HC Deb 20 July 1989 vol 157 cc593-612

".—(1) The Secretary of State shall exercise the power conferred on him by section 5 of the Science and Technology Act 1965 (expenditure on research and development in science or technology) for the purpose of promoting such research into, and such development of, new techniques relating to the generation, transmission or supply of electricity as appears to him to be necessary in the national interest.

(2)The Secretary of State may, if he considers it expedient for purposes connected with the performance of his duty under this section, serve notice under this subsection on any licence holder or any person who is authorised by an exemption to generate or supply electricity.

(3)A notice under subsection (2) above may require the person on whom it is served to furnish, at a time and place specified in the notice, to the Secretary of State such information about that person's business as may be so specified.

(4)Subsections (3), (5) and (7) to (9) of section 94 above shall apply for the purposes of this section as they apply for the purposes of that section."

Amendment (a), in line 15, leave out `(3)'.

Mr. Malcolm Bruce

As the Minister will realise, the purpose of the amendment is to delete subsection (3) of Lords amendment No. 90. It is an attempt to get some clarification from the Minister about what the other place had in mind when it required the person on whom the notice is served to furnish, at a time and place specified in the notice, to the Secretary of State such information about that person's business as may be so specified. The Minister will understand that, to somebody with my background, that is a rather sweeping statement, which gives ill-defined powers to require information, for no clear purpose. To put it in a more populist expression, the purpose of my probing amendment is to assert the importance of freedom of information.

What information will be sought? Should it not be more clearly defined? What assurances do we have that the notices will not lead to the seeking of information that is not necessary or relevant? There could be an unwarranted interference because the person in question may not wish to disclose the information and may not feel it necessary or relevant. There could be an unwarranted interference because the person in question may not wish to disclose the information and may not feel it necessary to disclose it, but he might be penalised if he does not. This is an attempt to clarify the position. If the Government accept all of the new clause, what does subsection (3) mean? Would not the clause be better without it?

Mr. Michael Spicer

Amendments Nos. 6 and 90 concern a subject that was discussed at length in Committee—research and development and the impact that the Bill will have on it. The effect of Lords amendment No. 6 is to require the director general and the Secretary of State to take research and development into account when exercising their functions under part I. The essence of the new clause in Lords amendment No. 90, which implements recommendations expressed in another place, is to be found in subsection (1), which places a duty on the Secretary of State to use his powers to support research and development under the Science and Technology Act 1965, for the purpose of promoting research and development of new techniques relating to the generation, transmission or supply of electricity as it appears to him to be necessary in the national interest.

After privatisation, the electricity industry may focus on near market and operational research and development. The practical significance of the new clause will be limited to long-term research and development. That is the first answer to the point put by the hon. Member for Gordon (Mr. Bruce) about how open ended all this is. It will require the Secretary of State to fill in any gaps that he feels should be filled in in the national interest. In order to discharge this duty, the Secretary of State will need to know what the industry is doing, so subsections (2) and (3) provide a reserve information-gathering power to enable the Secretary of State to get information from electricity licensees, or those exempted from the need to have a licence, about their relevant research and development programmes. Subsection (4) deals with the confidentiality of the information so provided and enforcement.

The answer to the hon. Member for Gordon is that there has to be a specific reason why the information should be gathered. That reason is where the Secretary of State believes that there might be a gap affecting the national interest in research and development in the privatised companies, and where he may therefore wish to take decisions that might involve future Government funding. The Government would not be able to collect information without cause and would, if necessary, have to prove what the cause was. That cause is specified, and there is a confidentiality subsection attached to the information-gathering process.

Hon. Members on both sides of the House have said that they are worried about this aspect of long-term research, and the Government are meeting that concern in this way. I hope that I have given the hon. Member for Gordon the assurances that he is seeking and that he will not press what he has already described as a probing amendment. I also hope that he will support the reasons behind the powers that the Government are giving themselves.

Mr. Malcolm Bruce

This part of the clause is less felicitously worded than some of the amendments and new clauses that I have tabled which could have improved the Bill. Therefore, I am surprised by the readiness with which the Minister is prepared to accept the clause, which is woolly, ill defined and sweeping. I accept his assurances, but, as he said earlier, the final authority is the legislation that we are passing. I am uneasy that we are giving the Secretary of State power to secure quite a lot of information that, at least in theory, could be detrimental to the company concerned—in other words, it could be commercial information.

I note what the Minister said about the confidentiality arrangements. On that basis, I shall let my remarks rest and I hope that I shall never have to refer to them again. I hope that practice does not prove that companies will be asked to divulge information in a way that is not in their interest and is not justified, and that the Secretary of State will not interfere in an unwarranted manner.

Mr. Kevin Barron (Rother Valley)

I do not share the optimism of the hon. Member for Gordon (Mr. Bruce) about what the Minister has said about Lords amendment No. 6 and the introduction, at long last in the history of this Bill, of a clause that mentions research and development in this industry or industries. I do not share his optimism that mounds of information will be collected, because the obligation that the clause imposes is only that, in the Minister's words, the director general and the Secretary of State must take account of research and development. I am not sure whether taking such considerations into account will result in a lot of gathering of information about these matters.

The official Opposition are at least pleased that in the other place the Government decided to amend the Bill to promote research and development. It is a great pity that on Second Reading, in Committee and on Report the Government chose not to accept new clause 7 which went into detail on how research and development could be protected on behalf of the nation for many years to come. In Committee, the Minister told us that it was not necessary to write in a commitment to research and development because the need to provide a secure supply would be pressure enough on the privatised industry. Other similar unsupported assertions were made. I am glad that the Minister has now at least admitted that near-market considerations are more likely to be taken into account by the generators and others in the industry than the long-term research and development interest for which we argued.

