HC Deb 14 December 1992 vol 216 cc97-116 8.28 pm
Mr. Keith Mans (Wyre)

I am grateful for this opportunity to discuss the nuclear industry and its importance to the north-west. It is timely, not only because of the current energy review but because my hon. Friend the Minister visited Sellafield today. I trust that his visit was successful and was not completely curtailed by the need to return to the debate; I hope that we will soon see the start of the operation at the thermal oxide reprocessing plant as that plant is vital to employment in Cumbria and will make an important contribution to our balance of payments over the next 10 years. It cost £1.85 billion to build, and £1.6 billion of that money came from abroad. When it is up and running, it will result in 2,000 jobs, either directly or indirectly.

Until now, much of the public debate on the energy review has been about coal, with only passing references to gas and nuclear power, most of which have not been complimentary. Those who want to see more coal and less gas burnt use the limited nature of gas reserves as a reason, forgetting, in the process, that coal reserves, too, are finite and will become increasingly more expensive to mine as time goes on. That contrasts with the plentiful supplies of nuclear fuel available in Britain into the next century and beyond. We have rightly invested considerable sums in recycling schemes to ensure that that will be the case. Strangely, though, schemes that, if applied to any other industrial process, would be widely applauded by environmentalists are condemned by them in this case. The debate associated with the review has also involved grossly inflated costings for nuclear energy.

It is of considerable concern to many in the north-west that the review has taken the course that it has. The north-west can claim to have been involved at the start of the nuclear age in the early 1950s and now, 40 years later, the region still employs the vast majority of people involved in the nuclear industry. Well over 100,000 people in the north-west are involved, either directly or indirectly, in the region's four nuclear power stations—which have a generating capacity of more than 3,000 MW each year—in its production and reprocessing installations for nuclear fuel and in its research and development activities. Many of the jobs are highly skilled and the technology is very advanced.

In my opinion, those facts alone warrant a closer look at the industry than has so far been evident in the review. If employment is one of the criteria for deciding the number of coal mines that will remain open, we must remember that any resulting redundancies in the nuclear industry will simply transfer unemployment from one region to another. If that happens, it is likely that the redundancy payments provided to those involved in the nuclear industry will be less than those provided to coal miners—to say nothing of the difficulty that former nuclear workers will have in finding employment in some of the more remote locations in the north-west which have nuclear installations, such as Sellafield.

If the development of more efficient and cleaner technology for generating electricity is an important consideration for the review, the nuclear industry's record is impressive. It would be a grave error if we reduced our commitment to the nuclear industry—one of our remaining world-class industries—as the loss of engineering skills alone would be most damaging.

Those arguments, compelling in themselves, essentially support the main economic argument for nuclear power. Those who use jobs, rather than economics, as their leading argument, including some—I stress "some"—in the coal mining industry, make people highly suspicious about the true cost of coal. No one denies that the cheapest electricity on the grid today is nuclear power, at between 1.2p and 1.4p per kWh. Similarly, no one denies that, despite its previous problems, the industry's nuclear power stations now produce a larger contribution to our energy needs—at around 22 per cent. of electricity generated—than ever before. Last week was a record week in itself for the production of electricity by the nuclear industry. For the first time, more than 8,100 MW was produced, and our power stations are now some of the most efficient in the world when it comes to load factors.

The real argument is not about running costs but about the other costs of nuclear power. Although the cost of building nuclear power stations is high, much of that cost has already been written off because of the length of time for which Magnox stations have been operating; that applies equally to coal-fired power stations. Therefore, the fairest way of comparing the two is through their running costs. As I said, at 1.2p to 1.4p per kWh, nuclear power is almost twice as cheap as coal, at between 2.8p and 3p per kWh.

If capital costs are taken into account, as they will be with electricity from Sizewell B and, it is to be hoped, Sizewell C, the figure will be between 3p per kWh and 3.9p per kWh for nuclear stations, which compares favourably with that for the new combined cycle gas-powered stations, in respect of which capital costs are taken into account at the outset. The figure for new coal-fired power stations with flue gas desulphurisation equipment fitted is well above those figures. Indeed, retrofitting existing coal-fired power stations with FGD equipment makes coal even more uncompetitive, adding 0.5p per kWh to the cost.

Mr. William O'Brien (Normanton)

On four occasions, the hon. Gentleman has referred to the coal industry and its effects on power generation. The last thing that I want to do is to cross swords with him over the coal and nuclear industries, but will he explain what the cost will be of demolishing and clearing away nuclear power stations that no longer serve any useful purpose? Will he deal with that in his speech?

Mr. Mans

I most certainly will; I am coming to that very point now.

The real problem over costs arises when one is discussing the non-fossil fuel levy. I hope that what I have to say will answer the question asked by the hon. Member for Normanton (Mr. O'Brien). First, that levy is not solely for the nuclear industry. It can be used in respect of renewables too, and could be regarded as a first stab at a carbon tax. In the case of nuclear power, it is used to offset decommissioning costs or, more specifically, the rather vague estimates of what they are likely to be.

It is becoming clear that those costs are not likely to be as great as first thought. The experience of Berkeley—the first Magnox station to initiate decommissioning—shows that the estimates were rather higher than the actual costs. Whatever the costs turn out to be, however, it makes a great deal of economic sense to spread them over as long a period as possible by keeping Magnox stations operating for as long as possible. If the Magnox stations are shut down prematurely, there will be less money in the reserves to cater for their decommissioning. If we keep them going for longer, we shall not only get cheaper power on to the grid but make better provision for decommissioning costs.

What is debatable, however, is whether nuclear generators should be saddled with the costs at all. None of the fossil fuel generators have to make provision for their back-end costs—clearing up contaminated land and slag heaps, as well as meeting subsidence claims in the case of coal and dismantling redundant rigs around our coasts in the case of gas, all of which are highly expensive operations. Surely it is only fair—

Mr. Martin O'Neill (Clackmannan)

The hon. Gentleman has just mentioned gas for the first time in his remarks. Perhaps we are having an unrealistic battle between the nuclear and coal industries. Gas has a role to play, and it would be less than fair if he ignored that fact or failed to pay attention to the fact that, in the calculation of coal prices for the grid, many of the start-up costs for gas are not being properly addressed. Does the hon. Gentleman intend to refer to that or does he intend to restrict the debate to the relative merits of the nuclear and coal industries? If the latter is the case, he will render rather arid and narrow a debate that could have provided the north-west with a crucible in which to melt a number of materials.

