and where there would be none if the programme stayed in the public sector.

Mr. Morgan

In the light of the disparaging remarks that the Secretary of State has just made about the AGR programme, if the CEGB and its successor company, National Power, were to propose not to operate the AGR stations that are coming on stream this year—Dungeness B, Heysham 2 and Hartlepool—and merely kept them in reserve so that they qualified under clause 30 as capacity available—if the nuclear levy could be reduced by not operating them but merely having them as reserve capacity —would the Secretary of State agree to that suggestion?

Mr. Parkinson

A very large sum of money has been spent on the AGR programme and we are now at the point of seeing improved performance from those stations. A substantial part of the expenditure has had to be written off, but it is now producing results, albeit 10 to 15 years late. Opposition Members ducked sharply when we pointed out that in one of those leaked documents, which were the only research that they seemed to do in Committee, the industry had announced that it would have to write off £1,600 million of taxpayers' money because of the bad decisions taken exclusively by Labour Governments on the AGR programme.

We want to get the whole of the industry into the private sector. We want to get away from political influence and political impositions. We want to put the industry in the hands of commercial management. Even though there will be less competition in nuclear than we would wish, we believe that it will still be better managed, better off and more accountable if it is in the private sector.

We have heard some remarks about what the CBI wants. We have been told that the CBI wants a nuclear programme, that it wants it to stay in the public sector and then that it wants it to be floated off to create a competitive third force. My view is simple: what the CBI wants is the benefit of the security that comes from nuclear, but it does not want to make its contribution to the cost. Not only is the non-fossil fuel obligation a useful means of encouraging the development of the next generation of nuclear power stations but it is a way of ensuring that everybody who benefits from that diversity and security makes a contribution.

The hon. Member for Sedgefield asked how the system would work. I explained in Committee that there will be collective purchasing, through a company set up for that purpose, by all the area boards of the production from the nuclear stations. That production will be sold at the fossil fuel price to the area boards. If there is a difference and if the cost is higher than the selling price, that will become the levy, and that levy will be paid by all who use electricity. It will not be possible just to impose it on the domestic customer, which is what some people in industry argue for. The non-fossil fuel obligation will encourage the development of nuclear power stations but it will also ensure that the cost of those stations is fairly borne.

We believe that new clause 16 is unnecessary. It will be the director general who will compute the levy. It will be his job to decide the correct level of the levy and to publish it. It will also be the job of National Power separately to account for its nuclear production. That also for the first time will become transparent and people will know what they are paying for, but the director general will be part of the process of setting the levy; he will oversee it.

Amendment No. 148 proposes an interesting development. For the first time on behalf of the Opposition the hon. Member for Sedgefield recognised tonight the importance of diversity as a source of security, but in classic muddled Labour fashion. Having identified it as something desirable, they then make arrangements for it not to happen. They make a proposal for a vague system that encourages people to think about the possible benefits of diversity. We are not mealy-mouthed. We believe strongly that nuclear is the main source of diversity. As a result we are prepared to commit ourselves to justify our policies.

We noticed in Committee that the hon. Member for Sedgefield becomes remarkably coy if questions are addressed to him. When we ask him if he would close down the nuclear stations we get no answer. We point out to him that Cleveland Bridge is on the edge of his constituency and is very dependent on the nuclear programme; when we ask him if we may tell people there on his behalf that they will be out of a job, he looks coy, rushes off and talks to his journalist friends.

9.30 pm

When we got to questions of coal and Mr. Scargill, the hon. Member for Sedgefield handed over to his hon. Friend the Member for Rother Valley (Mr. Barron) and made arrangements not to be in the Committee Room, so he was not there while the arguments about coal took place. I was there, and I witnessed the hon. Member for Sedgefield achieve the impossible—of being present, but not in the Committee Room, for most of the time. [Interruption.] The hon. Gentleman is happy with his rhetoric and heated speeches, but we never find out in what he believes. We only know that he is opposed to privatisation, although we read in The Times that privatisation will stay and that the structure which we are putting in the private sector will remain for many years, because it will be a long time before there is a Labour Government. In any case, they would only tighten up the regulatory system. In other words, we hear a great deal about what is wrong with our proposals, but Opposition Members have no real plans for changing them. They would only regulate them a little, should they ever get the chance to do so.

We are asked, in connection with amendment No. 147, whether it would be appropriate for consumer committees to be involved in making the order setting the non-fossil fuel obligation. We believe that that is a matter for Government and Parliament—that it is for Government to make their proposals to the House, and we intend to do that. We do not think that local consumer committees would have a great deal to contribute to the setting of the non-fossil fuel obligation. That job is better done here in Parliament.

The House has had from the Opposition, and in particular from Labour Members, a typical piece of Labour escapism. They know full well that, in the nuclear programme we have, the nuclear stations owe much to policy decisions taken by them; they know that they cannot be closed; they know that we need them to ensure the security of the system; and they know the cost and object to the fact that we will expose the cost and argue the case for diversity instead of imposing it on an unwilling country. Nuclear has a great contribution to make. We are prepared to argue the case, to expose the cost and to have a transparent system.

I hope that my hon. Friend the Member for Bedfordshire, North will change his mind about pressing his new clause and that my hon. Friends will join me in exposing Opposition Members as a bunch of bogus no-hopers who have nothing to offer but criticism.

Mr. Ashton

We have just heard a remarkable speech from the Secretary of State. He began by saying that the Bill was designed to take the decisions out of politics and allow costings to be made without regard to political issues, but immediately went on to make a political speech, using the need for nuclear power to slap down the National Union of Mineworkers. Nothing has been said in the debate so far about the part played by gas turbines or about the new EEC regulations concerning the surplus of gas in the North sea and its use for generating electricity. That issue has immense ramifications for my constituency and in particular for West Burton B, the proposed coal-fired power station.

About two years ago the right hon. Gentleman who is now the Secretary of State for Wales, then Secretary of State for Energy, astonished the House one Question Time by saying that he would approve the building of a new coal-fired power station, West Burton B, close to West Burton A, in my constituency. The CEGB, which we had been lobbying for at least two years, said that it was keen to have that power station because planning permission for it had been agreed and it could be built quickly. It was pointed out that West Burton A already existed, that the roads and railway lines were there, that it would be handy for the river and that it would be close to the rich coalfields of Nottinghamshire. Indeed, the CEGB said in a publicity handout that it would be planned to be in operation by 1995. It would be a large station with a generating capacity of 1,800 megawatts. Decisions have to be made soon because it takes about five years to build a coal-fired power station. The then Secretary of State for Energy made his announcement a month before the general election. There were marginal seats in Nottinghamshire, there had just been a coal strike and there was much conflict between the NUM and the Union of Democratic Mineworkers. Today, more than two years later, not a sod has been turned or a brick laid. We continue to have only promises.

That power station was expected to create 2,500 construction jobs during the five years that it would take to build it. In my constituency there is 17 per cent. male unemployment in Worksop. A further 600 jobs were to be created in running the power station and many more running the railways, building a new road and even supplying fish and chips to the canteen. It was said that West Burton B would be given priority by the CEGB. It would have preferred Fawley in Southampton, but there were objections there because of property values. As there were no objections to West Burton B, it was agreed that the plan should go full steam ahead. All the councils agreed to the planning regulations.

Every time I have tabled questions to the Secretary of State for Energy about why he has not given his approval, he has said that there have been delays with the local councils on planning regulations, but the local councils agreed 41 out of 42 planning regulations very rapidly. The remaining one was whether a minor road should be straightened out before or after the power station was built. There has been no delay in deciding planning conditions for the power station, but we are still awaiting a decision.

The power station would keep five pits open. It would burn anything up to 5 million tonnes of coal a year. In Nottinghamshire, where the UDM supported the Conservatives throughout the miners' strike, the Conservative majority for the hon. Member for Sherwood (Mr. Stewart), who is not in his place tonight, went up from 600 to 4,500 and the majority of my hon. Friend the Member for Mansfield (Mr. Meale) fell to 56. UDM members were promised continually that they would be looked after by the Conservative Government, and the promises continued until the last general election, but when it came to delivering those promises nothing happened. Since then there has been nothing but delay.

In desperation, I turned to the CEGB and asked Lord Marshall of Goring, "Do you intend to build the power station? Where do we go from here?" He wrote me a very friendly letter: Dear Joe…It is no longer our decision whether or not to go ahead with West Burton. There is excess gas in the North Sea and the EEC Regulations have now changed so that it is permissible to burn gas to make electricity … the options now include building coal stations or to build plant with combined cycles of gas turbines with steam turbines. At the moment I really have no idea what choice the Area Boards will make. In my opinion it is the answer to this question that will determine the future of the West Burton project, and the hesitation you see is not due to our final discussions on planning matters. The Area Boards must give us a decision about the Fawley coal-fired station within the next few weeks, but it is only fair and realistic for me to tell you that I do not think we will get a decision from them concerning West Burton until a later date. So the whole project is back in limbo. We were told that if there were a bad winter in 1992, the CEGB would have to have power cuts because it would not have sufficient capacity to meet demand. That was the urgency for West Burton B. Everyone knew that the Government did not want a coal-fired power station and would have preferred a nuclear power station, but they knew that it would take two or three years to get planning permission for another Sizewell or nuclear power station and there was already planning permission for West Burton.

So why is there a delay? I will tell the Secretary of State why I think there is a delay and I hope that he will come clean and tell us the real reason. I think that he does not want to saddle the new buyers of the electricity industry with a £1,000 million debt for the new coal-fired power station. He knows as well as we do that under the old nationalised industry, the CEGB used to run at 80 or 85 per cent. of capacity. It could not afford to run any higher or faster than that because if there had been power cuts because it was too close to capacity there would have been a political uproar and an outcry against the Government's mismanagement of a nationalised industry. But when the industry is sold off the private people can run it at 99 per cent. If there are power cuts and they have not provided enough capacity, they either import more from France to take the place of Fawley power station or say, "Hard lines, there will have to be cuts in consumption or electricity will go off at peak periods." They will be able to get away with that because the industry will be privately owned. New clause 16, which shows the difference in the price of electricity, must therefore be implemented.

Another factor may be that the buyers of the industry want a coal-fired power station but do not want such a power station burning coal at the present price. If they can delay the building of the power station for five or 10 years and in the meantime two new ports are built on the Humber—there is a Bill before the House dealing with that —they will be able to import cheap coal from South Africa, China, South America, Poland or elsewhere. That would make it more profitable. By that time, more pits in Nottinghamshire and south Yorkshire will have closed. That is probably the reason for the delay. The costings will be done again on the basis of cheap imported coal rather than whether, on present costings, coal is cheaper than nuclear power.