In the same debate the Minister said that the industry should not have to provide information on environmental matters. That was another matter that was to be left completely to regulation. Yet, at this late stage, environmental considerations are being brought into play. Of course they are not the considerations for which my hon. Friends and I argued in the earlier stages of the Bill's passage but the Government are nevertheless admitting at long last that the purely ideological flotation that they planned many months ago is not practicable. The Bill's inadequacies would inevitably have meant that if such matters as research and development were left to the market, Britain's consumers would not have been afforded the protection that they need.

In moving the amendment in the other place, the Parliamentary Under-Secretary of State said: The new clause will ensure in an explicit and unambiguous way that after privatisation there will be a clearly defined long-stop responsibility for ensuring that R and D which is essential in the national interest is carried out. It will do that by providing statutory underpinning to the present informal arrangements by which National Power and Power Gen, the two main successor power generating companies, will continue to co-operate with ACORD so that the latter can advise the Secretary of State whether there are any research and development gaps which it is essential that he should fill in the national interest. It would then require the Secretary of State to fill those gaps if it appeared to him that they should be filled in the national interest".—[Official Report, House of Lords, 5 July 1989; Vol. 509, c. 123–34.] Does the Under-Secretary agree with what was said in the other place; can he give us an unequivocal yes to that statement? If he does agree, we must go on to ask him—given that we are now dealing with the matter in this place—why we ended up with a provision which, it appears to observers, is unlikely to give us the commitment to R and D that was advocated in the other place.

8.15 pm

It is always interesting to hear this Government acknowledge that the private sector may not meet the needs of the nation and concede that Governments have to intervene from time to time. We must also note, however, that the Government's record in setting priorities and advancing the development of new design and technology in the energy sector has been dismal. They may recognise that the nation's interests must be looked after, but nothing that they have done in the past 10 years proves that they recognise what those needs are.

Let me digress for a moment. I happened to read the report of questions to the Chancellor of the Duchy of Lancaster in yesterday's Hansard. In answer to a question directly related to civil research and development in industry, the Parliamentary Under-Secretary of State for Industry and Consumer Affairs said, I assume speaking on behalf of the Government: We believe, and continue to believe that by having a low tax regime and an environment in which companies can be profitable, we leave the decision on how to invest in their hands, rather than confiscating money from companies through taxation and imposing our decisions on them about how they should invest. That surely makes sense in a vigorous, capitalist economy."—[Official Report, 19 July 1989; Vol. 157, c. 335] That may make sense to the Under-Secretary of State for Industry and Consumer Affairs, but it does not seem to make sense to Ministers in the Department of Energy who have introduced safeguards, however poor, in relation to investment in research and development in the energy sector.

The Government have not been able to get the balance quite right and the reason is only too clear. Parliamentary experts have recently commented in detail on research and development in the sectors covered by the Department of Energy. We need only look at the last two reports of the Select Committee on Energy to see that research and development has fallen by the wayside, and has not been promoted by the Secretary of State as the amendment suggests it should. That means that the national interest has not been served as the other place so rightly said it should be.

The Select Committee's latest report on the greenhouse effect contains an indictment of the way in which the Department has allocated its research budget. Given the urgency of the problem, it is remarkable that the Department's research budget is actually to fall in the near future. Let us compare the sums allocated to research and development by the Department of Energy in the next 12 months, because those figures will affect environmental matters, too. We find that a meagre £2.6 million is to be spent on coal research while a massive £208 million is to be allocated to nuclear research and development. That money is being given to research and development in an industry which everyone. including the Secretary of State for Energy, agrees will not produce more electricity until the end of this century, perhaps well beyond. Moreover, when there is a change of Government, there is likely to be a reduction in the amount that the industry produces. Here we are committing millions of pounds to research and development in an industry which at best will remain static for decades to come and a meagre sum to an industry whose effect on our country is massive.

Is that really setting the priorities of the national interest, given that we use four times more coal than nuclear power in electricity generation and will continue to do so for a very long time to come, if for no other reason than that using coal to generate electricity is about 40 per cent. cheaper than using nuclear power? If the amendment is to mean anything, there must be a realignment of the Department's priorities in relation to the national interest, and of the actions of the Secretary of State for Energy and the director general if the privatisation of our electricity supply goes ahead.

It seems remarkable that we should have such a lack of investment in the right places given that the Secretary of State said in his evidence to the Select Committee: the country cannot afford to turn its back on its largest indigenous source of fuel". Should he not now be saying that we will promote technologies for the clean burning of coal? We have seen clearly that that cannot be left to the private sector. PowerGen, a CEGB successor company, has a stake in the future of coal burn, but the Secretary of State is saying at this stage that it may contribute only £750,000 to the continuation of the Grimethorpe project for clean coal burning. If that is the first indication of the new generators acting in the national interest, we have a long way to go before we can protect the interests of the nation and the environment in years to come.

Nevertheless, we are still hoping for a positive response from the Government for the continuation of the work on the topping cycle at Grimethorpe. The Government's lack of response to the Select Committee's initial recommendation has prompted an even stronger recommendation in its latest report. I see that my hon. Friend the Member for Barnsley, Central (Mr. Illsley), who sits on that Committee, is present in the Chamber. In the latest report, the Committee said: This unique technology may be the only acceptable way forward for coal-fired power production. The Government has a responsibility to help bring it to fruition, and we recommend that it should ensure that the next stage of work at Grimethorpe is completed. For months we have been waiting for a decision on the granting of a sum of no more than £10 million, which would be spread over three years, but yesterday, when the Government saw the poll tax coming on the horizon for April 1990, they were prepared to come to the House and satisfy the revolt of their Back Benchers with an offer of £100 million. However, they manifestly failed to cure the problem. We saw the early arrival of the Secretary of State for the Environment at Downing street this morning, which was no doubt to discuss where he is likely to be sitting when we return from the summer recess.

