Electricity Generation (East Lothian) (Hansard, 4 December 1996)

§ Mr. John Home Robertson (East Lothian)
I am grateful for the opportunity to raise this subject, which is obviously very important to many people in my constituency. East Lothian is literally the powerhouse of Scotland. It has the capacity to generate almost half the electricity that the country needs, from power stations at Torness and Cockenzie. With the deep mine at Monktonhall, in the constituency of my hon. Friend the Member for Midlothian (Mr. Clarke), who is in his place, and the opencast site in Blindwells, East Lothian people produce a significant amount of coal too.
There are limits to the amount of opencast activity that any area should have to put up with, and I shall be bringing a delegation to see the Minister next month to discuss the case for fairer and more effective planning controls over private opencast developments. Today, however, I want to concentrate on East Lothian's two power stations.
With capacity to generate 1,320 MW at Torness and 1,200 MW at Cockenzie, East Lothian can satisfy fully 42 per cent. of Scotland's peak winter demand of 5,962 MW. Torness employs 630 people and Cockenzie 240, so the industry is crucial to my constituency's economy.
I am obviously not happy about the fact that Scottish Power, and now Scottish Nuclear, have been privatised by the Tory Government, and I am particularly concerned about the irresponsible privatisation of the nuclear industry. Of all industries, the nuclear industry is uniquely sensitive, and should remain under public control and in public ownership.
The privatisation of Scottish Nuclear and Nuclear Electric was the biggest public rip-off of them all. All eight power stations, including the best and newest advanced gas-cooled reactor at Torness, were sold to private speculators for less than the cost of building just one of them—Sizewell B. It was a matter of, buy one power station cheap and get seven more free. Sadly, Torness is one of the freebie stations. It also happens to be one of the best. According to British Energy, Torness power station produced 0.9 TW hours in October—the highest output of all eight nuclear power stations in the United Kingdom.
Having bought Torness cheap, the board of British Energy wants to run it on the cheap, too. It has announced plans to cut the work force from 630 people to 550–80 job losses on a nuclear site where safety considerations must be paramount and undermanning could create risks. I should like to cite one example of such risks, which has been drawn to my attention by employees at Torness power station.
I understand that, ideally, teams of staff should be dedicated to each of the two reactors. That principle is already being breached by the penny-pinchers of British Energy. Towards the end of August, an operations engineer from reactor II was sent to do some work on reactor I, which was off load for refuelling. He received an instruction to shut the main steam isolator for the turbine, which he duly did, but, unfortunately, he shut the valve on reactor II, which was on load, instead of that on reactor I, which was shut down; so reactor II tripped, and it took a day to bring it back on load.
1011 I offer that as one cautionary tale of the false economies of undermanning at such a power station. We shall have to be extremely vigilant now that the Government have given the nuclear generating industry to private owners. I use the term "given" deliberately, because that is what has happened to Torness.
I turn to the imminent Government decisions that will be crucial to the future of Cockenzie power station. As the smaller of Scottish Power's two main coal-burning stations, Cockenzie currently operates as a major standby generator, available to produce electricity if there is a problem at another station or for export to England and Wales.
Cockenzie is very good at that job. Its engineers can fire up their plant very quickly, and the costs are very competitive for that purpose. The plant is in good order, and Scottish Power intends to invest in further improvements. The station should have a secure future until 2010. Since Scottish coalfields produce low-sulphur coal, the environmental impact would be acceptable.
If Cockenzie could gain access to wider markets, its output would increase and its costs would become even more competitive. Conversely, if a predatory competitor in the electricity market were to dump cheap electricity on to the already over-supplied Scottish market, the future of Cockenzie power station and the jobs of 240 of my constituents would be in serious jeopardy. I ask the Minister to face up to the Government's responsibility on both those counts.
Scottish Power is striving to increase the capacity of the transmission system to make it possible to export electricity. There is 9,323 MW of generating capacity in Scotland, which is 1,870 MW more than what is required to cover our peak demand, plus a reasonable planning margin. As Scotland's standby station, Cockenzie could be seen as that spare capacity. Its average load factor last year was just 21.3 per cent., so Cockenzie must export if it is to survive. In financial terms, it is very competitive, so Scottish Power is able to export much electricity from Cockenzie to England and Wales through the recently upgraded cross-border interconnector.