The Library research document says that clause 16 is most important. It offers a private supplier an escape if there is a power cut caused by circumstances "not within his control". That means that a heavy snowfall or excessive cold could be circumstances "not within his control" and there could be power cuts which might be disastrous for anybody dealing with a frozen food factory or freezers in houses. Yet in such circumstances the private supplier would be protected.

Mr. Jonathan Sayeed (Bristol, East)

The hon. Gentleman subscribes to the conspiracy theory as to why something has not happened, but could it not be that the generating authority is looking at combined steam and gas generation as it is likely to be cheap and much cleaner?

Mr. Ashton

That is the latest proposal as a result of EEC regulations. However, as Lord Marshall said, it is no longer his decision. When the Bill is enacted and the industry is privatised, as it will be in a few months, everybody can wash his hands of it and say, "It is nothing to do with me." For two years, the ball has been kicked from the Secretary of State to the CEGB and the local councils have been blamed. If the power station were to be built, five pits would be kept open. That power station should now be 2ft high and due for completion in 1992.

There is a financial consideration and many jobs are involved. We are talking about the future of the pits and of the area, but we cannot get a decision from the Secretary of State. He will not nod his head and say, "Go ahead." He wants to delay until after the Bill is enacted and the new ports are sucking in cheap coal. If he cannot give us an answer at the end of the debate, I hope that he will agree to meet a delegation from my local council and the coalfield community so that we can sit round a table and thrash this out rather than having to debate it in the House.

Mr. Michael Irvine (Ipswich)

It was startling enough to hear my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) advocating retaining the nuclear element of the power generating industry in public ownership, but it was even more startling to hear some of the arguments that he put forward in favour of that proposition. I heard him saying, for example, that one of the key arguments in favour of retaining the nuclear element of the electricity generating industry in public ownership was the fact that in constructing nuclear power stations, cost and time overruns were frequently encountered. He mentioned Hartlepool power station, which took 19 years to build, as an example. I can trump that by mentioning Dungeness B, which took 20 years to build. My hon. Friend drew from this conclusion that the nuclear element of the power generating industry should be retained in public ownership.

9.45 pm

I draw the diametrically opposite conclusion—that it is about time such things stopped. No private industry could possibly countenance such cost or time overruns. State corporations can and do tolerate such inefficiency. It is about time that that was put to an end and I am glad that the Bill will do so.

While listening to my right hon. Friend the Secretary of State, I noticed that there were 12 Labour Members sitting opposite him. Of those 12, no fewer than 10 represent coal mining constituencies. I looked across the Chamber and my eyes encountered the steely glare of my old adversary, the hon. Member for Ashfield (Mr. Haynes), a miner himself for many years and an official of the National Union of Mineworkers. I looked along the Bench and saw the hon. Members for Rother Valley (Mr. Barron) and for Sedgefield (Mr. Blair) and behind them the hon. Members for Pontefract and Castleford (Mr. Lofthouse), for Bassetlaw (Mr. Ashton), for Midlothian (Mr. Eadie), for Rhondda (Mr. Rogers), for Wentworth (Mr. Hardy) and for Hemsworth (Mr. Buckley).

Mr. Allan Rogers (Rhondda)

Whom do you represent?

Mr. Irvine

I represent 68,000 consumers in Ipswich.

Another hon. Member who was present then, but who is not here now, was the hon. Member for Barnsley, Central (Mr. Insley). He had the distinction of being the chief administration officer of the National Union of Mineworkers form 1984 to 1987. In Committee, I called him the high priest of the mining interest and that was a fair description.

I make no criticism. Those Opposition Members are right to be here to represent their constituencies and to put forward the case for the coal mining industry. But we should remember that they have that particular vested interest at heart and that the case that they put forward, very properly, is the case of that particular vested interest. It is interesting to compare the scale of their turnout with the overall turnout of Labour Members.

Mr. Haynes

I am going to deal with you.

Mr. Irvine

I heard something of a threatening remark pass across the Chamber.

Mr. Speaker

Order. I hope that it was not an unparliamentary threatening remark.

Mr. Irvine

In my judgment, it was near the borderline, but probably not quite over it.

In his speech earlier, the hon. Member for Sedgefield asked why the nuclear industry has been singled out for special treatment. I can give him one very good answer, which is at the heart of the case made by my right hon. Friend the Secretary of State. Having a nuclear-generated element in the power industry means that there is that much greater diversity of supply. The hon. Member for Sedgefield said that the argument about diversity of supply was the only case that the Government had left. He said it in a derisory and mocking manner. Whether or not it is the only case is immaterial because it is a very good case and goes right to the heart of the Bill.

My right hon. Friend the Secretary of State made the point that oil was subject to rapid price swings. He mentioned how, in the six months since the Bill first started on its way through the legislative processes, the price of oil had risen $12 a barrel to nearly $20 a barrel. That is a significant argument against relying too much on oil as a source of generating energy.

Coal has been just as erratic and dangerous a source of supply. During the past 20 years the generation of electricity in this country has been threatened by major strikes three times. The last one in particular was a highly politically motivated strike. The generation of electricity was threatened in 1972, again in 1974 and most crucially in 1984–85.

Therefore, it is entirely right and proper that while giving market forces due rein and producing the efficiency and the benefits that market forces can bring the Government should, in a very undogmatic, pragmatic and common-sense way, treat the nuclear element of the industry as a special case. It is absolutely right that it should be treated as a special case because it will add to the diversity of our electricity supply. Greater diversity of supply ultimately means greater security of supply.

Mr. Eadie

I understand that the hon. Member for Ipswich (Mr. Irvine) made the same speech in Committee. Probably the only good thing about it was the advertisement that he gave to my hon. Friends' assiduous attendance during the debate.

I find it strange that the debate seems to have developed into an advertisement for nuclear power. I found it a bit rich when the Secretary of State decided to intervene to rubbish existing British nuclear technology and came out in favour of the PWR. We in this country have never had a PWR. As I have said before, we are building an American-British bastard version of a PWR, which has not yet worked. When we are talking about efficient technology and advertising nuclear power, I advise the House to look back at the history of nuclear power in all countries because when there is a new nuclear generator and a new generation—

Mr. Sayeed

rose—

Mr. Eadie

If the hon. Gentleman will allow me, I should like to continue.

When there is a new nuclear generator, there is always trouble to start with. That will be the history of this exercise.

Mr. Mans

rose—

Mr. Eadie

Perhaps the hon. Gentleman will allow me to finish my point. I have only just started my speech.

I thought it a bit rich of the Secretary of State to rubbish British nuclear technology when we are taking the Westinghouse American type. They decided not to build any more, so it is a bit rich to put that defence.

I am trying to say that the debate has become a general advertisement for nuclear power. Just last week I read that the Government are so confident about nuclear power and thermal nuclear power that they propose to spend £20 million advertising it. It reminds me of the old ditty that I heard as a boy. It went something like this. The codfish lays a million eggs, the hen lays only one, but the codfish doesn't cackle when its little stunt is done. The artful hen we praise, the codfish we despise, but every thinking man will agree it pays to advertise. The right hon. Gentleman proposes to spend £20 million advertising a deficient case.

Mr. Sayeed

Will the hon. Gentleman give way?

Mr. Eadie

I want to make my speech, but I will give way. The hon. Gentleman has not been present for the whole debate.

Mr. Sayeed

The hon. Gentleman is quite right. I have not been here during the whole debate. However, if I remember correctly, the hon. Gentleman said that we had never built a PWR. Every nuclear submarine operating from and built by this country has a PWR at the heart of its generating system. They have worked safely for many decades. The hon. Gentleman should not forget that PWRs are effective and safe.

Mr. Eadie

Whatever qualifications the hon. Gentleman may have, he has no qualification in engineering.

Mr. Sayeed

That is quite wrong.

Mr. Eadie

I am astonished. I do not know where the hon. Gentleman got his qualification. He is talking about a little nuclear reactor in a submarine and comparing it with building a big thermal nuclear power station. It defies analogy. If the hon. Gentleman were to make that suggestion in an institute of engineering, he would be laughed out of the place. I should not have given way to the hon. Gentleman.

My old adversary, the hon. Member for Bedfordshire, North (Sir T. Skeet), introduced this debate. I have great admiration for the hon. Gentleman. He is always diligent. Whether or not we agree with him, he always spends time and energy on his speeches. He has been here during the debate. The fact that he is absent now is no criticism. He has been present since 3.30 this afternoon. Perhaps he is having a cup of tea. In the course of the argument that he was trying to build, he said that he was searching for the truth. It is a search not for the truth but for the blarney stone. The hon. Gentleman used phrases such as, "Let us have temporary public ownership for a few years, at least until the difficulties have been overcome." He is pro-nuclear and anti-coal. I should have thought that someone of his experience who is pro-nuclear would understand the technical problems of nuclear power in the United States of America and in this country. The problems will not go away in three years.

The hon. Gentleman said also that the public are not ready. I cannot understand why the public are not ready. Perhaps they find it unacceptable that they have been asked to pay a high cost for this Bill. The hon. Gentleman considers that the Bill is in a state of crisis. New clause 3 could have a different title. It could probably be called the "Saving of the Privatisation of the Electricity Supply Bill". The hon. Gentleman was not confident that the Bill would succeed unless we had public ownership, as he described it, of the nuclear section.

We have talked about the nuclear tax. My hon. Friend the Member for Sedgefield (Mr. Blair), the shadow Secretary of State for Energy, made his contribution in Committee and has made great play of that tax. I know that to some extent that has worried the Government, because it is getting home to the general public that, despite what the Secretary of State for Energy has said, they are paying a tax for nuclear power. It is what we describe as a blatant preference for nuclear power.

The coal industry has been brought into the debate, but what have been the arguments in favour of nuclear power?

It being Ten o'clock, the debate stood adjourned.

Ordered, That at this day's sitting, the Electricity Bill may be proceeded with, though opposed, until any hour.—[Mr. Chapman.]

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

Mr. Eadie

All the arguments in favour of nuclear power have been torpedoed to some extent in the debate and at the various inquiries held. Two of the main arguments in favour of nuclear power were that it was environmentally more acceptable and that it was cheaper than coal, but we know that that is not true. The chairman of British Coal has said—I do not know where he obtained his figures, and various figures have been quoted in the debate—that there is evidence that in the immediate future the gap would be as high as 40 per cent. between coal and nuclear power. To some extent, therefore, the price argument has also been torpedoed.

It has been argued that environmentally coal is a very dirty pollutant, but that argument has also been destroyed to some extent. On a worldwide basis, coal is responsible for about 15 per cent. of pollution, but in Britain it is responsible for half of 1 per cent. Hon. Members who talk about dirty coal and its polluting effects should put the matter into perspective. When I led a delegation from the miners' parliamentary group to meet the Secretary of State for Energy, one of the points that we made was that it was time that he stood up and defended coal. He is a custodian of the coal industry. It is rubbish to make out that coal is the main pollutant in this country. The right hon. Gentleman knows that that is not factually true. As the sponsoring Minister, he has a responsibility to defend the coal industry.