Mr. Morgan

That explains, perhaps, the difference between R and D, research and development, and B and C, bribery and corruption.

Mr. Barron

I cannot comment on that. My hon. Friend may be able to get into the debate and expand on that a little later. I do not know whether I should tempt him to do that, but it would be interesting.

We have a classical situation where for months and months a world-leading area for clean coal burn is waiting for a paltry sum, but the Government are willing to offer large sums when they are trying to keep the peace in the House.

It is clear that in the national interests we should have a final agreement in relation to the topping cycle at the Grimethorpe plant, so that that technology can be developed. Whether it goes into the public or private sector does not matter, it will be a saleable technology and one that will be acceptable to the environment not just in this country but throughout the world.

We should also be taking steps to ensure that the generating companies will retrofit their coal-fired power stations. How can the Minister expect the private generating companies to respond to demands for cleaning up their coal-fired stations through the fitting of FGD when the Government are preventing them from negotiating contracts of more than five years for the electricity that they produce? I understand that that is a hot potato at the present time in the contract working party and elsewhere. The generators are under instruction to clean up the emissions from coal-fired power stations—that was an instruction from Ministers well before we began discussing the Electricity Bill in this place—but, because of the short termism of the contract between the generators and the supply companies, the generators are saying that they cannot enter into those investment programmes to clean up the emissions. I hope that the Minister will give us his observations on what will happen to the retrofitting of FGD at coal-fired power stations and whether the Government are able to do anything about that. Is it not the case that, by threatening the progress in cleaning up the environment in which we all live, we are seeing a neglect of the national interest?

Does it not make nonsense of the assertions made by Ministers in relation to research and development, when we know that the private sector will respond to the short-term interest of its shareholders, not the long-term interests of the nation? I believe the Minister referred to it as the near-market consideration. The Government should step in to ensure that the work is done—by doing it themselves or by sending others to do it. If this technology can be developed and funded for our competitors throughout the world, I do not see why it cannot be done in this country. Other countries recognise the strategic importance of investment in energy research and development and their Governments carry out the necessary long-term research.

Let us compare the Department of Energy's record for expenditure on research and development with that of the United States. Our expenditure on coal research and development was £2.6 million and for nuclear it was more than £200 million. In the United States next year, their spending will be some $924 million on coal research and development and $791 million on nuclear. They clearly see where research and development is needed if the long-term problems are to be sorted out. Not only are those larger sums than the Government will commit, but they indicate a more rational allocation of resources.

We are not confident that the amendment will ensure the promotion of research and development in the national interest after privatisation when the Government are incapable of it while the industry is in the public sector. Why is the Secretary of State waiting until after the industry has been sold off before taking that action when he could and should be doing it now? It is obvious that a number of state industries that are involved in energy—whether it be British Gas, which was privatised a few years ago, or the electricity supply industry, which is about to be privatised—will not consider the national interest when carrying out their operations in the private sector. Therefore, should we not be ensuring now that we take action so that the benefits of protection for consumers and for the environment can clearly be seen? We cannot take into account the near-market consideration that the Minister mentioned.

Mr. Eric Illsley (Barnsley, Central)

I rise to make a few brief comments on research and development and Lords amendment No. 6. I shall obviously not go into such detail as my hon. Friend the Member for Rother Valley (Mr. Barron), but I want to comment on a couple of topics that were considered by the Select Committee on Energy, of which I am a member.

I have been bashing away at the Department of Energy over the past few months, together with colleagues from around the area and on the Select Committee, about the development of the topping cycle at the Grimethorpe pressurised fluidised bed combustion plant. When giving evidence to the Select Committee earlier this year, the Secretary of State committed himself to saying that a financial package would be put together to fund the topping cycle later this year. Following that, the Select Committee visited the plant at Grimethorpe, as guests of British Coal. We were then told that an £8 million package had been agreed and that the money would be made available to British Coal, together with private investment that had been raised.

We then returned to London and took evidence from the permanent secretary to the Department, who, surprisingly, informed us that finance for Grimethorpe was still under consideration and a figure had not even been talked about. Hon. Members can imagine the surprise of the members of the Select Committee to hear those words from Sir Peter Gregson, when we had been assured by British Coal that all was well and that all it was waiting for was the signing of the cheque.

A report has been produced by the Select Committee on the greenhouse effect. I do not intend to go into that report in detail, but it is noticeable that it advocates that national Governments—our own and others throughout the world—take some sort of action now in response to global warming. Their action could either be to reduce some of the carbon dioxide emissions or to fund further research to try to determine more exactly the problems of global warming.

The Select Committee had the benefit of a seminar earlier this year at which we were informed that part of the climatic research into global warming had not yet been completed, especially in relation to the effect on the oceans. We were told that funding for that research remained to be considered, but that it should be substantial. As a consequence, the Select Committee advocated that the Government should consider spending a percentage of our gross national product on research into global warming. We felt that it was as serious as that, and that the Government should take a lead in that direction.

8.30 pm

Of course, the Government's research and development programme has been cut in other areas also. Indeed, the Government are looking to the private sector to fund research into all matters relating to energy, such as cold fusion, the fast reactor and the latest one—which is now coming to the fore, but on which there is no commitment to research—super-conductivity at higher temperatures. We were informed as recently as yesterday by the United Kingdom Atomic Energy Authority that it had discontinued its research into cold fusion because it could not reproduce the experiments of professors Fleishmann and Holmes. If the Select Committee is still in being after the recess, and if there is still a Department of Energy for it to shadow, we shall undertake to look into the funding of the fast reactor programme which is another area in which the Government have cut research.

