Electricity Generation (Hansard, 15 November 1989)

§ 1. Mr. Eadie
To ask the Secretary of State for Scotland what plans he has for meeting the heads of the electricity generating boards in Scotland to discuss future electricity generation.

§ The Secretary of State for Scotland (Mr. Malcolm Rifkind)
I meet the chairmen of the Scottish electricity boards from time to time to discuss a wide range of issues affecting the industry, including future electricity generation.

§ Mr. Eadie
With regard to the discussions that the Secretary of State has had, or will have, does not his conscience trouble him? Is he not fully responsible for the destruction of the Scottish coal industry, in the stupid belief that nuclear energy is cheaper than coal?

§ Mr. Rifkind
I remind the hon. Gentleman as kindly as I can that the Labour Government of which he was such a distinguished member took the initial decision to build Torness nuclear power station and continued with the Hunterston power stations. As the hon. Gentleman was an energy Minister in that Government, I think that he had better look to his own record before he seeks to criticise others.

§ Mr. Allan Stewart
My right hon. and learned Friend will be aware that the heads of the generating boards are anxious that the Scottish flotation should go ahead as fast as possible—either before or certainly at the head of the list of English flotations. Can my right hon. and learned Friend say anything about the timing, particularly as export opportunities have been increased by recent announcements?

§ Mr. Rifkind
My hon. Friend is correct that the export opportunities have improved. That will also benefit the coal industry, to which the hon. Member for Midlothian (Mr. Eadie) referred. The consequences of the announcement that I made last week will be in one respect easier to implement in Scotland than south of the border. We had already decided to put nuclear power stations into a freestanding Scottish nuclear company. That makes the organisational changes easier to apply to the new arrangements.

§ Mrs. Ray Michie
In view of the uncertainty in the electricity industry following the shambles last week and the unknown increase in nuclear costs, how does the Secretary of State intend to protect the small electricity producers which at present sell their product to the North of Scotland Hydro-Electric Board? The payment to them has already been reduced by 7 per cent. since 1986.

§ Mr. Rifkind
The precise arrangements between the North of Scotland Hydro-Electric Board and small producers in the Highlands and Islands is a matter for the contractual relations between the board and the companies in question. Nothing that was announced last week will change that. I very much hope that the small, independent producers will continue to play what will 341 inevitably be a modest part, because of surplus capacity in Scotland, but nevertheless an important part in electricity generation during the next few years.

§ Sir Peter Emery
As part of my right hon. and learned Friend's negotiations could affect the whole of the British Isles, can he assure the House that in view of its great importance to the nation, the distinguished research work on fast breeders carried out at Dounreay will be encouraged to continue?

§ Mr. Rifkind
Dounreay and its activities are a matter for my right hon. Friend the Secretary of State for Energy. However, I know that those who work at Dounreay and the Department of Energy are interested in a diversification of the research work carried out there. I very much hope that that will prove to be possible. As for the economic implications of the decision on Dounreay, I think that announcements to be made later today will outline useful opportunities for the Highlands and Islands Development Board to diversify economic opportunities in the north of Scotland.

§ Mr. Dewar
I certainly do not wish to dwell on the shambles that has been created in the Scottish electricity industry in recent weeks by a Government who seem to equate disorganised retreat with a planned policy. Let me invite the Secretary of State to look to the future. Has he seen the article by Patrick Donovan in The Guardian today which suggests that Ministers are still hoping to offset nuclear liabilities against the private sector and that the Scottish companies have been asked to agree higher than expected terms for the purchase of nuclear power? Is there any truth in that, and will the Secretary of State confirm what I think was said by the Minister of State on television last week: that there will be continuity of pricing and no attempt to save the Treasury's embarrassment at the expense of the consumer?

§ Mr. Rifkind
As a central part of my comments last week, I said that there would be no adverse implications for tariffs as a result of last week's announcement. I add that tariff continuity, which is the principle that we have enunciated, is of great importance to us. As nuclear represents a higher proportion of the industry in Scotland compared with the industry in England and Wales, there are implications for what would be the rate of return on nuclear investment. We have explained to the nuclear company, the South of Scotland electricity board and the hydro board the basic principle that should be accommodated to ensure that tariff implications for the general public are no different from what they would have been had the whole industry been privatised.