§ Mr. Phil Gallie (Ayr)
Will the hon. Gentleman give way?

§ Mr. Home Robertson
I would be grateful if the hon. Gentleman would bear with me, since I want to make a number of points, and time is short.
Last year, 2,154 GW hours were exported from Cockenzie down the interconnector to England and Wales—so far, so good. To use Cockenzie to its real potential, however, access is also needed to markets in Northern Ireland and—hopefully—the Republic of Ireland. An interconnector between the electricity systems of Scotland and Northern Ireland would be good news for the Scottish electricity and coal industries, and very good news for consumers on the island of Ireland.
The two parts of Ireland are the only parts of the European Union that do not have access to electricity supplies from other countries. I know from contacts with people in the Republic—through the British-Irish parliamentary body—and hon. Members who represent Northern Ireland constituencies that they would welcome access to competitively priced electricity from Scotland.
1012 Scottish Power and Northern Ireland Electricity have worked up detailed proposals for an undersea interconnector, which have been considered in great detail at public inquiries in Scotland and Northern Ireland. Both inquiries led to recommendations that the project should go ahead with overhead pylons carrying 275 KV lines from Coylton in Ayrshire to the coast, and an undersea cable to connect it to the system in Northern Ireland.
A written answer from the Minister that I received only yesterday confirmed: The Reporter"— at the public inquiry— considered that undergrounding of any part of the proposed line was unnecessary. I am very well aware that electricity transmission pylons are detrimental to any landscape; we have plenty of them in East Lothian. I clearly remember the public inquiry into the Torness pylon lines, which was very controversial. The original proposal was to take the lines by the easiest route along the foot of the Lammermuir hills, but the inquiry proposed a less obtrusive alternative route between the hills, and it was accepted by the reporter and the Secretary of State at the time.
A suggestion that all the visible stretches of the lines should be laid underground at massive expense would not have been taken seriously. If that was now on offer, I would be truly delighted if sections of the cable at Johnscleugh, Mayshiel and Humbie were put underground, but I do not honestly think that that is realistic. The pylons are a sacrifice that we had to make for the benefit of the wider Scottish and national economies.
Today, the Secretary of State for Scotland seems to be playing by different rules. I do not criticise people in South Ayrshire for seeking to minimise the impact of that important development on their landscape, except that I must say that some of them seem to have slightly short memories. It is not all that long since coal and electricity were important elements in their local economy, too. The reporter at the inquiry considered those representations, and he concluded that the Scottish-Irish electricity interconnector should go ahead.

§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
Is not my hon. Friend aware that South Ayrshire produces more opencast coal than any other part of Scotland and, indeed, the United Kingdom? A number of applications are also currently being considered by the local authority. Coal still plays an important part in the economy of South Ayrshire.
Is my hon. Friend also aware that we have to take account of environmental considerations? Hundreds of people turned out to public meetings in Maybole—not rich landowners, as suggested by my hon. Friend, but ordinary people—to object to the siting of the pylons. Is it not reasonable that the Secretary of State for Scotland should make a proposal for undergrounding just part of the line where it passes through the most beautiful scenery in Scotland? Is not that sensible, and a reasonable compromise that should be accepted by Scottish Power?