Mr. Michael Stern (Bristol, North-West)

rose—

Mr. Eadie

I will give way to the hon. Gentleman as he has been here for most of the debate.

Mr. Stern

I have been listening to the hon. Gentleman with some incredulity. Does he agree that of the fossil fuels that are burned, coal is the greatest pollutant? In fact, if we are talking about atmospheric pollution, will he agree that however little—according to his statistics—coal contributes to atmospheric pollution, nuclear power contributes nothing?

Mr. Eadie

I shall come to that aspect. I begin to wonder when the debate will end, because the hon. Gentleman has tempted me. Incidentally, his figures are wrong and he should look at them again. I have looked up the figures. I have already given the main pollutants. Coal contributes 15 per cent. to the carbon dioxide elements of the greenhouse effect, gas contributes 6 per cent. and oil, primarily for transport, contributes 16 per cent., so coal is not the main pollutant. The hon. Gentleman should obtain the figures from the Library. He will then be able to inform the House that coal is not the main pollutant.

Mr. Stern

Will the hon. Gentleman give way?

Mr. Eadie

The hon. Gentleman has had his opportunity and another hon. Member wishes to intervene.

Mr. Ian Bruce

The hon. Gentleman referred to pollution from the coal industry. He will be aware that the amount of nuclear radiation that comes from coal ash is far in excess of anything emitted from a nuclear power station. If the nuclear installations inspectorate visited a coal-fired station it would close it down if the same rules were applied as it applies to the nuclear industry. The hon. Gentleman mentioned 15 per cent. of pollution coming from coal-fired stations, but he did not answer the question put by my hon. Friend the Member for Bristol, North-West (Mr. Stern) about the amount of pollution from nuclear stations.

Mr. Eadie

Again, it was a mistake to give way. The hon. Gentleman must look up the facts if he wishes to pursue such an argument. I hope that when the hon. Gentleman makes his speech he will give the source of his evidence as it is not factually correct.

We cannot draw a comparison between the environmental effects of the coal and the nuclear industry because they are not in the same race. Nuclear power is unforgiving technology, as we know from Three Mile Island, Chernobyl and Windscale. We are told how good thermal nuclear power is and how well the Westinghouse PWR works, but some hon. Members know that in the United States not one such reactor has been built since 1974. When I was last in the States I was told that no one had any intention of building another such reactor because they were publicly unacceptable. Incidentally, I was also told that no one would build a PWR similar to the ones that we propose to build because they are technologically out of date.

The Secretary of State referred to security of supply. I have made many speeches in this House on that and coal must be considered in that context. Every station should strive to achieve security of supply

. We know that the oilfields of the North sea are now past their best. In the 1990s, production will decrease by 1 million barrels per day. Today it has already been said that in the 1990s the price of oil will escalate and that OPEC will be in a position to dominate the price of oil. In the 1970s we carried an annual burden of £5 billion due to the import of oil. Incidentally, since the Government took office 10 years ago, they have enjoyed £76 billion in oil revenues as a consequence of North sea production. On the latest available figures—I have not checked them—we consume more than 83 million tonnes of gas. That is equivalent to one third more than we produce, and the extra consumption will carry an import price.

I do not believe that the case has been made for treating nuclear power as a special case. The hon. Member for Bedfordshire, North made a valiant attempt to save the Electricity Bill, but the Opposition do not want the privatisation of electricity. We believe that the Bill is a monster and that it will make the consumer and the country suffer. I hope that when we decide what to do it will not be just a question of public ownership of the thermonuclear power industry but that we shall return to public ownership of energy and a policy and strategy that will benefit the people of this country.

Mr. Michael Stern (Bristol, North-West)

I am grateful for this opportunity to make a brief contribution to the debate. I shall not follow completely the arguments used by the hon. Member for Midlothian (Mr. Eadie). I was sorry that he chose to refer so slightingly to my hon. Friend the Member for Bristol, East (Mr. Sayeed) who comes to the debate as a naval engineer. I am sorry that the hon. Member for Midlothian had not researched that fact before he spoke as he did.

This debate is mainly about the best future for the nuclear component of the electricity industry. In the next few years, that component will undergo several startling changes. The first, on which we are already embarked, is the changeover in the principal method of production through nuclear means from the AGR to the PWR which, in itself, is a major change.

In addition, as the pace of change is accentuated—even in advance of the passage of this Bill—by the prospect of privatisation, even greater changes are taking place in the potential of the nuclear industry. The possibility of smaller PWRs and nuclear stations, designed to plug gaps rather than provide a base load, are being discussed for short-term use.

In recent weeks the physician's dream of the production of power by nuclear fusion has, hopefully, come one small step closer to reality. No doubt, as fusion becomes more of a possibility, its impact on the generation of electricity will become more marked.

I should like to refer briefly to a subject that I mentioned on Second Reading—the fact that the demands on electricity generation throughout the world will, in a short time, be infinitely greater than we have ever been used to. The mere fact that we in this country—like most of the developed nations—use 15 times as much electricity per person as many parts of the developed world, which want to accelerate their standards of living to somewhere closer to ours, will mean that there will be a demand for vastly increased electricity generation.

Anyone who believes that such vastly increased electricity generation can possibly come from the burning of fossil fuels can only be someone who believes that human life is designed to grow in ever hotter greenhouses. If we are serious about wanting to assist the developing world to achieve a standard of living which we find acceptable, we can help them only through nuclear or renewable sources of energy. There is no other alternative available. In the next few years we shall demand from the nuclear section of the industry rapid changes, merely to meet the demands of the rest of the world.

The new clause gives us a simple choice. Tremendous demands for change will be made of this section of the industry. Is that industry more likely to respond rapidly to change if it is in the private or the public sector? I do not think that even Opposition Members would argue that if an industry is retained in the public sector it will have the impetus to change and develop.

If the nuclear sector is to develop in the way that will be demanded of it in the next few years, we must give it every incentive to be ready to meet that change. It will have to take its place in a market and be responsible to the forces of competition.

10.15 pm

A second argument for the nuclear industry to move into the private sector as quickly as possible concerns marketability. It has been said several times, not least by my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), that the nuclear industry will be difficult to market. I take exactly the opposite view. If we look at the various sections of the industry in terms of their attraction in a stock market issue, we find that we are looking at two rather different industries. The fossil fuel industry has a potential for high profit, but its profit can be greatly affected very quickly by environmental demands, regulatory demands of the EEC and the development of new and untried technologies such as the massive expansion of flue gas desulphurisation—or hopefully, at a later stage, fluidised bed combustion.

The non-nuclear end of the industry could be characterised, in marketing terms, as the sort of equity that would be very popular on the stock market among private investors but would carry high risk and high reward. The nuclear industry, as it exists at present, is a wholly different animal. Most of the costs that go into the profit equation in the nuclear industry have already been incurred: they are known. Therefore the nuclear section, particularly in its attraction for institutional investors, will be very much more in the nature of a gilt-edged stock. It is unlikely to show the same rapid changes in profitability as the non-nuclear industry; on the other hand, it is much more likely to produce a steady return for the investor.

I do not share the doubts of my hon. Friend the Member for Bedfordshire, North about the marketability of the nuclear section. I believe that it will appeal to a different section of the stock market, but appeal it undoubtedly will. On the basis that the industry must be ready to respond to change, and that that can result only from its being exposed to the forces of competition and profitability—and on the basis that the industry will itself broaden the appeal of the overall privatisation of the electricity industry—I hope that the new clause will be defeated.

Dr. Kim Howells (Pontypridd)

In his proof of evidence to the Hinkley C public inquiry last October, Mr. F. P. Jenkin, on behalf of the CEGB, listed no fewer than 28 reactors—mainly Magnox—which had elected to be decommissioned in the next 12 years. The bulk, incidentally, are to be decommissioned by the mid-1990s. The likely costs of decommissioning, however, are as vague in 1989 as the various proposals so far announced for physically dismantling nuclear stations and disposing of their constituent parts.

The operators of nuclear power stations are required to make provision in advance for the cost of shutting them down, but a recent survey by the Financial Times energy economist suggests that they are planning that provision on the basis of very limited evidence, and that they are likely to find their funds insufficient to meet the actual cost. The utilities have recently calculated that cost on the basis of 10 per cent. to 20 per cent. of the cost of building a new station. With the cost of new reactor capacity running at around £1.2 billion per 1,000 MW, that conservative calculation represents a substantial sum. The SSEB, for example, estimates the cost of dismantling its two Hunsterston B reactors at £270 million in 1992 values.

If we give the utilities the benefit of the doubt and take, as an average per plant, a figure of just £200 million for decommissioning, the 20 reactor sites to be decommissioned by the year 2,001 will involve expenditures of no less than £4 billion. If, as is likely, the decommissioning cost is nearer £300 million per site, the global cost hovers around the £600 billion mark. It is little wonder that the majority of Government Members want to dump responsibility for that decommissioning in the lap of somebody else. But the responsibility cannot be dumped—the decommissioning process will affect us all, whether we like it or not, in the same way as we all share responsibility for the burning of hydrocarbons and for the detrimental effect on the environment of doing so without proper technological safeguards.

Some of the proposals for decommissioning nuclear power stations are barmy enough to make even the Secretary of State's hair curl. Recently, I read a paper by a group of West German nuclear engineers. It advocated that, once fuel rods had been taken from the reactor core, they should be replaced by high explosives, and that controlled explosions should take place in order that a new generation of robots might go into the reactor core, pick up the fragments of irradiated material, and drop them into little lead-lined sacks. The robots would then come out of the reactor. It would be dismantled in that fashion.

It seems to me that the industry simply has not thought this problem through. The Government are attempting to make sure that they get out of the situation so that they will not have to take responsibility for it. That is not good enough. They assume that they can substitute the effects of the free market—that, somehow, a magic wand will be waved and that everything will be all right once privatisation has taken place. I should like to draw the attention of the Secretary of State to reports that the Chinese are negotiating for South African coal, despite the fact that British Coal is now the world's largest importer of Chinese anthracite because it closed down virtually all the anthracite mines in South Wales. The Chinese are so desperate for coal that they are willing to shop around and buy it from other countries at the same time as they export subsidised coal to break the coal industry of a potential customer—namely, us.