To give the House some idea of the way in which the Department regards the funding of research, I conclude with a few figures. The expenditure estimates of the Department of Energy include the sum of £12 million for the refurbishment of the Department's premises and its move from Millbank to Buckingham gate at a time when the Department's future is under question. No one has yet determined whether the Department will be in being after the next few months. In contrast, the spending on research and development for the current year will be £2.6 million. That compares with at least 20 times that amount being spent on nuclear research and development and it explains why we cannot get a couple of million quid for the Grimethorpe topping cycle.

The estimates paper also contains a section on research and development and on the funds made available to research into the cost of storing petrol rationing coupons. That just about sums up where the Department stands on its allocations of money to its various programmes.

Mr. Michael Spicer

With the leave of the House, I shall respond to the debate.

The hon. Member for Rother Valley (Mr. Barron), who has now come back from the gods, said that we would have a short research and development debate. In fact, we have had a short coal research and development debate—[Interruption.] Yes, it is fine, but that is what we have had.

The two main contributors to the debate, the hon. Member for Rother Valley and his hon. Friend the Member for Barnsley, Central (Mr. Illsley), made two main points. The first was about Grimethorpe and the research and development expenditure which would be made there. The answer is—[Interruption.] Well, Opposition Members will have to wait and see. It is not just perfectly respectable, it is perfectly normal for Governments to enter a cycle of public expenditure reviews as the summer ends and as autumn begins. That is how the parliamentary year and the Government year work. We start our reviews and we work out——

Mr. Illsley

I appreciate everything that the Minister has said. He and I have exchanged views on this during the past few months. The point that we have tried to make on behalf of the Select Committee is that by the time the public expenditure round is decided Grimethorpe will have lost all its best scientists and workers. Even now, key workers have been lost from the site. They have gone abroad to work on the schemes being operated in Scandinavia. We should like the Government to give some commitment, not in terms of how much money, but simply to end the confusion that has been caused by the Secretary of State, the permanent secretary and British Coal. We have had three different versions of the Government's position on this money. The Government should come out and say, "We do not know how much, but the money will be available", because that would prevent jobs from being lost at Grimethorpe. That is the key point.

Mr. Spicer

To paraphrase the hon. Gentleman, he is saying that the whole thing is falling apart while we wait. However, as he knows, that is not true. Like his hon. Friends who have been assiduous on this matter, the hon. Gentleman knows extremely well that British Coal believes that the position can be held and that the work can continue. The Government are quite properly deciding whether they can put the money behind the project. A public expenditure round is currently under way—I am glad to see the hon. Member for Barnsley, East (Mr. Patchett) in his place because he has taken a great interest in this matter—and public expenditure rounds are the proper way to go about these things.

I repeat that it is not true that the project is falling apart. What is true is that those of us who are concerned about the future of the coal industry—as I am, and I know that Opposition Members are also—must accept that the topping cycle is not likely, on the assumptions that I have seen, to have more than a 15 to 20 per cent. effect on CO2 emissions. We must compare that with the 40 per cent. effect that could be made by a modern gas-fired power station. If one is thinking about CO2 emissions, as we are because that is one of the main considerations, one must keep those figures at the back of one's mind. It is perfectly proper that we should assess any expenditure that we make on the topping cycle in that context.

However, it is wrong to say that the Government are dragging their feet in such a way that the whole project is in danger of coming to a halt. The Government are going through their normal expenditure review processes. That is quite proper. British Coal is clear that the situation can be contained throughout that period and we shall make our decisions at the appropriate moment. We have already said that we are extremely interested in what is coming out of Grimethorpe. I cannot say any more to the hon. Member for Barnsley, Central except that I completely disagree that the position is collapsing and that we have gone beyond——

Mr. Terry Patchett (Barnsley, East)

Given all that the Minister has said, when does his Department intend making the decision on the Grimethorpe fluidised bed?

Mr. Spicer

A proper decision will be made in time which involves——

Mr. Patchett

When?

Mr. Spicer

—the institution being a going concern. There is no question of our allowing it to run down and then making the decision. The hon. Gentleman is pressing his case, but he is being a little unreasonable. As I have said, it is perfectly proper for the Government, as part of their public expenditure round, to consider whether to spend money on this operation. It would also be perfectly proper for the hon. Gentleman to get excited if the review process was automatically destroying what is going on up at Grimethorpe, but it is not. The operation is capable of continuing at the moment. We shall then make a decision in time——

Mr. Patchett

When?

Mr. Spicer

—for the operation either to continue or to be closed down, if that were the decision.

I have already told the House that the topping cycle is an extremely interesting piece of research and development—[Interruption.]Well, I am saying it now if I have not said it before. There is no question at the moment of the research being wound down or out. I must remind the House that this is only one way—and perhaps a more limited way than can be found with other forms of electricity production—of affecting CO2 emission levels.

The hon. Member for Rother Valley seemed to imply that the Government were dragging their feet on FGD. There is no question but that we shall insist that the industry complies with the EC directive that the United Kingdom should achieve a 60 per cent. reduction in sulphur dioxide emissions by the year 2003 compared with 1980 levels. If one takes into account nitrogen oxide programmes, that will result in expenditure of £2 billion by the industry.

Mr. Barron

I am saying not that the Minister is dragging his feet but that the generators say that if the longest contract that they can have with the supply boards is five years their investment in reducing emissions will be in considerable danger because of the time that building takes. I do not know whether this is a matter for the Department of Trade and Industry or the Department of Energy, or a mixture of both with No. 10 Downing street. The generators would like contracts which extended over a period which was long enough to enable them to invest in cleaning up the power stations.

Mr. Spicer

I understand the hon. Gentleman's point. We shall ensure that the EC directive and the objectives associated with it in terms of the reduction of sulphur dioxide emissions will be complied with.

Mr. Barron

Will the Minister ensure that they start building programmes which are designed to do that? That is the assurance that we and the country need. We need to be assured that building for FGD and the power stations can go ahead without interruption.