Mr. Mans

The hon. Gentleman may have heard me refer to gas on two previous occasions; but the majority of my remarks will be aimed at the nuclear industry, simply because I feel that, in the debate on the review so far, an awful lot of attention has been paid to the coal industry and not enough to the nuclear industry. I sincerely hope that other contributions will include further references to the gas industry. I shall refer to gas generation on a couple of occasions but not at great length.

Surely it is only fair that, if Nuclear Electric is to provide for its decommissioning costs, as I have already said, so should everyone else. If there was ever an unlevel playing field, this must be it. Indeed, it is made even more unlevel by the fact that Nuclear Electric inherited from the Central Electricity Generating Board £10.5 billion-worth of liabilities whereas, since 1982, the coal industry has received £14.5 billion of subsidy from the taxpayer.

I have left until last the oddest aspect of the debate. It could be termed the dog that did not bark—namely, the environmental aspects of generating electricity. As a former member of the Select Committee on the Environment, I am, to say the least, surprised at the lack of concern shown by organisations such as Friends of the Earth, Greenpeace and, indeed, the Campaign for Clean Air at the prospect of continuing use of coal-fired power stations and the huge environmental damage that that could inflict on the atmosphere through acid rain and carbon dioxide. The high sulphur content of British coal makes the former a particular problem, and I have already mentioned the high cost of fitting FGD devices.

Coal produces millions of tonnes of carbon dioxide a year. Indeed, we find a fair amount of carbon dioxide emissions coming from gas-fired power stations as well. Nuclear installations, however, produce hardly any carbon dioxide at all. If the industry is having to pay for the possible future environmental problems posed by decommissioning nuclear power stations, surely it should also pay for the environmental damage being done by coal and gas-fired power stations right now.

The only explanation for the uncharacteristic low-key response of environmental groups on the subject is either that they have been nobbled by Arthur Scargill and place the preservation of coal-miners' jobs above the need to improve the environment and above the jobs of workers in the nuclear industry or that they have allowed their anti-nuclear prejudice to override their desire to cut air pollution. Those organisations must come clean and decide whether they exist to destroy the nuclear industry because of its past association with nuclear weapons or whether they are genuine in their wish to improve the environment above all else. Perhaps people such as Jonathan Porritt should consider more closely the views of probably the most respected environmentalist alive today, Professor James Lovelock, who points out that carbon dioxide produced from coal in gas-fired stations is a real environmental problem, whereas nuclear energy is only a perceived one.

One distortion that is repeated by Greenpeace and others is the hazard to health posed by radiation from nuclear plants when people experience more than 10 times the maximum permitted level in nuclear installations if they live in an area which has high levels of radon from underlying rocks. Even more ironic is that if British Nuclear Fuels Ltd. wished to replace its power station at Calder Hall on the Sellafield nuclear site with a coal-fired one, it would not be permitted to do so by the nuclear inspectorate because of the higher than permitted levels of radiation in coal-fired power stations. Indeed, if the nuclear inspectorate were empowered to control levels of radiation in coal-fired power stations that are not on nuclear sites as well as those that are on nuclear sites, it might have to order the immediate shutting down of every coal-fired power station in the country.

Mr. Nicholas Winterton (Macclesfield)

I am following my hon. Friend's argument very closely and I find myself in considerable sympathy with much of what he is saying. However, is he not going for overkill in his support for nuclear power and his hostility to coal in particular and, perhaps to a lesser extent, to gas? Is it not vital that we have a long-term secure energy policy in which nuclear power and coal have a major part to play? Does my hon. Friend also concede that gas burnt in power stations is very inefficient and, in the long term, quite expensive? We are depleting a finite resource, and we are not sure how much gas we have available.

Mr. Mans

I am in considerable agreement with my hon. Friend. I believe in a balanced energy policy. We have to gain our electricity from many different sources. Indeed, even under the original proposals that the Government put forward for the use of coal, we would still end up in 1995 producing 45 per cent. of our electricity from coal, 20 per cent. from gas and about 22 per cent. from nuclear power. I would certainly regard that as a balanced energy policy. However, we are discussing the review itself, and the review will obviously consider an increased coalburn.

We have to look very closely at the effects, both environmental and in terms of cost and jobs, of running down the nuclear industry when we do not need to do so. That 22 per cent. of the total nuclear energy consumed provides a fair amount—perhaps it might go up by a few more per cent.—and it provides an important contribution to a balanced energy programme.

My hon. Friend's final point related to the supply of gas, the supply of coal and, indeed, nuclear fuel. Coal, as well as gas, is finite. We have a considerably greater quantity of available nuclear fuel, and that gives us considerable security of supply. If I have over-emphasised the nuclear case, it is only to try to get the balance right as a result of the over-emphasis on coal in the debate and in the energy review to date.

Returning to what I was saying about the environmental effects of coal-fired power stations, particularly in relation to radiation discharges, Greenpeace and others must either admit that they have either over-emphasised the radiation risk in nuclear power plants or pay equal attention to the higher levels of radiation elsewhere.

Many of us in the north-west have no wish to see miners made redundant, but we do not want nuclear power workers to lose their jobs because of the present problems in the coal industry. It is important that the energy review clearly states the relative costs of different sources of energy in a fair way and fully takes into account the environmental benefits and disbenefits of nuclear energy, gas and coal. I hope that my hon. Friend the Minister for Energy will deal with the point that has already been made a couple of times in the past few weeks about our commitment to reducing carbon dioxide emissions and stabilising them to a specific figure by the year 2000, and that he will say whether the energy review will be carried out within those parameters. I hope that we will not be unable to meet those targets as a result of the energy review.

In the north-west, we believe that, if that is done and if there is a fair review, the nuclear industry will have a bright future, producing cheap clean power. I hope that, as a result of the debate, its case will not go unheard during the present energy review.

8.48 pm
Mr. Tam Dalyell (Llinlithgow)

I thank the hon. Member for Wye (Mr. Mans) for his well-constructed, well-informed speech and for taking the trouble to telephone me at home on Friday, after learning of his luck in the ballot, to invite me to contribute.