A free market in energy does not exist, and it never has existed. Energy has always been right in the cockpit of politics, and it always will be there whoever controls the sources of energy in the 21st century will have political power as well as economic power. It seems to me that the Government are trying to dump responsibility and make a fast buck. That is what it is about. To quote a former distinguished member of this House, we are selling the family silver for short-term gain. That is a disgrace—a disgrace in terms of safety, in terms of the health of our children in the future, and in terms of those children's inheritance of a sterilised coal industry.

Mr. Ian Bruce

I did not plan to speak, but I listened with great interest to information being abused by the Opposition and thought that I should say a few words about the rather strange notion of my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet)—for whom I have great respect—that somehow, by keeping the nuclear industry within government, we would be protecting the public and doing the best job for the nuclear industry.

We in this country started off with a Magnox programme. We built some 20 stations, every one of them different. So many of the decisions as to how we would build them, where we would build them, and the different equipment that would go into them were examples of Ministers putting their sticky fingers into decision-making. Of course, we know well what happened when there was a decision to be made under a Labour Government. The AGR technology was unproven; the pressurised water reactor technology was well proven, and was going through in the case of most of our competitors; and there was the steam-generating, heavy water reactor, in respect of which, I might point out, I have the honour of representing Winfrith, which had the only model of that type. We decided to go for the advanced gas-cooled reactor. We learned to our cost that that was a very expensive route to follow.

We toyed with fast breeder reactors, but we decided to soft-pedal on that type of reactor. I was surprised to hear the hon. Member for Midlothian (Mr. Eadie) say that Britain has no experience of pressurised water reactors. My hon. Friend the Member for Bristol, East (Mr. Sayeed) pointed out, having been in the Royal Navy, that we have built and run over 20 of those reactors and that we have done so extremely effectively. If an organisation decides to go down a particular technology route—as the Royal Navy did—and to stick with it, it can be most effective.

France adopted a technology and then refined it. By investing an amount equal to £20 billion, it is now able to provide the cheapest electricity in Europe.[Interruption.] No, Electricité de France is not in debt. Moreover, France is exporting electricity to this country, Germany and other countries. France generates more nuclear power than it needs.

We have suffered from constant changes, influenced by Government policy. That is why our nuclear industry is in such a mess. One wonders, therefore, why the South of Scotland electricity board has been so successful. It runs a small number of nuclear power stations. However, the board was sensible enough to look at other people's technology—for instance, at the CEGB's technology—and pick the winners when the bugs had been taken out of them. The SSEB's nuclear power programme provides cheap energy which has benefited Scottish industry.

The European sector of the Soviet Union is running out of cheap coal. It has made the decision—

Mr. Morgan

Perhaps I could correct what the hon. Gentleman said a few moments ago. Electricité de France has made a loss.Power in Europe of 30 March says: EDF slipped back into the red last year.

Mr. Bruce

I stand corrected on that point, but that is only one year. After all the money that has been invested in the coal industry to ensure that bulk supplies of coal are produced for our electricity industry, it would be hard to argue that we are making a profit out of the energy industry.

The European sector of the Soviet Union has little cheap coal now available to it, so it has decided to build 36 large pressurised water reactors. The Soviet Union is asking Britain to help it to design safe pressurised water reactors.

Before the Secretary of State introduced his proposals, the CEGB said that nuclear energy was cheap. Many people have referred to the fact that before the break-up of the organisation was suggested the CEGB said that nuclear energy was cheaper than any other form of energy. By fair means or foul, it has now made sure that in the Bill the Secretary of State provides compensation if nuclear energy, when it is properly costed and put into the system, is found to be more expensive than other forms of energy. One can imagine why National Power has taken that view: it is the only organisation that currently has large-scale generation from nuclear power, and so it is looking for some guarantees from the Government. But I also understand why it has great problems with the way in which nuclear power is to be costed. We in this country have failed to make the decisions that we should have made on a number of matters, particularly on waste disposal.

10.30 pm

We were told some years ago by Nirex that the shallow burial of nuclear waste was a sensible, economic and safe means of keeping the waste out of harm's way. One must remember that this particular type of nuclear waste has been stored for 20 or 30 years in prefabricated asbestos or metal sheds above ground in encapsulated tubs, and that we have all felt very safe about that. Bradwell, which did not want a shallow nuclear dump, has had a shed filled with nuclear waste for years. I have one in Winfrith; anyone who has a nuclear power station has one of these sheds, where we have stored safely for up to 30 years intermediate and low-level waste.

Unfortunately, the Government have been pushed—possibly by people's fears, which have been whipped up by Opposition Members—[HON. MEMBERS: "Oh!"]—into proposing such an incredible solution as burying this type of waste under the sea. We also have the problems of decommissioning. When Magnox stations were built, it was clear, before we built them, how they would be decommissioned: people would remove all the parts that could be removed, take out the very radioactive material—the fuel, and so on—which would be taken away for reprocessing, and the inside of the nuclear reactor, which would be only marginally radioactive, would be inside a large shield, purpose-built to keep it in, even when it contained very radioactive material, and would simply be buried in a hill. That is the cheapest and most sensible way of getting rid of a nuclear power station.

The amount of radioactive material left in a pressurised water reactor will be even less, and these reactors will be even easier to deal with. To want to break the reinforced concrete shielding at Sizewell, in order to take away a small amount of radioactive material when the life of the power station is at an end, is totally mad. Why not have the highest hill in Suffolk, simply by covering it over and leaving it? That is the best and cheapest way of getting rid of it.

Again, National Power will be worried about the costs of having to reprocess.

Mr. Eric Illsley (Barnsley, Central)

rose—

Mr. Bruce

I must get on.

It will be worried about reprocessing fuel that has no use. We have said in the past that we were reprocessing this fuel because we would run out of uranium which we would need for fast breeder reactors. The Government ought to look at what is to be done with the fuel. Magnox fuel needs to be reprocessed because it is unstable in its unreprocessed state, but the fuel from AGR and PWR reactors could be stored without reprocessing.

The Government must therefore look at the cost of waste disposal, the cost of decommissioning, and the cost of reprocessing and perhaps see that as the way to control the additional costs that may or may not come through in nuclear power. I believe that we have an opportunity to do something about costs while we are selling off this part of nuclear generation, because on-going costs of nuclear generation are lower than those of any other fuel; that is why they are left on as base load in all our power systems. By selling these power stations at a price that the market believes they are worth rather than at the cost of building them, one can get an economic cost for the operator to operate them at the price the shareholders paid for them rather than the price that the CEGB paid for them. In that way the market could decide the best economic rate for running the power stations.

New power stations will show on an economic basis that they can be cost effective. The two organisations currently licensed to run nuclear power stations—the Atomic Energy Authority and BNFL—are considering the possibility of going into partnership with private companies. That demonstrates graphically that when decisions are taken away from the monopoly supplier, the CEGB, other people want to get into nuclear power generation. I should be grateful if my right hon. Friend would address a few remarks to how he sees power stations being run effectively by the Atomic Energy Authority or BNFL if they eventually get into private hands.

With the use of present technology, the private approach will mean that nuclear power will be generated far more cost effectively than before. The same efficiency that the CEGB has demonstrated in running coal-fired stations, which provide 80 per cent. of its production, will be shown in a group of nuclear reactors which will have to come inevitably because we do not have an unlimited supply of coal. The economic cost of taking coal from the ground will get higher and higher, while the cost of nuclear energy will get lower and lower.

Mr. Hardy

I will try not to respond at length to the hon. Member for Dorset, South (Mr. Bruce) but some parts of his speech cannot pass unremarked. His was the first reference today to cheap French nuclear power. We have shown over the last three or four years, after listening to a succession of Conservative Members in previous energy debates making the same point, that it is unjustified. Electricité de France is the largest single corporate debtor in the world. It is sustained by the French Government because they are determined to ensure that it corners the market and supplies heavily supported nuclear power to keep French industry in a competitive condition.

The hon. Gentleman also referred to Polaris submarines. I thought that at one point he was about to suggest beaching them all in order to provide new little top-ups. If they were privatised as well, they could be used to serve the spot market in power stations, as was recommended in Committee.

I do not want to respond further to the hon. Gentleman although I think that his speech was the first of the penal sanctions that will be taken against the hon. Member for Bedfordshire, North (Sir T. Skeet). The hon. Member for Dorset, South gave the credit for the decision to reverse the Nirex clay bed burial proposal to the Opposition and not to the three Conservative Members who were instrumental in changing that decision just before the election.

I want to compliment my hon. Friends on their comments. My hon. Friend the Member for Pontypridd (Dr. Howells) echoed the Secretary of State's concern for priority for security of supply. The Secretary of State joined us only on rare occasions in Committee. He never finished a speech that I interrupted on a point of order before we finished one day. I do not think that we saw him in Committee after that. However, the Secretary of State is right to serve the priority of security of supply. The only difficulty is that he seems to see security only in the nuclear context. If he was really keen on security of supply, and if he was really in pursuit of diversification, the Government's record on energy efficiency would be more commendable. Our Government's record is the worst in the civilised world. The jobs which would have accrued had we copied the other countries of northern Europe would have made a substantial genuine contribution to reducing Britain's unemployment figures.

Some people believe that hon. Members who represent coalfield constituencies have only the interests of the coal industry at heart. Obviously I have. I am sponsored by the National Association of Colliery Overmen, Deputies and Shotfirers and I have a mining constituency, although it is much less a mining area than it was three years ago. There are more redundant miners in my constituency than there are people working in the coal industry. The number working in the industry is shrinking and could shrink to a dangerous level before long.

We must have diversity and give a higher priority to energy efficiency and conservation. At the same time, if the Secretary of State is sincere in his pursuit of security of supply, he must resist the blandishments of some of his hon. Friends and pay attention to that small band of Conservative Members who agree with our view and who are worried lest we develop a dependency on imported coal.

At present—the Under-Secretary of State knows this, even if he will not say so with the clarity that the situation requires—we are in a buyers' market in the world coal trade. But add 10 million tonnes, let alone 30 million tonnes, to the increased demand for coal in that market, and it will rapidly transform from a buyers' to a sellers' market, and I think I see the Under-Secretary nodding in agreement. That transformation could occur rapidly. Indeed, because of the antics of some people who cannot see further than the end of their noses, in the coming few years the British coal industry could be reduced to a tiny rump. Then we would not be able to meet our demand for coal and we would have to buy as world coal prices rise.

Today, world coal is available at $3, $5 or even more per tonne less than the cost of production at the colliery, before transport costs are incurred. It would be stupid for us to develop a reliance on imported coal while it is cheap, discounted and offered at a dumped price.

The action of the Government is not that of pure dogmatism. It is the action of an Administration who are worried about the level of trade deficit and international indebtedness. They believe that one answer to that problem—an answer which is also comfortable in a party political sense—is to rattle the begging bowls around the world and to dispose of an industry on the cheap, thereby creating problems, some of which we have mentioned in this debate, which the Secretary of State hopes will go away. If the right hon. Gentleman's first priority is security of supply, he cannot maintain the posture which dominates this part of the Bill.