Mr. Spicer

We shall not be building any power stations because we are privatising the industry, but it is legitimate for the hon. Gentleman to ask how that will be done. The answer is that the industry will have to comply with the EC directive and with the United Kingdom's policy associated with that objective, and it knows that.

The hon. Gentleman asks for an assurance that the Government will ensure that the directive is complied with and I give him that assurance. It is our policy that those emission levels will be reduced.

Mr. Barron

Does the Minister agree with the statement that I read out which was made by the noble Baroness Hooper in the other place?

Mr. Spicer

My noble Friend's comments in the other place were in line with everything that I have said. My noble Friend put her points cogently. I agree with them, and that is why I ask the House to agree with the Lords amendments.

Question put and agreed to.

Lords amendment No. 90 agreed to. [Special entry.]

Lords amendment: No. 7, in page 3, line 29, at end insert and a duty to take into account, in exercising those functions, the effect on the physical environment of activities connected with the generation, transmission or supply of electricity.

Mr. Michael Spicer

I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker

With this it will be convenient to take Lords amendments Nos. 119 to 128, 130 to 139 and 141 to 143.

Mr. Spicer

When the Bill was being considered in Committee concerns were expressed that its environmental provisions were not strong enough. The Government have considered the matter and we have talked to representatives of environmental groups. The result is a package that the Government are bringing forward under this group of amendments to schedule 9 and clause 3. As I am sure hon. Members know, they have been warmly welcomed.

8.45 pm

A number of changes have been made in the other place, particularly to schedule 9. Licence holders and exempt generators and suppliers will now be under a duty to do what they reasonably can to mitigate the effects which their proposed developments will have on the natural beauty of the countryside and the other features listed. The duties on generators now apply also to subsequent changes in the operation of stations.

The Secretary of State will have a duty to have regard to the extent to which applicants for consents under clauses 38 and 39 have complied with the duties under schedule 9. Licence holders are now required, in consultation with specified environmental bodies, to prepare statements setting out how they will perform their environmental duties.

In response to the strong feeling that there should also be an environmental duty in clause 3, the Government have introduced an amendment which places the Secretary of State and the director general under the duty to have regard, in carrying out their functions, to the effect on the physical environment of activities connected with generation, transmission or supply of electricity. The result is a Bill with rigorous, precise and practical environmental provisions which should commend themselves to the House.

As has been said a number of times, but it bears repeating, the Bill's environmental provisions do not stand alone. There are 15 Acts of Parliament and 14 EC directives which bear on the way in which the electricity industry impinges on the environment. Giving effect to one of the directives are the regulations issued earlier this year which require environmental assessments to be provided for projects likely to have a significant effect on the environment.

From the beginning we have maintained that the Bill will benefit the environment. We have explained that schedule 9 in particular was a more far-reaching provision than had ever existed before. However, we have further strengthened it by those amendments.

The electricity industry is often compared with the water industry. The water industry can positively beautify the land, but, whatever hon. Members' view of the beauty of power stations or overhead lines, it is difficult to imagine building a power station which positively beautifies the countryside.

We have made sure that when power stations are built or overhead lines put up their effect on the environment will be seriously considered. We have gone further than that and said that their effects on the environment should be mitigated.

We are talking not just about the beautification of the countryside but the way in which the industry pollutes the atmosphere, and that is why we are introducing such tight restrictions, particularly on sulphur dioxide emissions.

The electricity industry is different from the water industry and any comparison is inappropriate. We think that we have it about right. We have listened carefully to what has been said by hon. Members on both sides of the House, and I hope that they, and especially the hon. Member for Wentworth (Mr. Hardy), will welcome what we have done.

Mr. Hardy

I am afraid that I cannot offer the Minister the congratulations that he appears to be angling for because the Government have, quite simply, been tinkering. When we debated schedule 9 in Committee, the Government would not accept my amendments, even though Conservative Members made one or two noises of approval. Those noises were not translated into votes, but we hoped that they would encourage the Minister to take a more positive view.

I warned the Minister that the House of Lords was not so docile or obedient as his Back Benchers. Indeed, it resisted the blandishments of the noble Lady in charge of the Bill. Earlier this evening I referred to her skilful presentation, which was reflected in her approach to the environment. There were echoes of the Minister's speech in her speech, or perhaps it is the Minister echoing the noble Lady. In that debate on 25 April she said: we have a very positive story to tell. I have recently had meetings with representatives of the Nature Conservancy Council, the Countryside Commission, the Council for the Protection of Rural England and Friends of the Earth, and I understand their concerns. I shall of course listen closely to what noble Lords have to say today."—[Official Report, House of Lords, 25 April 1989; Vol. 506, c. 1157.] It might be that the tinkering with the Bill following that Lords debate represents an improvement, but if so it is far too modest. Ministers have not made it clear that the conservation bodies in Britain, which they listed in their accounts of consultation, showed an absence of support and enthusiasm for the measure. Indeed, we may be reaching the point where the House is being misled. That reminds me of a week last Monday, when I switched on the car radio and heard comments by the Secretary of State for the Environment, speaking in Newcastle. He boasted that the Government's record on the environment was superb and that all the green organisations and individuals were guilty of distortion or dishonesty in suggesting that their record was less than satisfactory.

The right hon. Gentleman went even further and announced that the Government were proposing to set up an office to disseminate accurate information about the environment. Ministers have been challenged to give one example of dishonesty, inaccuracy or excessively sweeping statements by the responsible conservation bodies and individuals—but so far they have been unable to find even one.

