§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.]
§ 10 pm
§ Mr. Kevin Hughes (Doncaster, North)
I am grateful for the opportunity to bring the matter of the closure of Thorpe Marsh power station before the House. The closure was announced on 8 June, and is a disaster for my constituency and for many of my constituents who work at the plant.
The blame for the closure must be laid fairly and squarely at the door of the Government. I hope that the Government will get their act together and get an energy policy before it is too late for the many hundreds of people in my constituency who rely on the power industry for their jobs, features and livelihoods.
The decision to close Thorpe Marsh proves the folly of the Government's energy policy. It will lead directly to more than 200 job losses in my constituency and in the Doncaster area, and ultimately to many more job losses. The 1,000 MW plant is just another casualty of a policy which, through a mixture of incompetence and malice, has rigged the market against coal. As a result, the workers of Thorpe March now have to suffer.
The coal-fired plant has proved itself time and again. In May 1993, National Power News boasted proudly that Thorpe Marsh had set thermal efficiency records for the past two years running. The reason for the success of the plant lies largely with the excellent industrial relations and team approach. Management and unions have worked side by side and given their absolute best to the plant and to National Power.
For the workers, the closure came out of the blue. In the past three years, National Power has invested £40 million in new equipment at the plant, and the future of Thorpe Marsh seemed secure. Yet we are now told that there is no option but closure. The workers at Thorpe Marsh have done all they can to keep the plant successful; they even accepted 120 redundancies in March. Now the remaining 232 jobs are also to go. That is a profound disappointment to all those involved, and a shock to the local community.
Thorpe Marsh workers will feel the most immediate effects of the loss of the plant, but many other groups of workers in Doncaster will also be affected. Bentley and Hatfield pits both lie in my constituency. Both are currently undergoing so-called market testing, and both rely on Thorpe Marsh to buy one third of the coal that they produce. Last year, Bentley supplied 270,000 tonnes to Thorpe Marsh, and Hatfield supplied 400,000 tonnes. On Friday 11 June, the last deliveries of coal to Thorpe Marsh from those two pits were made. The plant will rely on stockpiles between now and the closure date next March. That has massive implications for both Bentley and Hatfield. With one third of their market gone, their chances of surviving beyond market testing have been seriously undermined.
Where will the two pits find new markets of that size now? The closure is a huge blow to all the men at the two pits, who had at least been offered some chance of a future but who have suffered a serious setback with the announcement of the closure of Thorpe Marsh. With an unemployment rate of 13.6 per cent., Doncaster is way 969 above the national average, and further rises caused by the closure of Thorpe Marsh will make matters even more difficult.
However, should the closure of Thorpe Marsh also force local pits to close, the long-term unemployment effects will decimate many towns and villages in the area. White collar jobs, along with mining jobs, will go. Local businesses, especially small businesses, and those involved in mining supplies will be badly hit.
It has been estimated that the possible effects of the closures could add as much as 6 per cent. to the present unemployment total. The implications go far beyond the tragedy of Thorpe Marsh. That is why I call on the Government to help. It is a Government-created problem, and the Government must solve it. I do not want to see any more job losses and economic difficulties in Doncaster. I hope that the Government are as concerned as I am about the economic impact of their energy policies on areas such as Doncaster, and that they are finally willing to redress the imbalance in our energy markets.
The Government's energy policy, or lack of one, is at the heart of the debate. Privatisation of the electricity industry sounded the death knell of the coal industry and, with it, coal-fired electricity generation. The Government have stood idly by while regional electricity companies have invested in gas-fired plant when ample capacity already existed in the generating industry. Regional electricity companies want their own generating stations so that they can produce and sell their electricity, at whatever price they want, to themselves. Either the Government do not understand what that will mean for consumers and the size of their electricity bills, or they do not care.
The electricity consumer is playing for the dash for gas and for the building of the expensive new plant that is needed before one watt of electricity is produced. The costs of that plant outweigh any cost benefits of an alternative fuel, which will actually add to rather than reduce consumers' bills. It is only when there is a shortage of capacity that building such an amount of plant can be justified on cost grounds, yet the Government have let the dash for gas continue.