I am glad that the hon. Member for Bedfordshire, North has provided us with an opportunity to discuss these issues. He appreciates, as do my hon. Friends and I, the way in which the research and development base in Britain is declining. He was right to express anxiety about that. Indeed, in 10 years time that may appear to have been the most important part of his speech. We are relying on others' research. Our nuclear programme demonstrates that we have turned our backs on some difficult and costly decisions. It seems to me that we are developing a dependency not merely on other people's research and other people's money but on other people's coal.

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

Is my hon. Friend aware that Mr. Malcolm Edwards, giving evidence to the Select Committee on Energy, said that, because of the Government's refusal to find £11 million to continue the research and development of the fluidised bed at Grimethorpe, it may have to be discontinued? If that happens thare will be very little research and development into such schemes.

10.45 pm

Mr. Hardy

I am delighted that my hon. Friend raised that point as it answers many of the comments that we have received from Conservative Back-Benchers. We are in favour of research and development in support of the environment for which the Prime Minister occasionally expresses some sympathy. If that research were to founder, the Government would be acting with the most abject irresponsibility.

When Conservative Members spoke at their counts after the last general election, they did not merely thank the 25, 30 or 35 per cent. of their electorates that voted for them, but made the point that they would be representing all the people in their constituency. As that obligation exists for every individual Conservative Member, surely the Government must accept that their responsibility is national and is not merely to the City of London and to the affluent and favoured areas of these islands. They should understand that they have inflicted on many communities in coalfield areas, particularly in the past three or four years, dereliction and devastation, the dampening and destruction of hope, the slaughter of jobs, the depression of wage rates and the creation of an environment which, unless something is done very soon, will cause further dismay and destruction.

For example, we still await decisions about derelict land grant. For the Government to embark on a further round of job destruction and annihilation—[Interruption.] It is no good the hon. Member for Dorset, South (Mr. Bruce) smirking. These islands are too small for the regional differences which he views with equanimity. It is time that he understood that hon. Gentlemen representing areas as far from the coalfield as his constituency are beginning to worry about the differences between one part of the country and another which are daily being exacerbated.

Mr. Ian Bruce

Will the hon. Gentleman give way?

Mr. Hardy

No, I shall not give way. The hon. Gentleman spoke for a long time and uttered a lot of nonsense and is not going to interrupt my concentration.

These islands are small and while hon. Gentlemen can happily engage in short-term calculations with no long-term wisdom whatsoever, in importing coal and destroying our communities. it would be not merely injurious to the Secretary of State's first priority, which is security of supply, but that short-term folly would bring about utter destruction and injury to our constituents. If Conservative Members resent our making such points because we come from the coalfields, that does not mean that our arguments are unjust or invalid. Our arguments have a great deal more wisdom than some of the points raised by Conservative Members. It is certainly time that the Secretary of State recognised that enough damage has been done and that further risk should not be incurred.

Mr. Beith

I shall concentrate on what the Secretary of State said. First, I acquit him of the charge that he played no useful part in Committee. At least he was on the Committee, which is more than can be said of the Secretary of State for the Environment in respect of the Water Bill. The Secretary of State illuminated some of the contradictions in the Bill, sometimes deliberately and openly, sometimes by accident, but he made a valuable contribution to the Committee and I do not agree with the charge that he did not.

I also agree with the key aspect of the Secretary of State's analysis of the industry now. The present system is indefensible. It has allowed the industry, as a monopoly supplier, to make decisions about investment without any real regard for the return on the investtment or the cost to the consumer. The Labour party would have perpetuated that system in an even worse form. I have vivid recollections of what it had in mind. It wanted to create a single nationalised monolithic industry under the leadership of Sir Francis Tombs, who has a greater reason than anyone not to vote for my party as it was I, with my late friend David Penhaligon and other colleagues, who refused to allow that proposal to pass during the Lib-Lab pact. Sir Francis Tombs thus never became the head of the single nationalised monolithic electricity industry that the Labour party preferred, although he has managed to carve out a lucrative career elsewhere. That system would have been even more damaging than the system that we now have. The current system has produced colossal excess capacity, especially in Scotland. The South of Scotland electricity board has more than double the capacity that it requires on the coldest day of the year.

The Secretary of State has failed to follow through his analysis in the shape that he is creating for the industry. He is in a ludicrous dilemma. He claims to be creating a market system for electricity while shielding nuclear power from that market. He is engaged in ensuring that shareholders do not take any risks. How can a market system work other than on the basis that shareholders have to take risks with their capital and are therefore concerned about the level of risk? The purpose of the Bill is to protect shareholders from any of the risks of investment in nuclear power. That is the contradiction at the heart of the matter.

The Minister referred to the two manifesto commitments that he and his colleagues made—to privatise electricity and to retain a substantial nuclear power industry. When they made those commitments they did not realise that they were incompatible. That discovery came later but the Minister and his colleagues decided to plough on and try to do both. They should have changed their minds and recognised, as we did long ago, that the protection and feather-bedding of the nuclear power industry is against the interests of the consumer.

The Minister criticised the investment decisions that were made in the past, but he and his colleagues did not oppose them at the time. When Labour Governments made crazy investment decisions, my hon. Friends and I were described, often by Labour Members, as the brown bread and sandals brigade because we objected to the absurdity of those decisions. Now the Minister, too, realises how absurd some of those decisions were, yet he has created a system in which such decisions can still be made—a system in which the disadvantages of nuclear power will be paid for by the consumers without any choice on their part. There is a higher cost and an incalculable level of risk involved in nuclear power. We all know that, although the risks of nuclear power are statistically smaller in incidence, they are incalculably greater in terms of the character of what is involved, as we all saw in the Chernobyl incident.

I shall not go into the many other problems with nuclear power, but one pressing problem that has been pointed out in some of the speeches today is the dependence on the creation of more green field site nuclear power stations. They are then sterilised for 100 years, for the reasons given by the hon. Member for Dorset, South (Mr. Bruce). All that is built into the Government's privatisation plan instead of being exposed to the market considerations to which they attach such importance.

When the Secretary of State talks about diversity of supply, why does he not look at the energy efficiency and energy conservation side of the problem? It is argued that the amount of expenditure involved in building one pressurised water reactor would yield many times that saving in output if it were invested in energy efficiency and energy conservation. If there is a danger that we may have insufficient power in certain circumstances, such as those of the millers' strike which the Minister described, we could take the precaution of investing in more efficient use of power and less use of power in some areas in which we are profligate with it now.

The Secretary of State sought to argue that the Government were being open about nuclear power and bringing about a situation in which we could make real choices, but I am profoundly worried about what will happen at future public inquiries on nuclear power stations, such as could take place in my own constituency because of the Druridge bay proposals. It will be argued that all the planning considerations must be swept aside because Parliament has decreed that there has to be a non-fossil fuel quota, so we have to have that and other nuclear power stations. There will be a distortion of the decisions in which local communities seek to be involved as they argue the case against nuclear power. We have seen signs of that already at the Hinkley Point inquiry and the provision may prove to be the destruction of future public inquiries into nuclear power.

The hon. Member for Bedfordshire, North (Sir T. Skeet) has gone to the heart of the illogicality of the Bill, arguing cogently that, if nuclear power is to be ring-fenced and singled out, as he wants it to be, it should remain in the public sector at least for the time being. I do not want it to be ring-fenced and protected, but I accept the logic of his argument—that if that is to be so, the place for the industry is with the Government, who are imposing all these conditions to protect it. It is significant that the examples produced by Conservative Members of the new interest in diversified nuclear power generation came from the public sector. They were drawn from the Atomic Energy Authority and British Nuclear Fuels plc, both of which have shown interest in nuclear power generation and both of which are in the public sector. As public sector bodies, they are putting forward such proposals on the basis that they would have a guaranteed return.

Mr. Ian Bruce

The reason why the Atomic Energy Authority wants to go ahead with research into a small, integrated reactor is that private enterprise, not the Government, will provide the funds to carry out that research and build that power station.

Mr. Beith

That is only because its shareholders will be protected to the ludicrous extent provided in the Bill. It is as though a Government about to introduce a breathalyser announced widely that a previously unknown device was to be required by police forces all over the country and that any company which decided to manufacture them would have its shareholders protected from any risk that its particular version would go wrong. The Government are creating the market and protecting the shareholders who go into it. That cannot make sense by the Government's own standards, and it makes no sense by ours.

Mr. Alan W. Williams (Carmarthen)

I want to outline some of my criticisms. I support the proposal to keep nuclear power in the public sector and my main concern is with nuclear safety. Since Chernobyl, the British public has become aware that nuclear reactors can go badly wrong and completely out of control. In the 1960s and 1970s the industry used to argue that so many fail-safe systems were installed in reactors that they could not go out of control. But they can and not merely once in every 1 million or 1,000 million reactor years, as the industry would have us believe.

We have had two major catastrophes, at Three Mile Island and Chernobyl, in 3,000 reactor years of experience. The statistics show that reactors will go wrong once every 1,500 reactor years. That means that if we build a pressurised water reactor with a design lifetime of 40 years at Hinkley Point, there is a one in 40 chance that it will become a Chernobyl or a Three Mile Island—and that goes for every pressurised water reactor that we build. The safety of nuclear reactors must be paramount and I am certain that the British public feel that they will be run more safely in the public sector than in private ownership, where a profit will be sought.

Once the industry is privatised, there is no question but that de-manning will follow. There will be pressure to cut the number of staff. Curiously, nuclear power stations are labour-intensive. For the same power output, nuclear power stations employ twice the number of staff of fossil-fuel power stations. Therefore, the pressure to shed staff will be all the more severe in nuclear power stations and that must mean compromises on safety.

11 pm

I shall be brief because of the time, but I too have strong reservations about decommissioning, nuclear waste and about the fate of the plutonium recovered by reprocessing. With decommissioning, we are talking about a time scale of 100 years or more. When we remember the time scale it strikes me as irresponsible to hand to private industry the important task of decommissioning.

The same goes for nuclear wastes, which we must keep from the environment, not for 100 years but for hundreds of thousands of years. Again, it is the height of irresponsibility to pass the safeguarding of such wastes to the private sector. Under the Bill plutonium will become private property. About 20 tonnes of plutonium will be handed over to private companies.

I turn now to economics and echo some of the points made earlier by the hon. Member for Bedfordshire, North (Sir T. Skeet) when he moved his new clause. What exactly will National Power be buying when it buys the nuclear industry? Well, it will be buying 10 Magnox reactors and five advanced gas-cooled reactors. That is the bargain. Of the 10 Magnox reactors, Berkeley is already closed, Hunterston is due for closure and the other eight will all be closed during the 1990s. The Magnox reactors are a fleet of old crocks. That is what is being sold off.