Because the Government often boast without good reason of a record that is not good enough, we are entitled to be cynical, suspicious and critical of the proposals before us. One reason for my suspicion is that only yesterday I learnt that one large power station intends to cut the number of welders working in teams on a 24-hour shift rotation from 20 to five. That means that four welders will work the day shift, with one working all the anti-social hours. What will happen if something goes wrong? The present publicly owned responsible industry has welders available to deal with any leakage. Very often large power stations are a long way from the homes of its workers—[Interruption.] I hope that the Minister is listening because he must tell us what will happen if there is a problem. Some of the workers may live 40 or 50 miles away from the power stations. My hon. Friend the Member for Ashfield (Mr. Haynes) represents people who work in power stations that are far away from their homes. If 15 of the 20 welders are to lose their jobs—[Interruption.] The Minister's parliamentary private secretary, the hon. Member for Cannock and Burntwood (Mr. Howarth), seems to think that I am making an inappropriate comment when in fact it goes to the heart of the problem. If 15 of the 20 welders have to go, there will probably be only one or even no welder working at night. The power station may still be operating and any emission, leakage or pollution could he serious because they will have to call out a welder who has probably already done a great deal of work and is entitled to time off.

Mr. Haynes

My hon. Friend is talking about safety in the electricity industry. During questions today the Prime Minister was asked about safety in industry and she said that it was the No. 1 priority for the Government. How does that square with what my hon. Friend is saying?

Mr. Hardy

My hon. Friend will be aware that the incidence of serious injury and fatal accident in the coal mining industry during the past three or four years, per 100,000 shifts worked, has risen substantially. It is not just the safety factor that is important. My point is that currently Britain's power stations have a sufficiently skilled staff immediately available to deal with any problem, malfunction or breakdown. Under privatisation, they will no longer be available.

I recall that a group of hon. Members, under my chairmanship, visited Hinkley Point power station a number of years ago. An incident occurred during our visit, and I and one or two of my colleagues were castigated by one or two newspapers because we refrained from making any scathing comment. Some equipment had malfunctioned, but we were satisfied that it had nothing to do with the nuclear aspect of the operation. A simple machine broke down and released some non-noxious gases. Having established those facts, we refused to make any public comment—although one or two newspapers wanted us to make some scare talk.

Perhaps the right hon. Member for Yeovil (Mr. Ashdown), who now leads the Social and Liberal Democrats, would have welcomed the opportunity to make such comments. We felt that it would be unreasonable to make such comments because the electricity industry dealt immediately with the minor malfunction. It would have been both wrong and impertinent to make some cheap, speculative comments. My point is that at that time we could afford to decline to become involved because we knew that skilled staff were readily available to deal with the problem. We now know that the work force, including fitters and welders, is to be substantially reduced, and that outside the normal day shift there will be only a skeleton staff—if that.

We are surely entitled to be particularly concerned about environmental risks. If a pipe fractures or a machine breaks down, the plant may have to contact a worker in the constituency of my hon. Friend the Member for Ashfield or perhaps even in mine. There are living in my constituency power workers who are employed miles and miles from their homes. They will have to travel a great distance to deal with a breakdown at a time when they are supposed to be off duty.

The Government are clearly embarking on the same course that is followed in the steel industry, of relying increasingly on contract labour. The CEGB has a proud record of training, but I suspect that the level of training and the number of apprentices are already falling. In their place, contract labour will grow and the training function will diminish. The labour skills available to the industry will then contract.

With that in mind, the conservation bodies are justified in being highly suspicious of the Government's attitude. The Government know very well that just as privatisation of the electricity industry is particularly unpopular in green and environmental circles, it is not commanding much public support either—despite the blandishments of the Government's very expensive television advertising campaign.

9 pm

Consequentially, the price of the industry's shares may be much lower than the Government originally hoped. It is not only that which worries me. As the flotation approaches, and as the City grows increasingly worried about being left with shares on its hands, City interests and underwriters will run to the Minister to say that the shares are not moving quickly because the Government tightened environmental controls rather more than the City wanted—even though the rest of us realise that those controls are grossly inadequate.

The Minister, in his brief and complacent speech, seemed to suggest that the House should feel grateful to him for his generous and thoughtful consideration of environmental issues. In truth, the Bill is bad, and it has not been improved nearly enough. It is bitterly resented by conservationists. The Minister should have something to say to the people who cannot even wait for the House to complete its consideration of the Lords amendments before telling the skilled workers who made the industry as clean as possible, within the limits of the industry's investment policy, that there will be lots and lots of job losses.

The Minister may think that I am oversuspicious. He may recall that some months ago I spoke in the House about the fears held by many of substantial job losses. I echoed the anxieties and suspicions of the unions representing workers in the industry when I said that I was fearful of substantial redundancies and that the corners of safety and of environmental protection would be cut. The Secretary of State assured me that, far from there being fewer jobs, there would be more.

Where are those jobs to come from, when fitters and welders are already being made redundant? Is one contract worker to count as 10 skilled artisans? The situation is such that suspicion is certainly justified. I am still waiting for the Secretary of State to tell me that he made a mistake when he gave an assurance that many more people would be employed in the industry.

The information reaching me even before we complete the first of the two days set aside to consider the Lords amendments leads me to believe that I am entirely justified in expressing our unhappiness at the Minister's proposals and that the changes he makes, and which he believes are of a salutary nature, are mere tinkerings. Certain aspects of the Bill have been given insignificant and grossly inadequate priority. I only wish that the Chamber was completely full, so that I could divide the House and express my opinion more forcibly in that way.

Mr. Morgan

My comments are aimed at supporting and amplifying the comprehensive account of the Opposition's considerable concerns for the environment given by my hon. Friend the Member for Wentworth (Mr. Hardy). He was reasonably fair to the Minister, who told us of his pride in the amendments presented in the other place, which together write certain environmental protections into the Bill. However, we do not entirely share the Minister's pride.