The Government have persisted in the fiction that burning gas is an efficient way of producing electricity, and an efficient use of the nation's energy resources. However, gas burned in power stations gives only 52 per cent. efficiency, and that is at maximum, whereas gas burned in industrial and domestic use is more than 90 per cent. efficient.
That is a dire waste of our scarce energy resources, especially in the light of the alternative of coal fuel, which has fewer alternative uses in the industry and in homes and which has served Britain so well in the past as an efficient generator of electricity. Instead of encouraging the most efficient use of an increasingly scarce energy resource, the Government have allowed coal-fired stations to be closed and have let regional electricity companies continue their profiteering. They have stood by and allowed consumers to be exploited once again.
The consumer is being exploited even more blatantly by the fossil fuel levy, which is subsidising a nuclear industry that has crippling plant, safety and decommissioning costs. With 10 per cent. of all fuel bills going to support the 970 nuclear industry, the consumer is being forced to give a massive subsidy to the industry, and almost 20 per cent. of Britain's fuel is being heavily subsidised. Nuclear Electric received subsidy of more than £1 billion last year, and that subsidy came straight from the pockets of consumers, rich and poor alike. That industry cannot compete with other sources of fuel because of high costs, yet its markets are guaranteed.
Regional electricity companies are forced to buy the output of the nuclear industry, and the consumer is forced to pay the costs of the consequent inefficiency. The amount of electricity that is being sold in that way is on the increase —from 47 to 57 TWh per annum over the past three years. Nuclear power output continues to rise and consumers, are paying more for their electricity to subsidise that expensive white elephant.
The folly of the policy is demonstrated by the case of Trawsfynydd power station. That nuclear power station has not produced enough electricity in the past two years to light a 60 watt bulb, yet it remains open. It has been staffed by 560 people for all that time, costing taxpayers and consumers a small fortune. That should be compared to the model of the Thorpe Marsh power station. It is a comparatively efficient generator, has low costs and has produced good results. For their efforts, the workers and management are now rewarded with redundancies and closure.
The experience with the interconnector has proved that the Government's energy policy is a farce. Only this Government would be barmy enough to allow electricity to be imported when we have surplus capacity. The Government allowed the interconnector to become a one-way traffic, making Electricité de France more like simply another power station, rather than an emergency supply.
The Government's perversion of the energy market has created such waste and such costs for consumers. The nature of the market desperately needs to be tackled, and the interests of consumers and workers protected. It is that wasteful policy that has caused the closure of Thorpe Marsh. It is simply not true to say that coal has no market or that coal-generated electricity is not efficient. Coal-fired power stations are simply not being allowed to compete with gas and nuclear fuels. We have already lost 6,000 MW of coal-fired generating capacity and we look set to lose another 3,000, only to see it replaced by gas powered plant.
A new gas-fired station is being built only 20 miles down the road from Thorpe Marsh at Keadby near Scunthorpe and will have a 750 MW generating capacity. Where is the justification for closing one efficient plant and replacing it with a new plant, incurring all the costs of building and commissioning? How can such a wasteful duplication be based on sound economic arguments? The point is that there is no justification.
The Government's policy lacks any overview or coherence. It has pitted one energy source against another, encouraged duplication and waste, endorsed high costs and high prices for the consumer and penalised efficient coal-fired generation. In so doing, the Government are jeopardising many thousands of jobs in power generation, coal mining and related industries in the Doncaster area.
Have the Government not noticed the destructive effects of their energy policy? The Minister must admit that, through incompetence or design, his Government have set the energy market against the coal industry and all 971 those who work in it. The closure of Thorpe Marsh will have disastrous consequences for the economy in my constituency and in many other localities.
Thorpe Marsh power station is an effective plant, with a dedicated staff who have found a recipe for success in teamwork and hard work. They represent more than simply a branch of a company—they are an important part of the local community, and have given a great deal back to Doncaster in the past few years. Thorpe Marsh should be given a chance. It should be given back the chances that the Government took away when they wrecked Britain's energy market and condemned the coal industry.