We heard the Secretary of State himself make critical comments on the AGR programme. Dungeness is a legend on its own. It took over 20 years to build. Three of the other five AGRs are clearly performing poorly. They are lame duck reactors.

The proposal to build four PWRs is a speculative venture because they are large reactors and their future economics is uncertain. The City of London knows that nuclear power is uneconomic. The figures that we received in Standing Committee from John Baker of the CEGB showed that at 5p per unit nuclear electricity is 40 per cent. more expensive than electricity from coal at 3.5 pence per unit.

It is clear that nuclear power is the Achilles heel of the Bill. There is the danger that, in the flotation, the distribution companies and PowerGen may go all right, but that National Power, with its 20 per cent. nuclear component, may be unmarketable.

I ask my hon. Friends to support the new clause tabled by the hon. Member for Bedfordshire, North and I hope that he will also receive a lot of support from his own party.

Finally, I should like to draw attention to the document that we have all received today from the Confederation of British Industry. It is rare that I support anything from the CBI but, for different reasons, on this issue we are in agreement. Safety is the paramount issue to the general public and I believe that privatising nuclear power stations is irresponsible purely on safety grounds.

Mr. David Tredinnick (Bosworth)

My remarks will be brief, as time is pressing on. I have attended most of the debate.

I cannot support the new clause. It is logical and desirable to include the nuclear industry in the privatisation measure now. I want the industry to be privatised in its entirety at once. It is quite right to do so. It is right also to have a non-fossil fuel obligation, with 15 to 20 per cent. generation coming principally from nuclear power. We cannot risk one supply of energy holding us to ransom. That occurred during two long strikes.

The significant point about the non-fossil fuel obligation is that provision has been made by my right hon. Friend the Secretary of State for renewable sources of energy. I look forward to renewable sources being part of that non-fossil fuel obligation.

I support also the non-fossil fuel levy. For the first time, the cost of generating electricity from different fuel sources will be crystal clear for all to see. That is a great step forward. It is vital to share any additional nuclear costs between the area boards. It is quite right for my right hon. Friend to stipulate that.

There was much talk in Committee about the so-called future nuclear levy. That is absurd as consumers are already paying for nuclear power through the current electricity pricing structure. Of course, customers have been paying a coal levy for over 30 years, as the CEGB has been paying over the market price for British coal. The Opposition cannot escape that fact.

Mr. Martin Redmond (Don Valley)

Will the hon. Gentleman give way?

Mr. Tredinnick

I will not give way.

It is vital that the nuclear industry is privatised now, particularly as we move towards 1992, when the single European market will be with us. We will have a more efficient nuclear industry, and that will be better for consumers, the country and for all of us.

Mr. Ieuan Wyn Jones (Ynys MÔn)

This has been art extremely wide-ranging debate.[Interruption.] I remind hon. Members that I have been present for most of the debate, and I have listened carefully to all the arguments that have been advanced. I even listened carefully to the excellent speech of the hon. Member for Bassetlaw (Mr. Ashton). There has been little support by Conservative Members for the new clause which was put down by the hon. Member for Bedfordshire, North (Sir T. Skeet). I listened carefully also to what he had to say.

There is one matter which I should like the Secretary of State to clarify. He made it clear that the Government have an unqualified commitment to build four new PWR stations. I assume that he is prepared to assure the House that that is subject to the normal planning inquiries. I ask him to confirm that there will be public inquiries into the proposals. As he is aware, there is a proposal to build a nuclear power station in my constituency. My constituents would welcome an assurance tonight.

I shall concentrate briefly on the consequences of privatisation for jobs in the nuclear sector. It has already been said that privatisation has consequences for jobs. It is clear that, in putting forward its plans for a nuclear power station in my constituency, the CEGB stressed the economic benefits in terms of jobs and investment that will occur. Irrespective of the arguments for or against nuclear power, the CEGB knows that the only way that it can persuade people in my constituency to support that proposal is on economic grounds—jobs, infrastructure and investment. There remain a number of question marks about that commitment, because already in readiness for privatisation there are changes in the working structures within the Magnox station in my constituency. There is a shift away from full-time maintenance staff to contractors, many of whom come from outside the area.

When the CEGB announced that there would be an application for a nuclear power station in my constituency, we were told that at the height of the building programme 3,500 jobs would be created. That was dangled as a carrot in front of the people who would consider the planning application. Consequently, the CEGB considered that that should have been sufficient for us to accept the building of a nuclear power station. However, the problem is that the CEGB says that only half of those temporary jobs—1,750—will be created locally. It is clear that people within the county of Gwynedd would be capable of undertaking the task, but the CEGB is not prepared to give them the opportunity. That is irrespective of the argument for or against nuclear power.

The privatisation programme is making it impossible for the CEGB to overcome the problems presented by the economic case. My constituents feel very much like pawns in the game. They wonder whether the indemnity given to nuclear power under the Bill will be a temporary commitment that will allow National Power to build those nuclear power stations or whether it will be a continuing one. There will not only be the initial investment and the building costs, but there will be ongoing costs for at least 20 years during the useful life of a nuclear power station and the decommissioning costs at the end. That is why I believe that there are great dangers involved in privatising the industry and why I believe that the House should support the new clause.

Mr. Parkinson

I shall be brief, but I feel that I owe it to the House to reply to a number of specific points. I am glad to see that the hon. Member for Bassetlaw (Mr. Ashton) is back in his place, because I wanted to deal with his point about West Burton power station.

As a result of the Bill, the obligation to supply is being switched from the Central Electricity Generating Board —the generator—to the area boards. That means that in future the generating companies will be able to build power stations only if they can find a customer for the electricity. In the past, because they had the obligation to supply, they decided on the technology, the site and the size. If it turned out that they had over-estimated and that the industry did not need the power station, we still paid. In future, they will be able to build a power station only if they can find a customer for the electricity. I believe that at present they are negotiating with the area boards to seee if they will buy the electricity that West Burton could produce. This is an inevitable consequence of the change in the obligation to supply. If the hon. Member for Bassetlaw would like to discuss it with me, as he suggested, I should be happy to meet him.

The hon. Member for Pontypridd (Dr. Howells), in a very good speech, the hon. Member for Wentworth (Mr. Hardy) and the hon. Member for Midlothian (Mr. Eadie) made the point that, because there is a non-fossil fuel obligation, that is evidence of an anti-coal attitude. We do not regard it as any such thing. The non-fossil fuel obligation will fix the level of electricity from nuclear sources at exactly the same level as at present—15 to 20 per cent. of the market. That means that 80 to 85 per cent. of the market will be supplied from fossil fuel sources.

In future, coal has the same possibilities as it has now. The difference will be that the generators will be able to buy their coal where they will. As the hon. Member for Wentworth has said, however, if a major purchaser went into the fairly small international market for steam coal, that would have a spectacular effect on prices. We believe that the prospects are extremely good for the British coal industry.

Mr. Hardy

I am grateful to the right hon. Gentleman for that comment, but does he accept that some overseas suppliers will be prepared to face a continuing loss to ensure the destruction of British capacity?

Mr. Parkinson

A number of things work in favour of the British coal industry: first, its location; secondly, the fact that it is extremely well equipped; and, thirdly, the facilities do not exist to handle huge imports of coal. For those reasons, the market is open to British coal and I believe that it will supply a substantial part of the market.

11.15 pm

The hon. Member for Carmarthen (Mr. Williams) talked about safety and is worried that the industry will be less safe in the private sector. The safety standards will not be relaxed. The nuclear inspectorate is an independent body, and it will supervise the industry as it does now. There will be no change in the codes of safety, the standards expected or the supervision of them. The hon. Gentleman mentioned the two major incidents at Three Mile Island and Chernobyl. Three Mile Island was a privately owned power station and Chernobyl was state owned. It is a question not of who owns a power station, but of how it is built, supervised and operated. Standards will be enforced as rigorously in the private sector as they would be in the public sector.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) mentioned planning and suggested that, in future, things will be much easier for those who wish to build nuclear power stations. I do not see that happening. Perhaps we will reach the stage where every application for a nuclear power station will not result in a debate on whether we should have nuclear power. However, whether the location suggested is correct and whether the technology used is correct will still need to be settled. If there is a demand for a public inquiry—the hon. Gentleman knows how such inquiries come about—it must be held. The legislation will not short-circuit the planning system as suggested by the hon. Member for Ynys MÔn (Mr. Jones).

The Government have no plans to build any nuclear power stations. We are planning to get out of the business of being responsible for the building of power stations. The non-fossil fuel obligation means that we shall need about four PWRs if we are to continue with the same level of electricity generated from nuclear power. Where they will be and what they will be is a matter for the generating companies that apply to build them. There will be no short-circuiting of the planning system, which must be followed properly.

I made a long speech earlier tonight and I have attempted to answer some of the points raised since I spoke. I conclude by thanking my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) for the way in which he moved his new clause. He did so in an interesting, almost intimidating, fashion, and it is a disappointment to me that I have to advise my right hon. and hon. Friends to vote against him. I am only sorry that I am unable to accept the new clause, and I hope that my hon. Friend will not feel too lost as he goes into the other Lobby with Opposition Members.

Mr. Barron

We heard the thanks of the Secretary of State to the hon. Member for Bedfordshire, North (Sir T. Skeet) for his earlier speech on new clause 3, which will no doubt be repeated during the next 12 months or more, prior to the flotation of the electricity industry, if the Bill becomes an Act. It is ironic in many ways that they seem to be on the same side, while both purporting to be major exponents of the nuclear power industry in their different ways.

The speech of the hon. Member for Bedfordshire, North was enjoyed by hon. Members from both sides of the House, but perhaps a little more quietly by Conservative Members than Opposition Members. It will probably go down as a memorable speech, although perhaps not as memorable as the speech mentioned by my hon. Friend the Member for Pontypridd (Dr. Howells), which was made in the other House a few years ago, and which mentioned the selling of the family silver. I cannot remember what position the hon. Member for Bedfordshire, North took on that matter at the time but I think we can see what his position is on the selling of the family plutonium. He appears to be against that, and to wish it could be kept in the public sector.

We discussed the nuclear levy at some length in Committee, and highlighted the effect that it would have on consumers' bills. An amendment was tabled by the Opposition but was fortunately defeated. In that debate the Minister said that he would not accept the amendment because National Power would publish separate, full accounts for its nuclear business when it publishes its main accounts. Most people do not see the accounts of businesses such as National Power unless they are politicians, have a vested interest, or perhaps know a local librarian who is interested in them.