I shall concentrate on THORP in the light of a four-hour visit last year and in the light of seven official visits to Sellafield, an area in which I spent five years at a small school at Gosforth, when the parents of many of my friends worked at Drigg. I have real concern for the area. I should also like to associate my hon. Friend the Member for Copeland (Dr. Cunningham) in every sense with much of what I shall say.

I should like to speak well of the Minister. He will recollect that, this year, he came to the annual dinner of Trade Unionists for Safe Nuclear Energy—TUSNE. He made what I described, moving the vote of thanks, as an excellent speech, and I am happy to repeat that praise in the House tonight. That speech greatly pleased Bill Morgan of the Amalgamated Engineering Union, and Gordon Lee, the Minister's hosts and the trade union leaders who have done so much to change attitudes towards nuclear power in my party. I pay a public tribute to TUSNE.

The Minister will recollect that, during his speech, he pointed out that THORP was seen as crucial to the overall commercial relationship between Britain and Japan. That struck me in a most forceful way. THORP has made BNFL one of Britain's biggest yen earners. THORP already has secure orders worth £9 billion—more than half from overseas—and it is expected to attract a further £3 billion of foreign earnings, if overseas confidence is retained.

Even in a worst case scenario, THORP will make a £500 million profit in its first 10 years. If the Minister disagrees with any of those figures, he should say so in the House, because I believe that THORP will provide an economic benefit to the United Kingdom that is conservatively estimated at £900 million in 1992 money values, using an 8 per cent. discount rate.

The leading independent accountancy firm, Touche Ross, has examined with BNFL the economic value of THORP to the United Kingdom and it supports the estimate of £900 million.

Mr. William O'Brien

Rumours have been circulating about THORP. Are we assured that it will operate in the future? There has been some rumour that it will not provide the necessary facility for the disposal of waste as planned. Has my hon. Friend any information on that?

Mr. Dalyell

I heard the same rumours as my hon. Friend and, bluntly, I cancelled engagements in Scotland in order to be present at this debate, because I am greatly alarmed at them.

I know that my hon. Friend the Member for Normanton (Mr. O'Brien) has many connections with the Yorkshire coalfield, and in no sense do I see this as a coal v. nuclear issue. I believe it involves the question of gas; here, I am in what Mill called the deep slumber of a decided opinion. I am against the use of gas, full stop, on the grounds that it represents the worst kind of short-termism and takes up the chemical feedstock of the future. I believe that my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) will go into those effects in more detail.

I can tell my hon. Friend the Member for Normanton that, if THORP were delayed for nine months before starting up, it would result in an overall loss of profit to BNFL of £108 million during its operational lifetime.

If THORP did not operate at all, there would be a potential loss of profits of more than £1 billion. THORP has cost £1.85 billion to build, around 90 per cent. of which was spent with British companies. It has been supported by £1.6 billion of inward investment from overseas customers. Do the Minister and his advisers accept that those figures are roughly right?

I have scrambled over much of that engineering marvel—for that is what it is—and any layman would be extremely impressed by the safety-conscious engineering that went into THORP.

It is also important to consider that THORP has employed 5,000 workers directly and sustained 10,000 jobs at the peak of construction. About 3,000 workers are currently employed in THORP, many in the constituency of my hon. Friend the Member of Copeland, who has done so much to support the nuclear industry in Labour party circles and elsewhere.

I understand that THORP will directly employ 1,200 when operational for a minimum of 10 years, and probably for several decades. If THORP is given the go-ahead, it will directly sustain a further 900 jobs at Sellafield and 800 jobs, at least, in supplier companies. Are those figures acceptable to the Minister?

The supposedly difficult issue relates to the environment. The new discharge authorisation proposed by the Department of the Environment for the Sellafield site, and not just for THORP, is more restrictive than the existing one. That is completely contrary to the impression given by Greenpeace. The new authorisation will introduce a lower radiation dose limit for the critical group, those who are living near Sellafield who are most affected.

In its campaign, Greenpeace has singled out krypton 85 as its principle environmental argument to stop THORP from operating. Krypton 85 is an inert gas, mildly radioactive, which does not accumulate in the body or enter the food chain. In radiological terms, the annual effect of Krypton 85 emissions on the critical group is equivalent to drinking a glassful of mineral water a day, or eating a small packet of Brazil nuts once a year or spending an hour in Cornwall—a dangerous thing to do—where there are higher levels of natural background radiation.

Dame Elaine Kellett-Bowman (Lancaster)

The hon. Gentleman has emphasised the employment implications. Will he confirm that krypton does not harm sheep, which are another important source of employment in my area?

Mr. Dalyell

I spoke briefly on the telephone not only to BNFL but to a number of independent people, and my understanding is that krypton has no effect on what one might call the general Chernobyl problem.

I am not complacent about nuclear matters, because there is the enormous problem of what happens to ill-maintained power stations, which is why it is so important to have twinning arrangements with Kosloduy in Bulgaria, Smolensk and elsewhere. I pay tribute to James Hann, Robin Jeffrey and others in Scottish Nuclear who have developed such links, and to English Nuclear companies.

The maximum radiation dose to any member of the critical group of krypton 85 is one thousandth of the average dose to the individual in the United Kingdom from natural radiation. Claims by Greenpeace that krypton 85 will have a major effect on the climate have been dismissed by leading independent scientists.

The krypton 85 issue was dealt with fully at the THORP public inquiry. There is no new evidence to justify delay. The hon. Member for Lancaster (Dame E. Kellett-Bowman) will recollect from our mutual happy days in the European Parliament—particularly, in my case, from my days on the Energy Committee—that these inquiries go into matters in great detail. It is frivolous to say that the inquiry does not matter.

On the contrary, the critical group will receive a radiation dose from krypton 85 that is one thirtieth of that estimated at the time that evidence was given to the inquiry. Nevertheless, provision has been made in THORP for back-fitting krypton removal equipment should a viable technique become available. Those genuinely keen on the environment should oppose money being wasted on the phoney problem of krypton 85, and rather urge that it is spent on programmes that will genuinely help the environment and the community—energy efficiency, schools and hospitals. The plant would cost well over £50 million excluding operating costs.

