§ 2.45 p.m.
§ LORD MACDONALD OF GWAENYSGOR rose to call attention to the Report of the Committee on the National Policy for the use of Fuel and Power Resources (Cmd. 8647), and to ask for a statement of Government policy thereon; and to move for Papers. The noble Lord said: My Lords, it has been said that an important thing in every speech is to be sure of your first sentence and of your last sentence. To-day the first sentence is a very obvious one: it must be one of appreciation and gratitude to the noble Viscount, Lord Ridley, and his colleagues who produced this Report. I should not call this Report an epoch-making document, and I certainly should not call it a best-seller or a bedtime story. But I would say that, having regard to the task entrusted to the noble Viscount and his colleagues, the Report is well worthy of perusal by all who are interested in the welfare of this country.
I was not too happy when I first read the terms of reference of this Committee. I realise, and I do not need anyone to remind me, that it was a colleague of mine in another place who set up this Committee. But I thought that their terms of reference were rather too limited. I never liked the first sentence of the terms of reference. Perhaps your Lordships will allow me to read a portion of it—namely,
In view of the growing demands for all forms of fuel and power arising from full employment and the rearmament programme…
I could never see the need for those words. To me they are very dangerous words. They convey the impression that we need not be concerned about the best use of fuel and power except at a time when demand is greater than supply. That is a dangerous doctrine.
§ Last week we listened in this House to a very fine debate on production. We were warned of the dangers arising from from the fact that our rivals in Germany and Japan were now catching up with us, and in some cases passing us, in production. I am not a person to underestimate the importance of maximum production: I think that adequate and maximum production is essential to our future. Nevertheless, I can see us winning the battle of production and at the same time losing the battle of exports and imports, for the simple reason that our rivals are making better use of production, especially as regards fuel, and coal in particular. I think it is unfair to suggest that once the supply of this commodity—the production of which costs many lives every year, and in which every year many hundreds are injured—exceeds the demand we need not be concerned about the waste of the commodity, or about the best use of it. That to me, is a rather dangerous doctrine at the present time. I submit that it may be that the international battle in the field of economics will be decided just as much by the best use of production as by production itself. And, it is from that angle that I am pleased to note that this Committee, when they undertook their task, did not allow their terms of reference to limit them in any way.
I like this sentence in the letter introducing the Report to the present Minister of Fuel and Power:
In the following Report we recommend actions to check the avoidable waste and misuse of fuel and power resources which we have found to exist on a scale which is,"—
and here are very grave words:
and unless remedied will remain, a serious handicap to the nation.
This nation cannot afford any handicaps which can be avoided, and this is a handicap which we could deal with, and deal with effectively. I am not surprised that the ground covered is technical in its nature. It could not be otherwise, and that is one reason why this document, in places, makes not too pleasant reading, though as a whole I think it is very readable, having regard to the subject matter.
§ What we have to consider in your Lordships' House to-day is what we expect from the Government as the result of this Report. Let me say at once that 385 I was not in the least surprised that price considerations were so much emphasised, because price and waste go very much together. I entered the coal industry during the reign of Queen Victoria—that sounds a long way off now. I spent twenty-three years in this industry. I saw very cheap coal, but whenever I saw very cheap coal, excessively cheap coal, I saw excessive waste of coal. The criminal waste of coal when coal was cheap amazed me. I am not surprised that there has been a division of agreement on this Committee as regards the manipulation of prices in order to enforce the economic use of coal. Prices have their place in the economic use of fuel in every country, and I think it is quite true that the more costly fuel is, the less waste there will probably be. I was very pleased indeed that the Committee resisted the temptation to recommend to Her Majesty's Government that we should begin manipulating prices for the purpose of restricting consumption or trying to enforce a better use. I am not without some sympathy for those who recommended an increase in the price of coal for that purpose. At the same time, I am much more in sympathy with the Chairman and his colleagues who resisted that temptation. That is not the way out in dealing with the problem of the best use of fuel.
Before I come to the recommendations of the Report—and I notice that there are forty of them—there are one or two points which have been brought to my notice by outsiders since it was known that I was going to deal with this question to-day. I mentioned one or two of these things to the noble Lord, Lord Leathers, because I thought he ought to know that I proposed to raise these issues, which are not directly concerned with the recommendations, though they are referred to in the Report. The first concerns the use of smokeless fuel. This matter is mentioned in the Report, and needs to be re-emphasised once again here. In Appendix IV, page 93, we find these rather important words—I will read the whole paragraph:
The wider use of the low temperature carbonisation process. This method produces a solid smokeless fuel more acceptable to most householders and more easily burnable than gas works coke in most existing grates.
Some councils in this country are putting in the houses which they are building grates which are intended to use smokeless
fuel, but they are finding this result: that there is a shortage of supply, the price is excessively high and these grates are not being used for the purpose for which they were installed. I saw the other day that the Wrexham Housing Committee had expressed the feeling that the Minister of Fuel and Power could do more than is being done to make smokeless fuel available throughout the country, in order that the houses which are now being equipped to use smokeless fuel should find that fuel available in adequate quantities and at a reasonable price. I know the difficulties. This fuel is in short supply in this country. I shall doubtless be told that Wrexham is a colliery area with five collieries in the immediate vicinity, and, of course, it does seem rather unwise that smokeless fuel should be carried for hundreds of miles to a district which is adequately supplied with local fuel. However, I hope that we shall have a reassuring statement regarding smokeless fuel.