Earlier today the Secretary of State said that the cost of nuclear power would be transparent and that the transparency would, apparently, go no further at this stage than the annual accounts, of National Power. There is no doubt that new clause 16 would involve much more than the national accounts, of National Power, which we assume will be published annually. Without being able to see those accounts most people will be unable to see how uneconomic the nuclear industry is at present. Without the protection afforded to the nuclear industry by the Bill, I and many others are sure that consumers and producers would resist the nuclear industry, and would, instead, concentrate more on debates about developing our resources for renewable energy.

I was pleased that the Secretary of State said that the non-fossil fuel obligation of between 15 per cent. and 20 per cent. would be highlighted. We shall watch with great interest to see what percentage the Government believe that they should aim for. We shall also watch how much research and development the Government put into that area to ensure that targets set are feasible.

I should also like to see the developing and sustaining of the British coal industry—more so within a national and rational energy policy, which is now absent. At this stage, the Government seem prepared to plan energy in terms of nuclear and some small renewables, but not in terms of the rest of the country. We are firmly against that and believe that it highlights a great contradiction in the Government's flotation of the electricity industry. The Government have obviously failed to convince many people in the country that selling off the nuclear power industry is in their interests. We shall wait to see what happens to it when we come closer to the flotation date.

The nuclear levy is another tactic for sustaining the industry. We have been told that while nuclear power might be more expensive now—an admission that has come only in the past 18 months—we must wait because in the future it may seem better when compared to fossil fuel.

In October 1987, when the matter first came to light, Lord Marshall spoke of "jam tomorrow". The Minister has said that if nuclear power were "transparent", as the Secretary of State would wish—and as I would wish even more strongly—10 per cent. on our domestic electricity bills would be shown to be due to it. The CEGB's forecast, which has been highlighted by Opposition Members,, suggests that the PWRs at Sizewell and at Hinkley, one of which is under construction, will for the foreseeable future also be more expensive than coal. Consumers have been offered not jam today or jam tomorrow, but, perhaps, no jam at all.

The Secretary of State argued for diversity as the basis for security of supply. Can he picture someone sitting at home, eating a meal cooked on an electric cooker, watching television or perhaps listening to music on the radio? How many people using consumer goods at home wonder how much electricity for them has come from nuclear fuel, how much from renewable fuel and how much from fossil fuel—coal, oil or gas? It is nonsense to suggest that people are concerned about diversity. What people are concerned about is security of supply. The other thing that concerns them is cost—and, as I have said, what the Bill offers is not jam today, tomorrow or in the foreseeable future, but extra costs on electricity bills from nuclear generation.

The Secretary of State told the Committee: diversity may have its price. We are prepared to identify, and justify, that price."—[Official Report, Standing Committee E, 7 February 1989; c. 736.] Many Opposition Members feel that the Government have not done that. We cannot see how diversity can be used as a justification for putting up electricity prices now.

The Secretary of State also said in Committee that the cost of coal was a secondary consideration for the CEGB. The right hon. Gentleman knows better than anyone that in 1986, after the fall in the oil price, British Coal immediately lowered it price to the CEGB, which it has consistently done since then. In real terms, the cost of British coal to the electricity industry has been reduced. It is not the burden that hon. Members have described.

That price is an important consideration can be seen from the offer made by British Coal to the new generating companies—long-term contracts below or within the RPI for the next five or 10 years. That offer has been made nowhere else. In the past 12 months there has been a reduction in the coal price of some 30 per cent. in real dollar terms, and that is likely to continue. Everyone knows that if the new generators went on to the market now there would be colossal balance of payments problems, and also an increase in world coal prices. That is not an option for Britain at this time.

My hon. Friend the Member for Bassetlaw (Mr. Ashton) mentioned the Humber ports. Today we have seen for the first time the report from the Committee on the Associated British Ports (No. 2) Bill. In what, as the Secretary of State knows, is a preamble to its decision, the Committee says: In our view it is the Government's duty to take whatever steps are necessary, in the overall national interest, to protect the indigenous coal-mining industry. That is what we hope that the Minister will do. Rather than merely speaking at the Dispatch Box, we want him to make sure that there is as much protection for the British coal industry as there has been for the nuclear industry.

11.30 pm

The Secretary of State for Energy said earlier today that his party had been elected on a commitment to maintain nuclear power. He got it nearly right: his party was elected on this commitment, but the Conservative party campaign guide for 1987 said: More nuclear power means that the rise in demand for electricity can be met cheaply and effectively", and the Conservative manifesto of 1987 said: We intend to go on playing a leading role in the task of developing abundant, low-cost supplies of nuclear electricity". Neither of those got it right, as might have been clear for the last 30 years if there had been the transparency for which the Secretary of State now argues.

What the Government have been saying is commonly not the case. There is a central contradiction in what the Government stand for in relation to privatisation. They will feather-bed the nuclear industry, whether in respect of decommissioning, day-to-day running, or investment in the new PWRs. In Committee the Secretary of State said of the nuclear industry: If there is a price to pay, we are prepared to pay it."— [Official Report, Standing Committee E, 7 February 1989; c 738.] Well, we in the Opposition believe that that price is one that the nation cannot afford, and we will oppose this sale.

Sir. Trevor Skeet

We have had a good debate. This is a major issue, and I think the House should divide.

Question put, That the clause be read a Second time.

The House divided: Ayes 199, Noes 254.

Division No. 141]	[11.31 pm
AYES
Abbott, Ms Diane	Fisher, Mark
Adams, Allen (Paisley N)	Flannery, Martin
Allen, Graham	Flynn, Paul
Alton, David	Foot, Rt Hon Michael
Archer, Rt Hon Peter	Foster, Derek
Armstrong, Hilary	Foulkes, George
Ashdown, Rt Hon Paddy	Fraser, John
Ashton, Joe	Fyfe, Maria
Banks, Tony (Newham NW)	Galbraith, Sam
Barnes, Harry (Derbyshire NE)	Garrett, John (Norwich South)
Barnes, Mrs Rosie (Greenwich)	Garrett, Ted (Wallsend)
Barron, Kevin	Gilbert, Rt Hon Dr John
Battle, John	Godman, Dr Norman A.
Beckett, Margaret	Golding, Mrs Llin
Beith, A. J.	Gould, Bryan
Bell, Stuart	Graham, Thomas
Benn, Rt Hon Tony	Grant, Bernie (Tottenham)
Bennett, A. F. (D'nt'n & R'dish)	Griffiths, Nigel (Edinburgh S)
Bermingham, Gerald	Griffiths, Win (Bridgend)
Bidwell, Sydney	Grocott, Bruce
Blair, Tony	Hardy, Peter
Blunkett, David	Harman, Ms Harriet
Boateng, Paul	Haynes, Frank
Boyes, Roland	Henderson, Doug
Bradley, Keith	Hinchliffe, David
Bray, Dr Jeremy	Hogg, N. (C'nauld & Kilsyth)
Brown, Gordon (D'mline E)	Home Robertson, John
Brown, Nicholas (Newcastle E)	Hood, Jimmy
Brown, Ron (Edinburgh Leith)	Howarth, George (Knowsley N)
Bruce, Malcolm (Gordon)	Howells, Dr. Kim (Pontypridd)
Buchan, Norman	Hoyle, Doug
Buckley, George J.	Hughes, John (Coventry NE)
Caborn, Richard	Hughes, Robert (Aberdeen N)
Callaghan, Jim	Hughes, Sean (Knowsley S)
Campbell, Menzies (Fife NE)	Hughes, Simon (Southwark)
Campbell, Ron (Blyth Valley)	Illsley, Eric
Campbell-Savours, D. N.	Ingram, Adam
Canavan, Dennis	Janner, Greville
Carlile, Alex (Mont'g)	Jones, Barry (Alyn & Deeside)
Cartwright, John	Jones, Ieuan (Ynys MÔn)
Clark, Dr David (S Shields)	Jones, Martyn (Clwyd S W)
Clarke, Tom (Monklands W)	Kennedy, Charles
Clay, Bob	Kilfedder, James
Clelland, David	Kinnock, Rt Hon Neil
Clwyd, Mrs Ann	Kirkwood, Archy
Cohen, Harry	Lambie, David
Coleman, Donald	Leighton, Ron
Cook, Robin (Livingston)	Lewis, Terry
Corbett, Robin	Litherland, Robert
Corbyn, Jeremy	Livsey, Richard
Cousins, Jim	Lloyd, Tony (Stretford)
Crowther, Stan	Lofthouse, Geoffrey
Cryer, Bob	McAllion, John
Cummings, John	McAvoy, Thomas
Cunliffe, Lawrence	Macdonald, Calum A.
Cunningham, Dr John	McFall, John
Darling, Alistair	McKelvey, William
Davies, Rt Hon Denzil (Llanelli)	McLeish, Henry
Davies, Ron (Caerphilly)	McWilliam, John
Dewar, Donald	Madden, Max
Dixon, Don	Mahon, Mrs Alice
Doran, Frank	Marek, Dr John
Douglas, Dick	Marshall, David (Shettleston)
Duffy, A. E. P.	Marshall, Jim (Leicester S)
Dunnachie, Jimmy	Martlew, Eric
Dunwoody, Hon Mrs Gwyneth	Maxton, John
Eadie, Alexander	Meacher, Michael
Eastham, Ken	Meale, Alan
Evans, John (St Helens N)	Michie, Bill (Sheffield Heeley)
Ewing, Harry (Falkirk E)	Michie, Mrs Ray (Arg'l & Bute)
Fatchett, Derek	Mitchell, Austin (G't Grimsby)
Faulds, Andrew	Moonie, Dr Lewis
Fearn, Ronald	Morgan, Rhodri
Field, Frank (Birkenhead)	Morley, Elliott

Mowlam, Marjorie	Smith, Andrew (Oxford E)
Mullin, Chris	Smith, C. (Isl'ton & F'bury)
Murphy, Paul	Spearing, Nigel
O'Brien, William	Steel, Rt Hon David
Orme, Rt Hon Stanley	Steinberg, Gerry
Parry, Robert	Stott, Roger
Patchett, Terry	Strang, Gavin
Pike, Peter L.	Taylor, Mrs Ann (Dewsbury)
Powell, Ray (Ogmore)	Taylor, Matthew (Truro)
Prescott, John	Thompson, Jack (Wansbeck)
Quin, Ms Joyce	Turner, Dennis
Radice, Giles	Vaz, Keith
Randall, Stuart	Wall, Pat
Redmond, Martin	Wallace, James
Rees, Rt Hon Merlyn	Wardell, Gareth (Gower)
Reid, Dr John	Welsh, Michael (Doncaster N)
Richardson, Jo	Wigley, Dafydd
Roberts, Allan (Bootle)	Williams, Rt Hon Alan
Robertson, George	Williams, Alan W. (Carm'then)
Robinson, Geoffrey	Wilson, Brian
Rogers, Allan	Winnick, David
Rooker, Jeff	Worthington, Tony
Ross, Ernie (Dundee W)	Young, David (Bolton SE)
Ruddock, Joan
Sedgemore, Brian	Tellers for the Ayes:
Shore, Rt Hon Peter	Mr. Robert N. Wareing and Mr. Allen McKay.
Skeet, Sir Trevor
Skinner, Dennis