Time is limited, and the hon. Member for Wyre (Mr. Mans) has confined the debate to the north-west, but the Minister knows that no speech from me on the subject would be complete without deep criticism of the Government on a related matter—Dounreay. This is the worst example of short-termism. I gather from the hon. Member for Caithness and Sutherland (Mr. Maclennan), following our recent interventions on the Minister's statement, that the industry would have been prepared to provide much more money if the Government had been prepared to ask. There seems to have been a negative reaction from the Government.

In 2020, when I shall probably be kicking up daisies but the Minister and others may be here, there will be a feeling that we made a terrible mistake in 1992, because the idea that development into physics can be mothballed is unrealistic. We shall have to go to the French or Japanese. I beg the Government to think that they might be wrong about Dounreay, and to think and think again.

I am grateful to the hon. Member for Wyre for giving me the opportunity to speak.

9.2 pm

Mr. Nigel Evans (Ribble Valley)

I am glad that my hon. Friend the Member for Wyre (Mr. Mans) came first in the ballot, because it gives us an opportunity to air our views on the nuclear industry at a time when a general review of energy supplies is being conducted. So far, the whole debate has been unbalanced by the concentration on the coal industry, so it is useful for us to redress the balance.

Although I do not have a single mine in my constituency, when the announcement was made in October, I received more than 200 letters from constituents asking that the Government think again. When I heard the announcement, I thought that I would be inundated with letters, and I was not wrong. We all welcome the announcement of the review, and eagerly await its findings next year.

The Government's energy policy based on diversity and security of supply and economy of cost, has served the country well. It has directly benefited consumers in their own bills and indirectly benefited industry in the cheap supply of electricity. My plea is that the Government continue that policy, which has served us so well. The reason for that plea is that any change in energy policy will have its costs.

Some people argue that coal is more expensive. My hon. Friend the Member for Wyre stated that nuclear power is less expensive, but it depends on the side of the argument from which one sets out and the statistics one uses to back up one's case. I have heard various arguments in the past few months from people trying to convince me that their particular fuel—coal, gas or nuclear power—is cheaper than the others. I wish my hon. Friend the Minister for Energy well in the next few months as he reviews the case.

We need a balanced debate on a balanced fuel policy. A sudden move from nuclear-powered energy will prove extremely expensive. Let us consider the diversity argument alone. After the Organisation of Petroleum Exporting Countries caused the price of oil to escalate in 1973, France reconsidered its fuel policy, and turned to nuclear power immediately. It now has 75 per cent. reliance on the nuclear power industry. Britain has also suffered from escalating prices and had difficulty in getting coal supplies, especially during the strikes of the 1970s, but not so much during the 1980s. We do not want to rely on a single source of fuel, whether it be coal, gas or nuclear power. We need a diverse supply of fuels.

If we continue the "dash for gas", we shall have a long time in which to regret that decision. Several questions need to be answered, such as, how long will the supplies of gas last? I have heard various estimates, ranging from 20 years upwards, but we do not know. Once we have started the dash for gas, the price of gas will escalate, which will put out of synch all the claims about how cheap gas is. There is only one way for the price of gas to go and that is up, as demand for it increases. We should also consider the future exploration and extraction costs of gas.

Several hon. Members have mentioned our skilled work force. My hon. Friend the Member for Wyre said that about 100,000 people in the north-west were associated within the nuclear industry, so we have many skilled people working at the frontiers of research and development. I believe that we would be loth to turn our backs on their skills. If we export their skills now, we shall import the fruits of that policy in the future, which would be extremely expensive.

It has been said that our becoming reliant on importing fuels from abroad will have a regrettable effect on our balance of payments. It has been estimated that the cost for 1993–94 might be about £800 million, so that: figure must be put into the melting pot.

Mr. Nicholas Winterton

My hon. Friend is developing an excellent case for the nuclear industry. Can he say how much it is now costing us to import French nuclear fuel? Does he agree that it would be sensible for us to build on our existing nuclear industry and provide our own nuclear fuel instead of buying it from the French?

Mr. Evans

I am extremely grateful for my hon. Friend's question. I believe that it costs us about £450 million a year.

Dame Elaine Kellett-Bowman

It is not only the cost of the fuel which is important. We have no control over the safety precautions of the French, but we have absolute control over our own, and the wind blows our way.

Mr. Evans

I am very grateful for my hon. Friend's contribution. When considering our energy policy, we must take both comments into account. We need diversity and security of supply. Our nuclear industry has an excellent safety record. As my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) has pointed out, if there is a problem in a nuclear plant in another country, we may suffer if the wind blows in our direction. We must have as much control as possible over our own destiny.

As other hon. Members have said, we must be extremely cautious about some of the environmental arguments against the nuclear industry. The industry seems to have had an extremely bad press. The advantage of the nuclear industry for the environment is that it produces no sulphur dioxide, no nitrogen oxide and no carbon dioxide. We must look at the other side of the equation as part of a balanced argument. We should not be wholly against gas or coal, and we should not be only pro-nuclear. We must widen the argument and realise that there are environmental factors on the side of the nuclear industry.

All the gases I mentioned contribute to acid rain and to the greenhouse effect. Worldwide, the nuclear industry has prevented more than 1.7 billion tonnes of carbon dioxide, which fossil fuel burning would have produced, from going into the atmosphere. That fact must also be recognised.

I said that the nuclear industry had had a bad press. That may be because of its defence uses and its military capability. It seems that the connotations of the word "nuclear" have made many people fearful, and I recognise that. However, the nuclear industry must be one of the most regulated industries in the country. It is not only self-regulated, but regulated by the Government at several levels. European directives and European legislation regulate the industry. The local authorities certainly regulate it, and several lobby groups watch carefully what goes on in the industry.

It seems that these days, anyone with a camcorder can make a programme. At present, two people are making a programme for Channel 4 on the nuclear industry in which they plan to say how bad and dangerous it is. We must consider the other side of the question. Good news means no news for television. A position is taken at the beginning to give the industry a bad name for ever.

We must have a balanced debate and we must give it more air. The nuclear industry has provided us with security, it has provided us with research and development, and it has provided us with high-technology jobs. It has provided us with competition which has had a downward pressure on prices.