Thorpe Marsh must be saved. The only thing that will save it is intervention from the Minister. Over the past 14 years, the Government have stacked the cards against the coal industry and we are all paying the price for that incompetence. It is time for the Government to tackle the problems that they have created. I call on them to intervene to correct the appalling imbalance that they have created in the energy market, and save Thorpe Marsh power station from closure.
§ Sir Harold Walker (Doncaster, Central)
I want to support my hon. Friend the Member for Doncaster; North (Mr. Hughes) who has outlined a tragic case. I attended the official opening of Thorpe Marsh power station. little thinking that I would have the sad experience of bemoaning the consequences of its closure in the House. The Minister will recall that I recently led a deputation with my hon. Friend about the appalling consequences for the region of the pit closure programme and the serious economic difficulties that we faced. I little thought that we would have to face an additional hammer blow.
It will not affect merely the power station's employees, many of whom are my constituents, but will have a knock-on effect, further exacerbating the problems caused by the closures of pits and railways. Those matters are interconnected, as my constituency and that of my hon. Friend depend on the three industries, which together face a crisis.
As my hon. Friend said, we are not facing a natural catastrophe, such as the floods in north Wales or fire. The disaster was created by Government policies. The Government must provide the answers for the thousands of people in my constituency and that of my hon. Friend who are suffering as a consequence of those policies. They face misery and hardship and, unless the Government intervene, there is little likelihood of those people obtaining new employment and a new future.
I want the Government today to say not only what they will do about the consequences of the closure of Thorpe Marsh power station, but what they will do to help my constituency and that of my hon. Friend which will be, to put it mildly, blighted by the Government's policies.
§ The Minister for Energy (Mr. Tim Eggar)
I am delighted to see you, Mr. Deputy Speaker, in the Chair yet again on a coal-related matter.
I understand the concern felt about this subject. I well remember the deputation led by the right hon. Member for Doncaster, Central (Sir H. Walker), accompanied by the hon. Member for Doncaster, North (Mr. Hughes). We 972 discussed in detail the widespread concern then felt in Doncaster about the impending closure of the two pits. I felt that that was a useful meeting, at which we had a frank exchange of views. I hope that those present felt that I was able to provide reassurances about our plans for development area status for the region and the issue of an enterprise zone in south Yorkshire.
I know that the hon. Member for Doncaster, North made a case for locating the enterprise zone in somewhere other than the Dearne valley. He did not mention it in his speech tonight, but I know that he feels that the announcement about Thorpe Marsh—and its possible implications for other pits in the region—bears on the issues that he and others were making at the previous meeting. I assure him that we shall bear in mind those representations.
I also recognise that it is a particularly sad moment for the employees at Thorpe Marsh. I do not think that there is any doubt that the station has performed well, and the employees have done what they can to improve the plant's efficiency. The closure announcement is linked to two factors: the capacity of the market to absorb the station's production and the fact that the station is old.
The right hon. Member for Doncaster, Central said that he was at its opening; he did not refer—perhaps understandably—to the fact that that was more than 30 years ago. It is commonly recognised that the station is one of the older stations still in operation. Drax, which is perhaps the best example of a modern station, has a generating capacity no less than four times the size of Thorpe Marsh's.
When Thorpe Marsh was opened, it represented a new type of technology and a new level of thermal efficiency, but everyone recognises that it has been overtaken by developments since then. It is also widely recognised that, without extensive retrofitting, coal stations have a finite life.
I do not wish to raise false hopes or lay myself open to the charge of misrepresentation, but I should point out that the closure announcement by National Power is not necessarily the end of the story for Thorpe Marsh. The Director General of Electricity Supply has made it clear that he wants greater competition in electricity generation, and he has drawn particular attention to the possibilities for competition in coal-fired generation. Professor Littlechild has also made it clear that the generators could and should do more to make redundant generating plant available for sale to third parties.