We have always felt a good deal of respect for the diligence of the junior Minister. We were always able to tell whether it was dinner time by whether the Secretary of State was absent, in which case the "parliamentary Charlie"—as we used to call them when I was a civil servant—had to man the boat, sinking or otherwise.

Mr. Haynes

He was manning the boat all the time.

Mr. Morgan

As my hon. Friend says, the hours put in by the junior Minister at the Dispatch Box were phenomenal—which clearly implies that those put in by the Secretary of State were not.

Are the powers granted in Lords amendment No. 7 really so great? Let us take a difficult environmental issue such as the decommissioning of a nuclear power station. Is it reasonable for National Power and the Scottish subsidiary company to decide to top it up with concrete and leave it for 100 to 150 years, preferring that course to the Swedish method of de-irradiating and disassembling the thing so that it turns into farmland within 25 to 30 years—that being the shortest period compatible with the safety of the workers who would have the job of removing it? That is probably the largest single job related to the physical environment that the industries will have to face over the next half century, century, or century and a half.

Let us suppose that the Secretary of State, or the director general, suddenly decides that he is not happy with National Power's proposals. Under Lords amendment No. 7, the Secretary of State has a duty to take into account the effect on the physical environment of activities connected with generation, transmission or supply". Will the Secretary of State have the power to say, "I am not happy to allow a power station with a concrete cap and a bit of grass topping to be left for 150 years; I want you to use Swedish technology to get rid of it in a shorter time so that it can return to its previous use"?

We must also consider indirect effects on the physical environment. We have already heard a good deal—today and, from time to time, from the Prime Minister via the usual megaphone—about global warming. Let us say that the global-warming threat, as foreseen by some scientists, turns into a near-market threat confirmed by the vast majority of scientists. If Britain and other advanced industrialised and industrialising countries continue to expand electricity generation at the same pace, the physical environment may be damaged in a way that we can hardly imagine today, with sea levels rising by 7ft or 8ft.

Under the amendment, would the Secretary of State have to deal with that? Would the Government say, "We must do something drastic about carbon dioxide emissions. There must be an international treaty, and Britain must contribute its share"? The Prime Minister has implied that she would almost welcome the opportunity to lead such a crusade, and clearly, if the scientific evidence is corroborated over the next decade, the entire country—indeed, the globe—must face up to the problem.

The Minister has already implied that the powers in the amendment are of huge significance in the context of water privatisation, but are not worth a row of beans when it comes to the electricity industry—which, by its very nature, does not possess the up-country land holdings held by the water industry. It has only lines of pylons and a small number of power stations. The Minister is being terribly static in his thoughts.

My hon. Friend the Member for Barnsley, Central (Mr. Illsley) has already mentioned the immense amount of interest around the world in research and development into superconductivity. As this is probably our only opportunity to consider the reorganisation of the industry over the next 10 or 20 years, if superconductivity were to become a financial reality it is a practical proposition to ask whether we want pylons in our national parks and pleasant countryside or whether we should bury them underground. That would be feasible if the more optimistic views of superconductivity become true. Overhead pylons would no longer be necessary as superconductivity does not need the cooling power of the air and it would be quite possible to put them underground.

Is this the power under which the Secretary of State and the director general could call together those in the industry and say, "Supercondutivity is now an option and we are under pressure from walkers, ramblers and so on"? A practical example which could arise in the next few years, even if superconductivity did not become a reality, involves an issue that has been heavily touted by the Minister and his ministerial colleagues—the Minister of State, Scottish Office is in his place—that of greater Scottish exports of electricity south of the border. I am informed that that can be done by expanding the interconnector where the Scottish and English systems meet, and that a major increase in the north-south line would be needed, and that to avoid brownout there would have to be cross-bracing lines across the famous, or infamous, Harker Stella route around Hadrian's wall. That issue arises every time the legislation has the side effect of expanding the commercial attractiveness of direct export from that massive Scottish surplus of electricity generating capacity, which we keep hearing about, to the power-hungry regions of central and southern England. It cannot be done without cross-bracing lines to cover the north-south lines, otherwise brownouts become a danger as it will be difficult to maintain system stability. All those cross-bracing lines will cross the Pennines and then there will be trouble from the environmentalists.

Is it under Lords amendment No. 7 that the director general and the Secretary of State and his ministerial collegues at the Scottish Office would have to scratch their heads and ask, "What is the price on the environment in the Pennines? How many additional power lines and how much environmental opposition are we willing to brook to facilitate greater Scottish exports?" Would they have to consider how to balance the environmental interests with the economic interests of free trade in electricity between Scotland and England under Lords amendment No. 7?

Finally, I shall make one small point about Wales, as I could hardly discuss Scotland and England without mentioning Wales. Is Lords amendment No. 131 already out of date by virtue of an announcement that has been made since the Lords amendments were printed? The Secretary of State for Wales announced the merging of the regional Nature Conservancy Council, which is part of the Nature Conservancy Council for England and Wales, and the Countryside Commission for Wales which was probably a regional branch of the English organisation, into one separate statutory body which is not mentioned in Lords amendment No. 131. Will the Minister require further to amend the legislation to take account of the alterations that have been announced but obviously have not taken effect yet? Obviously Ministers will have to consider whether the Welsh element now needs a separate mention in Lords amendment No. 131.

The Minister will have realised that we have considerable worries as to exactly what Lords amendment No. 7, of which the Minister is inordinately proud, is intended for, apart from trying to win a few Green votes on the cheap. We should be grateful for any illustrations or any light that he can put on the matter this evening.

9.15 pm
Mr. Michael Spicer

I will write to the hon. Member for Cardiff, West (Mr. Morgan) on the final point he made about Wales—unless I discover the answer during the evening—because it is a technical and specific issue.