§ Mr. Home Robertson
With respect, no. The Secretary of State is changing the ground rules. If we could start all over again, I would love to put lots of sections of the transmission system in East Lothian 1013 underground, but it is simply not fair to apply completely different rules in South Ayrshire to those which apply in other parts of the country.
The position now is that the Secretary of State for Scotland made an announcement, not in the House but elsewhere, two weeks ago, and he brought his political perspective to bear—at the behest, I suspect, of the President of the Board of Trade, Mr. Struan Stevenson and other people who should know better.
The Secretary of State announced that he was minded to grant consent only if four sections were put underground, at a cost of £28 million, which could put the whole enterprise and the jobs of 240 of my constituents in jeopardy. He has given Scottish Power until 20 December to respond to that unwarranted and unprecedented imposition, and I can only speculate about their reaction. I have serious fears about the news that my constituents at Cockenzie might get for Christmas. In the name of fairness to my constituents and of consistency in planning decisions, I appeal to the Minister to reconsider that extraordinary decision.
I refer to another reply that the Minister gave me yesterday. I asked him what estimate he had made of the value to the Scottish economy of an electricity interconnector with Northern Ireland. His reply was, "None." He simply said that it was a matter for the private companies concerned, Northern Ireland Electricity and Scottish Power.
With respect, it has enormous potential value to the Scottish economy. The agreement with Northern Ireland Electricity would run for 15 years and would represent a coalburn of 600,000 tonnes, which is worth about £20 million a year. The interconnector would also attract £61 million of European union grant support. All that could be put in jeopardy.

§ Mr. Gallie
Does the hon. Gentleman recall environmental arguments that the best way to use Scottish coal was sending the electricity by wire? The proposal would mean coal by wire to Northern Ireland. Will the hon. Gentleman also comment on North Yorkshire, because there seems to be a block on upgrading the interconnector there, which would also be of great value?

§ Mr. Home Robertson
I am aware of that. We have so much excellent generating capacity in Scotland, and it should be used. Any artificial blocks, whether in Yorkshire or through planning constraints in South Ayrshire, should be reconsidered urgently.
But that issue is not the only one threatening the future of Cockenzie power station. I urge the Minister to look hard at PowerGen's mischievous threat to construct a gas-fired power station at Gartcosh in Lanarkshire. There is manifestly no need for any more generating capacity in Scotland. We have more than enough already. The idea would create only 35 jobs in north Lanarkshire, so it would be a woefully inadequate use of the site at Gartcosh. As the Minister knows, all the Members of Parliament and local authorities in Lanarkshire have expressed their opposition to the plan.
I say that the ploy is mischievous because it seems to be a device contrived by PowerGen to destabilise Scottish Power in its home market. My concern is that the reporter at the inquiry is supposed only to consider purely local planning issues for the Gartcosh neighbourhood.
1014 I have a copy of the paper that has been put to the reporter, including a statement of matters that seem to the Secretary of State to be likely to be relevant to the reporter's consideration of the application, and it lists 12 criteria, all specifically local to the Gartcosh neighbourhood. I fear that those strict criteria for the inquiry could prevent him from taking into account effects elsewhere in Scotland, such as the threat to the economy of East Lothian and the likelihood that a loss-lead gas-fired station at Gartcosh could cause the premature closure of Cockenzie power station, with the loss of 240 jobs in my constituency, not to mention many more in the mining industry and in other parts of Scotland.
The Scottish Office is taking serious risks with my constituents' employment. I am grateful to the Minister for listening to my concerns today; I strongly urge him to give positive and unequivocal support to the principle of the Irish interconnector and to remove any unreasonable conditions that have been considered by the Secretary of State. I urge him also to resist the threat of an unwanted and entirely inappropriate gas-fired power station at Gartcosh.

§ The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch)
I am grateful to the hon. Member for East Lothian (Mr. Home Robertson) for raising this important issue. The energy industry is, of course, of fundamental economic importance, and I know that, with two power stations in his constituency and coal mining interests in the area, he takes a close interest in the subject. I am also glad to see the hon. Member for Midlothian (Mr. Clarke) in his place.
I will turn in a moment to the specific issues that the hon. Member has raised, but I would first like to remind the House of the basis of the Government's energy policy. The Government's aim is to ensure secure, diverse and sustainable supplies of energy in the forms that people and businesses want, at competitive prices.