I wish Labour Members well who support the nuclear industry and a balanced fuel approach to our energy needs in trying to persuade some of their hon. Friends to change Labour's policy on the nuclear industry. It is important that they are given as much support as possible so that we can carry on with a diversity of supply.

My hon. Friend the Member for Wyre has said that the nuclear industry has been important for the north-west, and he is right. It has also been important for the country generally. It is time that its importance was recognised, and it is time that the hard work of the dedicated people who work in the industry was given the recognition it deserves.

9.12 pm
Mr. Andrew Miller (Ellesmere Port and Neston)

I am grateful to you for calling me, Mr. Deputy Speaker. It shows the impartiality of the Chair, in view of our exchanges during points of order last Friday.

I spent the first third of my working life in geology, albeit at a junior level, and I worked with radiation for a substantial period. I think that I have some expertise that it might be worth bringing to our debate.

I remind the hon. Member for Ribble Valley (Mr. Evans), who argued in favour of a balanced energy policy —an argument with which the Opposition agree—of a point I made to the Minister a few days ago in the House. The workers in the nuclear industry and the trade unions on behalf of those workers have argued in favour of maintaining our coal mining industry. That is particularly important, because everyone with practical experience of the energy industry realises the relevance of a balanced policy.

Reference has been made to coal, oil, gas and, fleetingly, renewables. Gas is a particularly interesting fuel. One aspect of its use which has not been referred to so far is its vital importance to the chemical sector as a feedstock. I have received a letter from the managing director of a major British company which manufactures fertiliser in my constituency. He pleaded with me to support the coal mining case. Quite simply, he argued that the Government's policy would drive up the price of gas, which would undermine his business, as it would drive up the price of its feedstock. He did not—and I would not—argue against the use of gas as part of a balanced policy because clearly, from time to time, gas could be extremely useful when there is a need to move very quickly from low levels of energy usage to high levels of energy usage.

In relation to the debate, there are some important employment aspects in the north-west. British Nuclear Fuels plc employs almost 16,000 people in the United Kingdom, all bar 650 of whom are located in the north-west of England. Seven thousand people and an equal number of contractors are employed at Sellafield, to which my hon. Friend the Member for Linlithgow (Mr. Dalyell) referred. Clearly, the nuclear industry generally and BNFL in particular ensure that the north-west is home to a large number of highly trained personnel.

Earlier this year, I raised the impact of the decision to split the business of BNFL in my constituency between a unit entitled URENCO and BNFL. The dominant part of BNFL's activity was the rundown of the acitivity on the site primarily engaged in the development of weapons grade material. Clearly all hon. Members welcome the fact that such material is no longer required.

However, the skill level on that site still runs the risk of being unnecessarily dissipated. There are enormous skills on the site. The hon. Member for Ribble Valley stressed the high level of engineering skills in the industry. It is a criminal waste of talent to allow those skills to be dissipated. Although I understand that the issue crosses ministerial responsibilities, I commend to the Minister for Energy the report about diversification produced by the Parliamentary Office of Science and Technology. That aspect of the nuclear industry must be considered in relation to the report.

Mr. Nigel Evans

Does the hon. Gentleman agree that, if some of the skills were lost, they would not be lost just in the nuclear industry? Some of the skills would be exported abroad. While we would lose them, other countries—perhaps our competitors—would gain from those skills.

Mr. Miller

I agree with the hon. Gentleman. There is a brain drain, and we also lose a huge local engineering base.

In my constituency, which has a high concentration of petrochemical companies, there is a huge demand for welding skills. Hon. Members who are participating in the debate will be aware that the welding skills of British Nuclear Fuels are at a high level. It seems to be a criminal waste simply to dissipate those skills and not use them, crossing over the frontiers of the energy industry. We should not compartmentalise the debate or the industry.

The United Kingdom needs a balanced energy policy. The job losses that could occur, which have been referred to by my hon. Friends, and those which have occurred will have an enormous knock-on affect. Invariably, when job losses are associated with high skill activities, the knock-on impact to supply companies and through the chain in our economy is significant. I urge the Government to take urgent action to ensure that the changes which are currently taking place in the nuclear supply industry are dealt with in a way which ensures that there is no loss of our skill base, and which continues to promote the importance of gas in the context of a balanced policy.

Earlier in the debate, references were made to radon, and comparative arguments were made about safety in Cornwall and various other parts of the country. There are big gaps in our knowledge in some important fields. I urge the Government to undertake greater epidemiological studies so that debates about leukaemia clusters and the like can be conducted in a more rational environment—similarly, the debate about krypton, which was referred to by my hon. Friend the Member for Linlithgow (Mr. Dalyell). From time to time, I agree 100 per cent. with Greenpeace, but I fear that it is wrong on this issue. Its information is based on a misunderstanding of the particular isotopes.

We need a great deal more study and activity to ensure that public confidence is restored. We need a policy that takes into account the economics of such a policy, the environmental issues which have been referred to and other important aspects which are of national interest.

In considering this debate as part of the wider debate about future energy supply which is taking place in our society, I urge the Government to take cognisance of the view expressed—I come back to my first point—by the workers at British Nuclear Fuels. They support the continuation of the coal industry. They see it as part of a balanced supply debate, and that is in the best interests of the nation.

9.24 pm
Mr. Peter Bottomley (Eltham)

The United Kingdom is good at deep-mined coal, the technology involved in it and the supply of equipment to that industry. We are also good, in international terms, at the nuclear industry and nuclear reprocessing. We now get the maximum economic benefit from our nuclear plants. I think that one of the unexpected successes in the Government's policy on fuel industries and the electricity generating industry in the past few years has been the pressure put on all sorts of people to produce safe efficiencies.

I should like to add one point to what has been a rational debate—I pay tribute to both sides of the House for their contributions to it. It is not worth trying to save lives at high expense if those lives are not likely to be lost. I use an example that has nothing to do with the nuclear industry. A debate has been going on in the letters page of The Economist. Someone pointed out that, if every baby carried on an aeroplane had its own seat, the cost of saving a life would be $2,500 million.