The hon. Member for Wentworth (Mr. Hardy), who has been interested in the campaign on this subject for a long time, should learn to recognise good news when he hears it. He is familiar with the bodies that are concerned with environmental matters. For example, I have before me a letter written to my noble Friend the Parliamentary Under-Secretary of State for Energy by Mr. David Astor, the chairman of the Council for the Protection of Rural England, in which he said: We are delighted that you have now accepted the underlying thrust of our arguments. The deputy chairman of the Nature Conservancy Council, Sir John Burnett, wrote: It is excellent news that nature conservation requirements are now being given statutory force. There is clearly a difference now—perhaps there always was—between the hon. Member for Wentworth, who is normally very much in touch with these events, and those who are directly responsible for representing the interests of nature conservancy and the countryside. The hon. Gentleman might take note of, and place more emphasis on, what is being said outside the House about the amendments.

The hon. Member for Wentworth spoke at length about safety. The amendments with which we are now concerned are about the environment. There is a lot in the Bill about safety and I urge the hon. Gentleman to consider, for example, clause 3(3)(c) and (d). Those provisions explain the duties that the director and Secretary of State must take into account in terms of the safety of employees and, in subsection (3)(c). to protect the public from dangers arising from the generation, transmission or supply of electricity". That came about as the result of an amendment made on Report, following much discussion on the issue in Committee. The hon. Gentleman should have recognised that.

Mr. Hardy

I have not seen the letters to which the Minister referred, from Mr. Astor or from the deputy chairman of the Nature Conservancy Council. People from the conservation bodies who spoke to me on many occasions at earlier stages of the Bill have not been back to me to express the more approving views to which the Minister referred. I am not casting doubts on the hon. Gentleman's integrity, but he might care to read the remainder of those letters to satisfy himself—and perhaps eventually the House—that the words, which may appear to be complimentary, used at the beginning of the letters are not later qualified by expressions of regret about continuing inadequacy. I did not wish to raise the question of safety. That note was injected into my speech as a result of an intervention by my hon. Friend the Member for Ashfield (Mr. Haynes).

Mr. Spicer

Leaving the final part aside, I regarded that as a noble intervention by the hon. Gentleman. He admitted that he was not completely up to date with the latest thinking on the part of those organisations. That was frank and honest of him and there seems to be little between us.

The hon. Member for Cardiff, West spoke in particular about amendment No. 7, which says that in conducting their duties under the Bill the director and the Secretary of State shall take account of the effect on the physical environment of their actions. It means precisely that, and to appreciate the effect of it one needs to consider the duties that they must perform and then read the entire Bill to see how those duties are carried out. As they wade through the Bill carrying out their duties—doing the various things that they can do under the measure—they will have to bear in mind the effects on the environment of those duties. That is not to say that the amendment introduces some great new interventionist facility. The points that the hon. Gentleman made about that come under the normal planning procedures. For example, the question whether Hinkley Point, as against some other construction, is to be built is a matter of detail and planning, and those planning laws are not affected by the Bill.

Mr. Morgan

I do not know whether the Minister misheard me or whether my direct questions threw him completely. I was not talking about the building of new nuclear power stations. That is clearly determined by normal planning inquiry procedures.

I asked about the decommissioning of nuclear power stations. Will the Secretary of State or the director general have the power to question and then to determine whether he is satisfied with a particular form of decommissioning and its effect on the environment? If it is proposed to cap a reactor with a concrete dome for 150 years, could he say, "I am not happy with that" and insist that it be taken away within 25 years? I was talking not about the building of Hinkley Point but of the removal of Berkeley.

Mr. Spicer

The hon. Gentleman should read the Bill. I know that he has. I think I have the answer here.

Mr. Morgan

What does it say?

Mr. Spicer

Well, it does not say an awful lot. I will read it out in a moment. It says that this is for the nuclear installations inspectorate, but I think that I can do better than that.

The hon. Gentleman knows that the regulator, when he carries out his duties under the terms of the Bill, has to consider the price formula. We all have to consider that. When carrying out those assessments, the regulator, if the amendment is accepted, will have to bear in mind—and he can be challenged about it, because it will be in the Act if the House agrees to it—the impact of his decisions and actions on the environment. I think that that gives the hon. Gentleman a precise answer. We would have to debate and discuss the entire Act to see how it would impinge on the decommissioning that the hon. Gentleman raised.

This is an important amendment, which pervades the Bill. Every time the director general considers what he is doing he has to bear in mind the environmental impact.

I think it is perfectly right that the hon. Gentleman should ask these questions, but I think that Opposition Members have been, for want of a better word, churlish. The hon. Member for Wentworth has accepted that he is a bit out of touch with the latest thinking of conservation bodies. It was generous and proper of him to declare that. As I have now informed the House of the latest thinking of the conservation bodies, I hope that it will welcome these amendments with open arms and with approbation. They have been welcomed widely outside the House.

Mr. Morgan

rose——

Madam Deputy Speaker

Order. The House is on consideration of Lords Amendments, and the hon. Gentleman has already spoken.

Mr. Morgan

With the leave of the House, I did not want to allow the word "churlish" to pass without some comment. There is a fundamental difference between writing a note to the Countryside Commission asking for a pylon to be moved half a mile to the left, which is one interpretation of the clause, and saying, "No, I am not happy with that nuclear power station being left under a concrete dome for 150 years, even if it costs an extra £1 billion on your cost formula to remove it after 25 years." Nor is that the same as saying that we must take account of the global warming threat, that we are worried that London will be under 6 ft of water and that the only solution is to try breast stroke. Those are quite different considerations.

Mr. Spicer

With the leave of the House, I unreservedly withdraw the word "churlish." Perhaps the word "reserved" should be inserted instead.

Question put and agreed to.

Lords amendments Nos. 119 to 128, 130 to 139, 141 to 143, 11 to 13, 15 to 20, 115 to 117, 53, 54, 57 and 58 agreed to.

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