NOES
Adley, Robert	Conway, Derek
Aitken, Jonathan	Coombs, Anthony (Wyre F'rest)
Alison, Rt Hon Michael	Coombs, Simon (Swindon)
Allason, Rupert	Couchman, James
Amess, David	Cran, James
Amos, Alan	Currie, Mrs Edwina
Arnold, Jacques (Gravesham)	Curry, David
Aspinwall, Jack	Davis, David (Boothferry)
Atkins, Robert	Day, Stephen
Atkinson, David	Devlin, Tim
Baldry, Tony	Dicks, Terry
Banks, Robert (Harrogate)	Dorrell, Stephen
Batiste, Spencer	Douglas-Hamilton, Lord James
Beaumont-Dark, Anthony	Dover, Den
Bellingham, Henry	Dunn, Bob
Bendall, Vivian	Durant, Tony
Bennett, Nicholas (Pembroke)	Dykes, Hugh
Benyon, W.	Fallon, Michael
Bevan, David Gilroy	Favell, Tony
Blackburn, Dr John G.	Fenner, Dame Peggy
Blaker, Rt Hon Sir Peter	Field, Barry (Isle of Wight)
Boscawen, Hon Robert	Finsberg, Sir Geoffrey
Boswell, Tim	Fishburn, John Dudley
Bottomley, Peter	Fookes, Dame Janet
Bottomley, Mrs Virginia	Forman, Nigel
Bowden, A (Brighton K'pto'n)	Forsyth, Michael (Stirling)
Bowden, Gerald (Dulwich)	Forth, Eric
Boyson, Rt Hon Dr Sir Rhodes	Fox, Sir Marcus
Braine, Rt Hon Sir Bernard	Franks, Cecil
Brandon-Bravo, Martin	French, Douglas
Brazier, Julian	Gale, Roger
Bright, Graham	Garel-Jones, Tristan
Brooke, Rt Hon Peter	Gill, Christopher
Brown, Michael (Brigg & Cl't's)	Goodlad, Alastair
Browne, John (Winchester)	Grant, Sir Anthony (CambsSW)
Bruce, Ian (Dorset South)	Grist, Ian
Buck, Sir Antony	Hamilton, Neil (Tatton)
Burns, Simon	Hampson, Dr Keith
Butcher, John	Hannam, John
Carlisle, John, (Luton N)	Hargreaves, A. (B'ham H'll Gr')
Carlisle, Kenneth (Lincoln)	Hargreaves, Ken (Hyndburn)
Carrington, Matthew	Harris, David
Carttiss, Michael	Haselhurst, Alan
Cash, William	Hayes, Jerry
Chapman, Sydney	Hayhoe, Rt Hon Sir Barney
Chope, Christopher	Hayward, Robert
Churchill, Mr	Hicks, Mrs Maureen (Wolv' NE)
Clark, Dr Michael (Rochford)	Higgins, Rt Hon Terence L.
Clark, Sir W. (Croydon S)	Hill, James
Clarke, Rt Hon K. (Rushcliffe)	Hind, Kenneth

Hogg, Hon Douglas (Gr'th'm)	Porter, David (Waveney)
Hordern, Sir Peter	Portillo, Michael
Howard, Michael	Powell, William (Corby)
Howarth, Alan (Strat'd-on-A)	Price, Sir David
Howarth, G. (Cannock & B'wd)	Raison, Rt Hon Timothy
Howell, Rt Hon David (G'dford)	Rathbone, Tim
Howell, Ralph (North Norfolk)	Redwood, John
Hughes, Robert G. (Harrow W)	Renton, Tim
Hunt, David (Wirral W)	Rhodes James, Robert
Hunt, John (Ravensbourne)	Riddick, Graham
Irvine, Michael	Rifkind, Rt Hon Malcolm
Jack, Michael	Roberts, Wyn (Conwy)
Jackson, Robert	Rost, Peter
Janman, Tim	Rowe, Andrew
Johnson Smith, Sir Geoffrey	Rumbold, Mrs Angela
Jones, Robert B (Herts W)	Ryder, Richard
Jopling, Rt Hon Michael	Sainsbury, Hon Tim
Kellett-Bowman, Dame Elaine	Sayeed, Jonathan
Key, Robert	Shaw, David (Dover)
Kirkhope, Timothy	Shaw, Sir Giles (Pudsey)
Knapman, Roger	Shaw, Sir Michael (Scarb')
Knight, Greg (Derby North)	Shelton, Sir William
Knight, Dame Jill (Edgbaston)	Shephard, Mrs G. (Norfolk SW)
Knowles, Michael	Shepherd, Colin (Hereford)
Lamont, Rt Hon Norman	Smith, Sir Dudley (Warwick)
Lang, Ian	Soames, Hon Nicholas
Latham, Michael	Speed, Keith
Lawrence, Ivan	Speller, Tony
Lee, John (Pendle)	Spicer, Sir Jim (Dorset W)
Lennox-Boyd, Hon Mark	Spicer, Michael (S Worcs)
Lester, Jim (Broxtowe)	Squire, Robin
Lightbown, David	Stanbrook, Ivor
Lilley, Peter	Stanley, Rt Hon Sir John
Lloyd, Peter (Fareham)	Stern, Michael
Lord, Michael	Stevens, Lewis
Lyell, Sir Nicholas	Stewart, Allan (Eastwood)
Maclean, David	Stewart, Andy (Sherwood)
McLoughlin, Patrick	Stradling Thomas, Sir John
McNair-Wilson, Sir Michael	Sumberg, David
Madel, David	Summerson, Hugo
Malins, Humfrey	Taylor, Ian (Esher)
Mans, Keith	Taylor, John M (Solihull)
Maples, John	Temple-Morris, Peter
Marlow, Tony	Thompson, D. (Calder Valley)
Marshall, John (Hendon S)	Thompson, Patrick (Norwich N)
Martin, David (Portsmouth S)	Thorne, Neil
Mates, Michael	Thornton, Malcolm
Maxwell-Hyslop, Robin	Thurnham, Peter
Mellor, David	Townsend, Cyril D. (B'heath)
Meyer, Sir Anthony	Tracey, Richard
Miller, Sir Hal	Tredinnick, David
Mills, Iain	Trippier, David
Miscampbell, Norman	Trotter, Neville
Mitchell, Andrew (Gedling)	Twinn, Dr Ian
Mitchell, Sir David	Vaughan, Sir Gerard
Moate, Roger	Viggers, Peter
Montgomery, Sir Fergus	Waddington, Rt Hon David
Morris, M (N'hampton S)	Walden, George
Morrison, Sir Charles	Waller, Gary
Moss, Malcolm	Ward, John
Moynihan, Hon Colin	Warren, Kenneth
Mudd, David	Watts, John
Neale, Gerrard	Wells, Bowen
Needham, Richard	Wheeler, John
Nelson, Anthony	Whitney, Ray
Neubert, Michael	Widdecombe, Ann
Nicholls, Patrick	Wilkinson, John
Nicholson, Emma (Devon West)	Wilshire, David
Norris, Steve	Winterton, Mrs Ann
Onslow, Rt Hon Cranley	Winterton, Nicholas
Oppenheim, Phillip	Wolfson, Mark
Page, Richard	Wood, Timothy
Paice, James	Woodcock, Mike
Parkinson, Rt Hon Cecil	Yeo, Tim
Patnick, Irvine	Young, Sir George (Acton)
Patten, Chris (Bath)
Pattie, Rt Hon Sir Geoffrey	Tellers for the Noes:
Peacock, Mrs Elizabeth	Mr. David Heathcoat-Amory and Mr. Tom Sackville.
Porter, Barry (Wirral S)

Question accordingly negatived.

Further consideration of the Bill adjourned.—[Mr. Kenneth Carlisle.]

Bill, as amended (in the Standing Committee), to be further considered tomorrow.

11.44 pm

Mr. Alan Williams (Swansea, West)

On a point of order, Mr. Deputy Speaker. You may have heard reports, but because of the duties you have been performing this evening you will not have had an opportunity to see for yourself. Therefore, we want to allow you time to consider this.

This evening, on television, there has been a series of reports of an interview by Sir Leon Brittan relating to the Westland affair. In it he said that the release of the Solicitor-General's letter was approved by Charles Powell, the relevant private secretary at No. 10, and by Mr. Bernard Ingham, the Prime Minister's press secretary and that there would have been no question of a release of that document without that express approval from No. 10.

Yet in his evidence, reported in the fourth report of the Select Committee on Defence—[Interruption.] I am sorry; Conservative Members must understand that we have rights in the House as well.[Interruption.] A majority of 100 does not constitute absolute rights to dictate what happens.

The fourth report of the Select Committee on Defence, said in paragraph 203: Mr. Brittan told us that he had no discussion with anyone in No. 10 before the disclosure. We have a clear conflict of evidence in which there may have been a serious injustice done to the House by Sir Leon and/or by the Prime Minister.

I understand, Mr. Deputy Speaker, that you cannot give us a ruling this evening on the most appropriate way in which we should proceed to inquire into it, but it is a matter of enormous severity, as you will understand. May I ask that tomorrow afternoon you or Mr. Speaker, at the appropriate time, give advice to the House on how to pursue the issue?

Mr. Ivan Lawrence (Burton)

Further to the point of order, Mr. Deputy Speaker. Is it not a fact that that interview took place before Christmas, that it was not considered—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. I do not think that the hon. and learned Gentleman should proceed to debate the matter. I recognise the importance that the right hon. Member for Swansea, West (Mr. Williams) attaches to what he has said to the House. If he believes that questions of privilege are involved, he knows that it is a matter on which he should write to Mr. Speaker. I shall in any event make sure that Mr. Speaker is aware of what has been said on this occasion.

Mr. Lawrence

May I be heard, Mr. Deputy Speaker, as you heard the right hon. Gentleman?

Mr. Deputy Speaker

Mr. Lawrence.

Mr. Lawrence

If it is a fact that that interview took place before Christmas and—

Mr. Deputy Speaker

Order. I thought that I had made it clear to the hon. and learned Gentleman that I was not prepared to allow a debate on what had been said. That is precisely what the hon. and learned Gentleman is seeking to embark upon.