One advantage of the early announcement of this closure is that it will at the very least provide enough time for real negotiations with potential purchasers. I do not want to raise hopes, however, because I genuinely do not know whether potential purchasers will emerge. I do know that there are companies looking for investment opportunities in coal-fired plant in this country, and that the director general is keen that such opportunities should genuinely exist. I also know that both National Power and PowerGen are aware of that. I ask the hon. Gentleman to bear this in mind, although I do not want to mislead him or his constituents about the possibility of further life for Thorpe Marsh.
§ Mr. Kevin Hughes
Can the Minister confirm a story carried on a local television news programme in Yorkshire this evening to the effect that two private generators are 973 interested in purchasing the Thorpe Marsh power station? Does he have any knowledge of that; if so, will he elaborate?
§ Mr. Eggar
I am afraid that I do not know what was on the programme—I did not see it. I am not aware of any such interest in Thorpe Marsh. I am aware that a small number of companies have expressed interest, in principle, in entering into serious negotiations about the possibility of purchasing older, coal-fired plant. I understand that some companies wish to examine the possibility of retrofitting such plant, which I have been told can be done cost-effectively, and which has been done in the United States to considerable effect. Operating costs have been reduced, and the operating efficiency of older plant has been increased.
I do not think it fair to the employees of Thorpe Marsh or to the people of Doncaster to raise hopes which I am not sure can be fulfilled, but it is right to point out that such an option exists.
The hon. Gentleman referred to the role of nuclear power and of the new gas-fired stations. There was reference to the inefficiency of producing electricity from gas. The new gas-fired generating plant has a thermal efficiency of above 50 per cent., and that figure is rising as each new piece of plant comes on stream. Currently the most efficient coal-fired plant has an efficiency level of below 40 per cent., so there is a considerable gap. Gas has become competitive as a result of technological breakthrough in terms of the development of the combined cycle.
I—like many other hon. Members on both sides of the House, I suspect—believe that there may very well be a similar technological breakthrough in the development of coal-fired technology, which will improve thermal efficiency, as well as the environmental operating factors. Of course, in considering the environmental aspects of coal-fired plant, one must always bear in mind the fact that, by definition, it will be virtually impossible to remove all carbon emissions. As far ahead as, with existing technology, one can reasonably predict, this will always be an environmental disadvantage for coal as against other generating methods, including gas and nuclear generation.
974 We have been told that nuclear is clean. There is no doubt that, in terms of emissions, it is considerably cleaner than both coal and gas. However, it would be inappropriate at this time to rejig the debate that we had at the time leading up to the coal review and the matters that were investigated by the Select Committee. It is fair to point out, however, that the Select Committee, as well as the Government, recognised that there was a role for nuclear power and that the avoidable costs were low. The Select Committee did not argue for an end to the building of gas-fired plant.
The hon. Gentleman made some remarks about Trawsfynydd. That nuclear station is not operating, as it has been necessary to develop a safety case for the inspectorate. The result of the inspection is awaited. I appreciate the hon. Gentleman's concern about Bentley and Hatfield. I realise why he and his constituents are worried. I do not know exactly where the coal flows will go. That is a matter for British Coal and for the generators. However, I strongly believe that there is a market for deep-mined British coal. That is why the Government have made a subsidy available and why we are committed to the market testing period to which the hon. Gentleman referred.
I understand why the hon. Gentleman has raised this matter on the Adjournment. I understand the immediate response to the announcement about the closure of Thorpe Marsh. Everybody realises that we have a stock of older coal-fired plant, which is not competitive and is bound to face replacement. It is not competitive with nuclear or gas plant or, critically, with the most modern coal-fired plant.
It would not be appropriate for the Government to intervene on an issue of this kind. It is clear that National Power, the owners, believe that there is no market for the product of the plant and that keeping it open would undermine the viability of other generating plants, which they regard as more productive and more competitive. It is possible that other entities will be interested in the plant, and I know that the director general will want to pursue that possibility.
I thank the hon. Gentleman for raising this very important issue. I have taken careful note of all the points that he has made.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes past Ten o'clock.