HC Deb 26 June 1989 vol 155 cc682-4
3. Mr. Jack Thompson

To ask the Secretary of State for Energy when he last met the chairman of the Central Electricity Generating Board; and what matters were discussed.

Mr. Parkinson

I regularly meet the chairman of the Central Electricity Generating Board.

Mr. Thompson

Following recent reports that the European Commission is to investigate the legality of the electricity privatisation Bill, whose provisions concerning the protection of the nuclear industry are under question, did the Secretary of State discuss with the chairman of the CEGB the future prospects for National Power and its marketability if the European Commission makes an adverse decision?

Mr. Parkinson

We shall clear all our plans with the European Commission, with which we have had preliminary discussions. The Commission recognises that at the end of this privatisation we shall have the most open electricity supply industry in Europe. Broadly speaking, it is strongly in favour of our proposals and we expect to be able to satisfy it about the details of the fossil fuel levy.

Sir Trevor Skeet

Is my right hon. Friend aware that negotiations are taking place between the generators and the large industrial users about the direct buying of electricity, which comes under clause 6? Will he accelerate that process and ensure that the CEGB's successor will have the right to do just that?

Mr. Parkinson

The industry is settling a range of complex issues at the moment. They arise from the fact that we shall be changing the whole basis on which the industry operates. At present, it is producer-dominated and the producer—the generator—has the last word in disputes. In future, producers and users will have to negotiate a settlement between themselves—that is what they are in the process of doing.

Mr. Maclennan

Given the expressed view of the chairman that, following the removal of the duty to supply from the Central Electricity Generating Board to the consumer, responsibility for maintaining medium and long-term research fell, upon whose shoulders does the Secretary of State intend that that financing should fall?

Mr. Parkinson

My Advisory Committee on Research and Development—ACORD—has been looking at the entire range of research that is carried out in the electricity supply industry. The successor companies have already made it clear that they will carry on with a range of operational and medium-term research. ACORD is advising me whether there are any areas that the companies do not want to pursue which, in ACORD's opinion, should be pursued. The Government would then take those on.

Mr. Colvin

Has my right hon. Friend discussed with the chairman of the CEGB the problems of research and development following privatisation? Following his decision to sanction the closure of Marchwood engineering laboratories and the allocation of their R and D capacity to Berkeley and Ratcliffe-upon-Soar, it seems that the plans that the Government have in mind favour National Power and Power Gen, which will draw on the resources of those two research establishments. If any other bodies such as the distribution companies choose to generate power after privatisation, which they will be empowered to do, to whom will they go to get research and development done? Surely a case can be made for the privatisation of the CEGB's research and development facilities in a single company which can contract its resources to anyone who may want to generate, rather than for making these facilities the exclusive preserve of National Power and Power Gen.

Mr. Parkinson

We considered the privatisation of the research facilities as a separate research company, and came to the conclusion that that was not practicable. Private generators would be able to approach these research establishments and seek to place contracts. Other research establishments are available. The main fact was that after the most careful examination there was no justification for maintaining Marchwood. The work being done there can be transferred to Ratcliffe and Berkeley. Marchwood is simply not necessary.

Mr. Morgan

Following press reports last week that the Government have done a U-turn in their relations with the CEGB and National Power, in respect of the full indemnity that we understand will now be given for nuclear waste reprocessing disposal and decommissioning, as distinct from merely the unforeseeable costs of those three categories of the CEGB's and National Power's expenditure, will the Secretary of State tell the House whether he agrees that that is a thoroughly undignified chapter in the breaking of a promise made at the Committee stage? Does he agree that he is now reduced to shovelling the shares off the back of a lorry before he finally shovels the Department of Energy into oblivion?

Mr. Parkinson

My advice to the hon. Gentleman would be quite different. He should stop believing as gospel everything that he reads in the newspapers. There has been no change in Government policy. The policy as set out during the Committee stage is the policy that we are maintaining. We are advised that clause 93 in its present form did not achieve the aims that we had for it when we put it to the Committee.

If Opposition Members wish to quote either my hon. Friend the Under-Secretary of State or myself, I hope that they will quote Hansard accurately instead of misrepresenting what we say.