§ Mr. Norman Hogg (Cumbernauld and Kilsyth)
Can the Minister explain how Scottish Power, behaving in a predatory fashion, can take over Southern Water? How does that square with the objectives of Government energy policy? How do water and electricity mix?

§ Mr. Kynoch
I will not be diverted from the subject of the Adjournment debate today, but I am sure that the hon. Gentleman is aware of the competitive marketplace, and I will be touching on that issue later on.
We believe our aim can be best achieved through the free market, which is the most effective and efficient means for meeting our energy needs. It determines prices best and exposes costs to rigorous test. Competition gives businesses the strongest incentive to meet the needs of customers and empowers the purchasers of fuel and consumers of energy, enabling them to get the best possible deal.
As a result of our policy, consumers have enjoyed real benefits. Since the privatisation of Scottish Power and Hydro-Electric in 1991, electricity prices have fallen by about 8 per cent., with further reductions coming as a result of nuclear privatisation. With the introduction of full competition into the electricity supply industry in 1015 1998, I am sure consumers will benefit yet further from a greater freedom of choice, a greater range of suppliers and from lower prices.
Government should not attempt to impose all-embracing plans about how much energy and what kind should be produced or consumed by whom. Uncertainties about supply and demand, technology, and the behaviour of people and companies, doom such plans to failure.
The hon. Member for East Lothian raised a number of specific issues, and I will try to deal with them in turn in the short time available to me.
On the subject of the Scotland-Northern Ireland interconnector, I should begin by reminding the House that my right hon. Friend has not refused to give the go-ahead to the project. He has looked at the evidence that was presented to the inquiry, as it is proper that he should do, and he is minded to take a different view from the reporter of the weight to be attached to locally significant areas of landscape quality. The areas involved are the Water of Girvan; Nick of the Balloch; Duisk valley; and the Water of Tig and Dunnach Burn.
I repeat, my right hon. Friend has not refused Scottish Power's application. In fact, he has stated that he is minded to grant consent to it, subject to appropriate conditions but excluding the four sections I mentioned, where he is presently minded to conclude that undergrounding of the line is appropriate. Scottish Power and others have been asked to comment by 20 December. The hon. Gentleman will appreciate that there is little more that I can add about that aspect of the proposal at this stage.
My right hon. Friend will listen carefully to what Scottish Power and the other parties have to say, and will announce his decision in due course.

§ Mr. Home Robertson
Will the Minister give way?

§ Mr. Kynoch
I should like to conclude this section of my speech, and I shall give way to the hon. Gentleman afterwards if there is time.
I appreciate the hon. Gentleman's concerns. Electricity generated from power stations in his constituency might well be exported through the interconnector. However, I must repeat that the Government cannot try to second-guess the market. Ultimately, a decision on whether the project goes ahead, assuming that all the necessary legal consents are given, will be a matter for the commercial judgment of the companies involved—Scottish Power and Northern Ireland Electricity.

§ Mr. Eric Clarke (Midlothian)
Will the hon. Gentleman give way?

§ Mr. Kynoch
Briefly, but very briefly, because time is limited.

§ Mr. Clarke
I thank the Minister for giving way, and I congratulate my hon. Friend on raising this issue. May I tell the Minister, who is obviously interested in electricity generation, that the base load is taken up by nuclear power. It is unfair and wrong to say that there is 1016 diversification if nuclear power takes the base load and other stations, especially coal-fired stations, take only peak-period load. That is what my hon. Friend the Member for East Lothian was saying. We cannot make the decision. Why have an inquiry for six months and a report, and then ignore it? Will the Government do the same with Gartcosh?