I believe that, in the nuclear industry, mainly because of public fallacies, people have been required to spend hundreds of millions of pounds to save lives that are not at risk. I do not know whether I exaggerate by saying that, if my body was a by-product of the nuclear industry, it would not be allowed out into the atmosphere. I suspect that my natural radioactivity is about 10 times the level of that of a nuclear plant. Greenpeace would probably say that that was not exactly right.

When I was at the Department of Employment and was responsible for health and safety at work, public demands were being made that the Government should set levels of radiation emissions which were so far below the level of natural emissions, not only from the sun but from natural products of our geology, that it was laughable. People gain prominence as environmental and health campaigners by promoting such a policy, yet we accept the much greater risk when we ride a bike or motor bike, go for a walk or drive a car or travel in an aeroplane or train, which is so much safer. The politician in me boggles at the duplicity of some of those who retail ideas and fantasies as if they were facts.

If we were having a full-scale debate on energy we would start with energy conservation. Reducing the waste of energy is the fastest and cheapest way of cutting the amount that we have to generate. However, the date is not about energy in general but about the effect of the nuclear industry in the north-west. I pay tribute to the people in the north-west for all that they have done.

I hope that the THORP reprocessing plant will open. The hon. Member for Linlithgow (Mr. Dalyell) put the point fairly. If any hon. Member has alternative views on the facts that the figures that he gave, I hope that he will give them to the House. On the facts and figures that the House has so far, there is every justification for THORP starting as soon as possible, fulfilling the contracts and turning nuclear reprocessing into a worthwhile industry for Britain, reprocessing both our own by-products of nuclear generation and those of others.

I should like to see Britain continue to produce between 20 and 40 per cent. of our electricity from coal. I cannot narrow it down much further, because we do not have sufficient information. I am not entirely against the use of gas for electricity generation. We must remember that during my lifetime the move from town gas to natural gas was associated with gas taking a dominant position in domestic heat generation. In effect, that is what a great deal of electricity generation is at second hand. The idea that we shall continue with the dash for gas and make it a stampede is false. I expect that in 25 years the known gas reserves will still be 25 years' supply. The regional electricity companies are not likely to put many more of their eggs into that basket because the effects of going for 15-year price contracts has had a sufficient impact on other sources of electricity.

I finish with a comment about not the north-west but south-east London. In a ward in my constituency I have unemployment running at about 60 per cent. If the cost of maintaining extra jobs in the mines runs at £100 million a month for 25,000 jobs I calculate that that is £4,000 per job per month.

In Woolwich, in the centre of the borough of Greenwich, £6 million a year for three years would make it possible to regenerate the royal arsenal site outside my constituency, where at one stage there were 70,000 jobs. That is now down to 1,000—equivalent to a pit. Those 1,000 jobs will be gone in one year. If we could have a tiny share of the money that is being discussed in the coal review, we could reduce unemployment to 15 or 12 per cent. or the national average of about 10 per cent. It would make a great deal of difference.

In my constituency I also have tower blocks which were built in the past 25 years. Individuals, many on income support, many elderly and some one-parent families, have to pay £20 a week—

Mr. Deputy Speaker (Mr. Michael Morris)

Order. I know that the hon. Gentleman produced an allusion in his first sentence, but he cannot continue to develop it.

Mr. Bottomley

If electricity from the nuclear plant in the north-west could be more competitive with gas, so that it costs my constituents about £4 per week to be warm, rather than £20 a week to be cold, the north-west will contribute to the welfare of people throughout the country. That is my second reason for contributing to the debate.

9.30 pm
Mr. William O'Brien (Normanton)

I shall be brief, but I feel that I should contribute to the debate because the hon. Member for Wyre (Mr. Mans) included in his remarks the present review of electricity generation and manning, and I appreciate the chance to make this brief intervention.

There has had to be an energy review because of the Government's policy of privatising electricity generation without making proper provision for all the means used to generate electricity and without establishing a fair playing field. Gas producers have a 15-year contract with the generators, but the coal industry has only a three to five-year contract, which makes it obvious that there is a difference between the treatment of the two contracts and some unfairness.

We have had to review the way in which electricity is produced because of the way in which the colleagues of the hon. Member for Wyre decided to close collieries. The announcement that 31 collieries would close immediately rightly generated the wrath of the people.

I wish that the hon. Member for Wyre had stayed on the subject of the impact of the nuclear industry in the north-west. He was the only Member to deride the coal industry. I would be prepared to listen to him if there were proof that electricity produced from nuclear power were cheaper than that produced from coal, but there has been no evidence of that. Coal prices have decreased during the past six or seven years, and there is evidence to show that the price of coal will continue to fall in coming years, so no one, either inside the House or outside it, can say that coal is not the cheapest way to provide energy in this country.

Mr. Mans

The hon. Gentleman says that coal is cheaper, but what are the prices? I suggested that electricity generated from nuclear power costs between 1.2p and 1.4p per kWh. Perhaps the hon. Gentleman would like to give the figure for coal.

Mr. O'Brien

Reams of evidence have been produced in the House, outside it and in the Select Committee on Energy, and it is clear that in the long term, coal is the cheapest way to produce electricity in this country. Had the Government pursued the flue vent system being developed at Grimethorpe—a village that is being crucified because of colliery closure—energy could have been produced without resulting in emissions into the atmosphere and the problems that they cause. We have to review energy production costs because the hon. Member for Wyre voted for the privatisation of electricity generation, which generated our problems. If he wants to search his conscience, he should think carefully about what he did in the past. We are in this position because of the Government's policy. Our coal is cheaper than the coal that we import and it will continue to be cheaper in the next century.

The Minister for Energy (Mr. Tim Eggar)

indicated dissent.

Mr. O'Brien

The Minister shakes his head, but I hope that he will take note of the evidence. We should support the coal industry, not kill it.

9.34 pm
Mr. Martin O'Neill (Clackmannan)

I am glad that my hon. Friend the Member for Normanton (Mr. O'Brien) had an opportunity to speak, because the debate would have been unbalanced had there not been a contribution from the voice of the coal industry. He made a number of points that needed to be made and I shall not go over them again.