§ Mr. Kynoch
There seems to be a split in the Labour party about the interconnector. The hon. Member for East Lothian and the hon. Member for Midlothian (Mr. Clarke) are arguing one way, whereas the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) is arguing the other. I wonder whether they could elucidate for the House what Labour party policy is on the subject—and what the hon. Member for Hamilton (Mr. Robertson) might say about it.

§ Mr. Home Robertson
Can the hon. Gentleman cite any precedent for a Secretary of State mucking about with the findings of a reporter at a public inquiry? If the right hon. Gentleman intends to change the ground rules in that way, is there anything to stop my constituents, or people elsewhere, asking for existing sections of the transmission system to be put underground, on exactly the same grounds as those being cited in South Ayrshire?

§ Mr. Kynoch
If the hon. Gentleman had listened to me earlier, he would have heard clearly what the Secretary of State says. I hope that he will agree that it is only proper for my right hon. Friend fully to consider all the arguments put before the public inquiry.
The hon. Gentleman will be aware that the Minister with responsibility for the Northern Ireland Department of the Environment has asked Northern Ireland Electricity to think again about the site of the converter station at Islandmagee. Clearly there are important issues at stake for people on both sides of the Irish sea.
I shall now talk about Gartcosh.

§ Mr. Gallie
Will my hon. Friend give way?

§ Mr. Kynoch
Very briefly, because time is limited.

§ Mr. Gallie
I accept that the Secretary of State is right to take on board local opinions on such issues, and at least to re-examine them. I also accept that the Minister has not totally finished talking about this subject, but may I point out that, when the power station was built at Inverkip, a stretch of cable was put underground, to protect the environment, and that to the high costs involved must be added the continuing revenue costs for the maintenance of that underground cable?

§ Mr. Kynoch
I am sure that my right hon. Friend will note those comments by my hon. Friend, whom I am pleased to see here for the debate, because he has always expressed a great interest in power—[Laughter] I mean, Mr. Deputy Speaker, that my hon. Friend has a great interest in power generation.
The hon. Member for East Lothian has also raised the matter of PowerGen's application to build a power station at Gartcosh. Hon. Members will know that the application has been referred by my right hon. Friend to a public inquiry, which should start next April. My right hon.
1017 Friend has, as is entirely proper, written to the reporter explaining general Government policy on such matters, and mentioning the issues that at present appear to him most likely to be relevant to the decision that he will have to take.
The Government's general policy is clear: matters such as need, location, design and choice of fuel for power stations are usually best left to developers in line with their own commercial judgment. As I have already said, that policy has brought substantial benefits to consumers.
Again, I appreciate the hon. Gentleman's concern about jobs in his constituency, but the Government strongly believe that competition in the industry is in the public's best interests. No one can easily predict the shape of the generating market in future, and it would be foolish for the Government to introduce uncertainty to the market now, when it is showing how successful it is in delivering cheaper and more reliable supplies of electricity.
There does, however, seem to be confusion in some quarters as to what my right hon. Friend's statement actually means for the scope of the inquiry. I should therefore like to make it absolutely clear that it is for the reporter to decide what evidence he believes should be laid at the inquiry. There is no question of my right hon. Friend seeking to limit the scope of that inquiry.

§ Mr. Clarke
Will the Minister give way?

§ Mr. Kynoch
No, I must press on, because of the time.
The hon. Gentleman also raised concerns about nuclear privatisation. I would say that the new arrangements are settling down well. I remain confident that Scottish Nuclear will continue to be an important part of the Scottish economy, and that nuclear power remains safe.
The hon. Gentleman talked about Torness and safety. That, of course, is a matter for the company, within the rigorous safety standards policed by the nuclear installations inspectorate. I know that the matter is paramount for the company.
Scottish Power and Scottish Hydro-Electric are, of course, bound to take Scottish Nuclear's output until 2005 under the nuclear energy agreement. That gives substantial certainty to Scottish Nuclear, enabling it to plan for the future. I am confident that it will rise to the challenge of competition with other generators.
Both in his letter to the Secretary of State and in his speech this morning, the hon. Gentleman referred to opencast mining. I shall look forward to seeing him when he visits me, but I must point out that responsibility for dealing with planning applications and local planning matters rests in the first instance with the local council concerned.
The Government have put in place a firm regulatory and legislative regime to encourage competition and innovation in the energy industries. I am surprised at the defeatist attitude that Opposition Members have taken towards the ability of Scottish Power and Scottish Hydro-Electric, together with the Scottish mining industry, to deal with competition.
Let me remind the House that, since privatisation, the two Scottish electricity companies have not only participated in the competitive market that the 1018 Government created in 1990 but have done so successfully. They have competed fiercely with each other in Scotland—