It is customary to congratulate the hon. Member who is successful in securing a place in the Consolidated Fund Bill debate. If I congratulate the hon. Member for Wyre (Mr. Mans) on nothing else, I must congratulate him on the time at which we started this debate. Bitter experience in the House has shown that nothing is more miserable than getting up at 2 am or 3 am for a Consolidated Fund Bill debate. This debate is important and I understand why anyone with nuclear concerns—few hon. Members in the north-west are not concerned about the nuclear industry—would wish to raise the matter in this evening's debate.

We are preoccupied about three aspects of the industry: first, employment; secondly, the important question of THORP at Sellafield; and thirdly, both the energy review, about which much has been said—I hope to hear from the Minister about it, if not tonight then not too late in the new year—and the nuclear review to take place in 1994. I Imagine that there will be some difficulty in unscrambling one review from the other.

We talk in terms of some 30,000 people being directly employed "on site" in the nuclear industry in the north-west. That is roughly the number of miners presently in jeopardy in the coal industry. Purely by statistical chance, more than 100,000 people are engaged in the nuclear industry and its associated employment in the north-west and 100,000 people are engaged in mining and its related activities. It is not particularly helpful to such a debate to trade off one set of figures against another, because the orders of magnitude are roughly the same.

Monday seems to be the day when Members of Parliament go to Sellafield. I was there last Monday and the Minister was there today. I was greatly impressed by what I described to the local press as the paranoiac character of the preoccupation of the management of British Nuclear Fuels and the unions with safety at the plant. Perhaps because of years of misrepresentation or long periods of insecurity and uncertainty, they have been more than reasonably concerned with establishing safety and fail-safe procedures. Anyone who talks to them, listens and watches cannot but be impressed by that. We must recognise that the programme has been developed on a cushion of financing which most industrial developments would be happy to deal with. There has been a tremendous amount of cost-plus external finance.

Serious points must be made about how best to deal with nuclear waste and about the price of uranium. As the man asking the way to Cork was told, had we had another idea, we might not have started from here. However, the plant has 10 years' employment ready to be taken advantage of and a considerable amount of work beyond that, although it is not clear whether it will be at maximum capacity. Anyone who visits Sellafield and looks at the pond where nuclear waste is lying, waiting to be treated—there is about two years' worth of work already in situ—can see the attractiveness of the proposition to BNFL management.

I welcome the caution of Her Majesty's inspectorate of pollution. It is a number of years since it carried out its lengthy and full inquiry, which need not be replicated unless there are good reasons for doing so. The Opposition will not advocate the blind replication of such an inquiry. We are happy to stand by the views of Her Majesty's inspectorate of pollution on the matter, as we take it to be independent, rigorous and thorough. If something else is required, we shall support that, but at present I am not certain that such an option is either necessary or desirable. I speak as a layman and await with interest the outcome of the inspectorate's deliberations.

In the short term—in the nuclear time scale that is taken to be 50 years—there are alternative options for dealing with nuclear waste. Scottish Nuclear has said that it favours the dry storage option, but that can only be for 50 years, after which time it will have to reconsider the position.

THORP at Sellafield has important employment implications. My hon. Friend the Member for Copeland (Dr. Cunningham) is never slow to advocate the case of those employees. When considering employment, not just at Sellafield, but across the whole of the north-west, it is important to raise two issues: the tremendous number of jobs at stake and, equally important, the fact that the training programmes of so many of the companies and organisations involved in nuclear power are second to none in that region.

It is no accident that public enterprise has been the engine for training across the country. The importance of the training programmes can also be seen at Rosyth and Devonport dockyards. In both parts of the country, public money has been put behind young apprentices to create the skilled work force of today. When organisations are privatised, problems are created, as there is no will on the part of so many private companies to train people to the standard that BNFL and other firms in the north-west regard as central to their purpose.

The nuclear review could be prejudiced over the next few weeks by the handling of the so-called coal review. I say "so-called" because one cannot consider one element of the energy equation in isolation from another. It was unhelpful that the over-zealous nature of some hon. Members today when defending the nuclear industry meant that they dismissed the claim for coal. That claim is considerable because of its effect on the balance of payments and because, over the past five or six years, the coal industry—unlike any other—has not raised its prices, thus enabling the fledgling private electricity companies to receive a bonus from one of their major energy sources which was far in excess of anything that they had anticipated.

The coal industry shows all the signs of being able to enter the next century while consistently reducing its prices. Therefore, the forecast of the hon. Member for Eltham (Mr. Bottomley) that the coal industry's contribution will be 20 to 40 per cent. comes nowhere near the figure that the industry is capable of producing.

Mr. Mans

The Labour party agrees that we should stabilise CO2 emissions by the year 2000. How does the hon. Gentleman propose to do that if he is advocating that more than 40 to 45 per cent. of our electricity needs should be met by coal?

Mr. O'Neill

The Government's own guidelines anticipate that it will be possible for the generating companies to emit levels of carbon dioxide compatible with the targets to which the Government have committed themselves internationally, to apply between now and the end of the century. Over the next few months the Government must invest in clean coal technologies, which are at the prototype stage. If the Government introduce those technologies they will be in a position greatly to improve environmental conditions.

There are downsides for the environment from all forms of energy generation. Even allowing for deep storage facilities there will be problems with the disposal of waste. Part of the problem arises from the nuclear industry's accounting-by-mirrors during the 1950s, 1960s, 1970s and early 1980s. In other words, the industry is reaping the whirlwind of years of over-optimism. At the same time, a number of its plants are working efficiently. Only in the past week we learned that 22 per cent. of our electricity is now generated by nuclear means. That suggests that the industry has been able to come to terms with certain technological and environmental considerations, not to mention the vagaries of the coal regime.

The north-west makes a considerable contribution to the energy needs of this country. The industry there is a major employer and contributor to technological innovation and training. We pay tribute to the efforts of the many people engaged in it, and we hope that they will be able to continue those efforts for many years to come.

9.46 pm
The Minister for Energy (Mr. Tim Eggar)

I am extremely grateful to my hon. Friend the Member for Wyre (Mr. Mans) for raising this important subject for debate. It has been a good debate, in which hon. Members have fully explored the issues.

Nuclear power is a significant component of the United Kingdom's generating mix and a major employer in the north-west. Nuclear power does not produce acid rain, and it can play a significant role in combating the greenhouse effect. I therefore suggest that, far from being part of the environmental problem, it is part of the solution to that problem.