§ Mr. Home Robertson
rose—

§ Mr. Foulkes
Will the Minister give way?

§ Mr. Kynoch
No, I shall not, because I have four minutes left, and I want to complete my speech so as to cover the topic.

Several hon. Members
rose—

§ Mr. Kynoch
Opposition Members have had quite a say in the debate. Clearly there is a significant split on the Opposition Benches, but there is an Opposition split on almost every policy—and I would like to finish my speech.

§ Mr. Foulkes
On a point of order, Mr. Deputy Speaker. May I make it clear that I am speaking as a constituency Member of Parliament elected to represent Carrick, Cumnock and Doon Valley, not as a Labour party spokesperson?

§ Mr. Deputy Speaker (Sir Geoffrey Lofthouse)
I am sure that that is true, but it is not a point of order for the Chair.

§ Mr. Kynoch
I have noted what the hon. Gentleman said, Mr. Deputy Speaker. Of course he will speak for his constituents, but it would be reasonable to think that there might have been some consensus on the Opposition Benches on a topic that may have such a major impact on Scotland.
I was talking about the two Scottish electricity companies and their success in competing fiercely with each other in Scotland, and also in the market in England and Wales. Of course some business has been lost to suppliers from England, and more business may be lost in future. But both companies have been successful in doing much more of their business in England and Wales, especially since Scottish Power's successful acquisition of MANWEB and Southern Water, which was mentioned by Opposition Members.
As for coal, the Scottish electricity industry has said that it will continue to buy Scottish coal so long as it is competitive in price and quality, and it is taking as much as the coal industry can produce. I have no doubt that the industry will respond to the challenge, and will continue to be a successful supplier to Scottish Power and Scottish Hydro-Electric.
Certainly those companies' commitment to coal has been maintained—indeed, increased. Power stations have been fitted with special burners that reduce the amount of nitrous oxides emitted. Scottish Power has secured a substantial European Community grant to test gas over-burning at Longannet power station, with a view to raising its efficiency and reducing emissions. I was most impressed with what I saw when I visited Longannet not long ago.
The company is also testing at Longannet a new technique that extracts sulphur dioxide efficiently from flue gas. Those developments all exemplify the 1019 entrepreneurial attitude of both Scottish Power and Hydro-Electric, and augurs well for their ability to deal with the competitive threats that the future undoubtedly holds. [Interruption.] Does the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg) want to say something?

§ Mr. Norman Hogg
The Minister has not yet explained to us how all that competitiveness and all those entrepreneurial skills and the rest square with buying a water company in the south of England. What is a Scottish electric company doing buying such a company?

§ Mr. Kynoch
I would have thought that the hon. Gentleman would be pleased and proud of a Scottish company using its expertise to diversify, in the interests of the efficiency of service delivery.
1020 No market is static, and change is inevitable. Opposition Members sometimes find that difficult to take, but the policies of the Government have released the entrepreneurial drive of those major Scottish companies so that they can meet the challenges that face them. Competition drives down costs—

§ Mr. Home Robertson
rose—

§ Mr. Kynoch
The hon. Gentleman knows that I have less than one minute left.
Competition encourages innovative approaches to the provision of services, and that can only be good for consumers and employees—