The hon. Member for Warrington, South (Mr. Hall), who briefly attended our debate, made a sedentary reference to Chernobyl. I remember it only too well because I had to come to the House and make a statement the day the news broke. So no one is more conscious than I am of the dangers that can be associated with improperly run and inspected nuclear plants.

There is no point in supporting nuclear power regardless of the costs of the power generated by nuclear means. For that and other reasons, we have made it clear that our support of nuclear power is conditional on the industry being economic and maintaining its already high safety standards. Areas such as these will be covered by the 1994 nuclear review.

There has been much reference, implicit and explicit, to the coal review. The House will understand that it would be wrong of me even to allow myself to be accused of prejudging the results of that review, but it should be borne in mind that closing down the nuclear Magnox stations would mean not only losing the revenue from electricity sales but bringing forward the decommissioning of the stations and hence the reprocessing of spent fuel. The cost to the public purse of any early end to the Magnox station operation could be heavy, and there would inevitably be redundancies in the nuclear industry.

BNFL, which makes the fuel for Magnox stations, has estimated that nearly 3,000 jobs would be lost within two years, principally at its own Magnox stations and at the Springfield plant in the constituency of my hon. Friend the Member for Wyre, where Magnox fuel is manufactured. The Government will take into account those and other factors when considering the review.

Much has been said in the debate about the relative costs of one means of generation as against another. It is generally recognised by the House that the calculations are complex and depend critically on the assumptions made and, not surprisingly, the proponents of each form of generation attempt to argue the case using statistics and assumptions that best suit their particular argument.

I make no criticism of that, but I am grateful to my hon. Friend the Member for Ribble Valley (Mr. Evans) for his sympathy as I seek to chart my way through the different arguments. I am not in any way seeking to be critical of other hon. Friends or of Opposition Members, but it is interesting that the only speaker to refer to the interests of the consumer was my hon. Friend the Member for Eltham (Mr. Bottomley). At the end of the day, we must conduct our examination of energy policy in the context of consumer benefits rather than in the context of benefits to different groups of producers. I am sure that the House will bear that in mind when it considers the review.

Lest the House or those outside reach the conclusion that I have joined the feeling running through speeches, that the solution to the review is to dump gas or squeeze it out of the equation, I do not want any more than the hon. Member for Clackmannan (Mr. O'Neil)—to anticipate any conclusion that might be reached on the role of gas. I simply note that the regulator has something to say about the economics of gas stations recently and that, as my hon. Friend the Member for Ribble Valley remarked, there is something to be said for providing and encouraging diversity of energy supply.

Calling a halt to the use of gas in electricity generation, as is sometimes suggested, would have serious consequences for the offshore oil and gas industry. More than 20 per cent. of all industrial investment last year was North sea-related. A considerable proportion of that investment was specifically in gas.

If the hon. Member for Clackmannan thinks that not proceeding with gas stations is a cost-free option, I urge him to study the employment consequences for the North sea oil and gas industry in north-east Scotland and north-east England, and for the many companies that supply that industry.

A number of hon. Members referred to my visit to Sellafield today. I spent a lot of time discussing and visiting that plant, and endorse the remarks of the hon. Member for Clackmannan. We have heard a lot recently from environmental activists, who have been rolling out all the old arguments against the nuclear industry. In particular, they have concentrated them on their battle against the thermal oxide reprocessing plant. Their arguments carry no more weight now than they did in the original public inquiry some years ago. Many of the claims made by environmental groups have been, to put it mildly, terminologicaly inexact.

We have been told by those groups, for example, that THORP's economics have been threatened by an increase in projected decommissioning costs from £750 million to £900 million. They are wrong. The former figure was in 1989 money, the latter in today's money. The real cost, and the project's economics, are unaffected. We have been told that THORP will cost the electricity consumer a lot of money. Again, that is wrong. The nuclear price uplift is set by a fixed formula in the contracts, which last until 1998. The rest of the price is set in the competitive market. Nuclear Electric simply cannot pass on increases in the cost of reprocessing. Furthermore, Nuclear Electric made a commercial decision last year to contract for more reprocessing in THORP.

We have been told also that THORP will be uneconomic for the United Kingdom or the taxpayer. They are wrong again. According to the latest advice from BNFL, abandoning the project would cost the United Kingdom as a whole over £1 billion and 3,000 jobs, even if there were no requirement to repay overseas customers their investment.

The figures quoted by the hon. Member for Linlithgow (Mr. Dalyell) are familiar, and I believe that they reflect advice from BNFL. My officials have discussed them with BNFL; we cannot verify them in detail, but we have no reason to believe that they are inaccurate.

The outrageous allegation has been made that German customers of BNFL are ready to cancel their contracts. I understand that the two German companies specifically mentioned by Greenpeace have confirmed to BNFL that they intend to honour their contracts. The BBC has publicly withdrawn its comments about the contracts, and I find it inexplicable that Greenpeace and Friends of the Earth have not followed its example. If those organisations are serious environmental bodies and want to be treated as such, they must have some regard for the truth.

It has also been alleged that THORP has benefited from illegal EC state aid. There have been no secret subsidies and no cover-ups; no payments have been made or promised to BNFL under schedule 12 to the Electricity Act 1989. Loan guarantees for BNFL are made under the Nuclear Industry (Finance) Act 1977, which was promoted by the Labour party. The existing guaranteed loans to BNFL are from the European investment bank and Euratom. Hon. Members may find amusing, but somewhat far-fetched, the suggestion that the European Commission would itself have made illegal loans.

Mr. Mans

Will my hon. Friend answer my earlier question about whether the energy review will take account of the need to stabilise carbon dioxide emissions by the year 2000?

Mr. Eggar

I can assure my hon. Friend that environmental concerns will be taken into account. If he studies the evidence given by Greenpeace and Friends of the Earth, he will observe that their arguments are extremely curious: for example, they want us to reduce greenhouse emissions, but they also want us to burn more coal. Those aims, surely, are mutually contradictory.

We have had a good debate. Let me say to the hon. Member for—

In accordance with Mr. Speaker's ruling—[Official Report, 31 January 1983; Vol. 36, c. l9]—the debate was concluded.