§ I want to raise here another point which is dealt with in the Report. It is urged, and quite rightly, that we should consider setting up a Tariffs Advisory Committee. I do not know how many of your Lordships have been responsible for handling coal prices, but I see one noble Lord in his place to-day, the noble Viscount, Lord Hyndley, who, during the war, was the Controller-General of the Coal industry. I was one of his Lieutenants, as Regional Controller in the North-West, and he and I experienced, during that period, the difficulty of price fixation in the coal industry. It is a very difficult problem indeed, and anybody who has had any experience of the subject will not be surprised to find that here again the Committee were in some difficulties in deciding what they should recommend. What they did recommend finally was a Tariffs Advisory Committee. I have no doubt that a Tariffs Advisory Committee, properly manned and properly managed, could be a good help in dealing with this difficult question and could assist the Minister in deciding the prices of the various fuels, such as electricity and gas, in different parts of the country.
I should like now to refer to a statement which I noticed in yesterday's Liverpool Daily Post—I could scarcely
credit it. The report has a very suitable heading. "Queer Results." and says:
Modern economics produce some odd situations. Electricity users in North Wales, for example, are being told that if they use less electricity they may have to pay more for it. The simple explanation is that electricity boards fear that by learning to economise during peak hours, the public may pursue their saving outside the peak. This would naturally reduce revenue and affect what is called 'the price structure'
I can hardly believe that the electricity board in North Wales, or an electricity board anywhere else, has been responsible for sending out such a statement. I am quite sure that the noble Lord, Lord Leathers, will be able to say something about this statement purported to have been sent out by the electricity board. I cannot believe that if people in North Wales, or indeed anywhere else, reduce their consumption of electricity, it is claimed that the reduced amount should produce equal revenue for the electricity board as if consumption were not reduced. But that is what this means: that if people reduce the consumption, the electricity board say: "Wė shall get less revenue; therefore, we must increase prices to get the same revenue from the reduced amount consumed." That cannot be, and I am certain that the electricity board are not responsible for that statement.
§ Having said that, there are one or two direct recommendations with which I want to deal. As I said earlier, I was called upon for some four years to deal with many of the recommendations in this Report. They are not new recommendations; they are a re-emphasis of old factors. No one will know better than Lord Ridley himself that most of these proposals have been tried, to some extent, but I quite agree with the Report that they need to be tried to a greater degree. What I want to emphasise, first of all, is this. During the war we had, and there are still in existence, very fine efficiency committees, manned in the main by the engineers who had been trained to deal with efficiency in the industry. They were not fully manned. We were short of technologists in that period, as we are now. They did exceptionally good work and, as Regional Controller, I received from scores of employers votes of thanks for the work done by those fuel efficiency engineers in enabling them to save fuel. I am pleased to notice that it is recommended 388 that they should continue. But there is another recommendation, recommendation 17, which suggests that, in addition, an attempt should be made to organise more committees inside industry. To that recommendation I take objection. I think it would be just as well if the industries which are large users of fuel, and coal in particular, had their own efficiency committees, but I am wondering how far this recommendation may lead to the weakening of the fuel efficiency committees of the Ministry itself. We need these men. Taking any big industry it is amazing how much coal can be saved if the industry is run efficiently. Industry cannot be run efficiently without such men being in charge of that side of it.
The next recommendation to which I wish to refer—I know that my noble friends will have many more to mention—is the last one, which says:
The Minister of Fuel and Power should establish a Joint Fuel and Power Planning Board.
I am not quite sure whether the Committee, in making this recommendation, were fully aware of what is happening to-day. In my view, it is important that those dealing with gas, electricity and coal should have a common policy, a common understanding. I think there is a danger that they may come into competition with each other in particular areas. I have never liked the idea of suggesting that in one place the best thing would be to use gas, that in another the best thing would be to use electricity, and elsewhere coal, and trying to manipulate the prices in such a way as to further the sale of the one against the other. It is much better that we should have a common planning board.
§ But what have we to-day? To-day, the chairmen of the various nationalised industries, as coal users and distributors of fuel, often meet jointly, and often with the Minister. I am wondering whether a new board would improve upon that machinery. I should have no objection whatever to an additional board if I could be satisfied that the work was not being done just as effectively at present. I am inclined to think that inside the industry, along with the whole of the controlling authorities of the nationalised industries, there is a board which, to all intents and purposes, is doing the very work which it is suggested the new board 389 should do. In so far as that is being done to-day, I see no need for this additional board. But I fully appreciate what is in the minds of the noble Viscount and his colleagues. They feel that the present machinery is not adequate for its purposes. In that case, if the present machinery cannot be modernised in such a way as to make it adequate, I agree that the recommendation ought to receive serious consideration by the Government.
§ The only other recommendation to which I wish to refer is that dealing with the attitude of the Ministry of Fuel and Power and other Ministries to this Report. It is widely emphasised in the Report that it is important that the various Ministries should themselves exercise the fullest economy in the use of fuel and power. No doubt I shall be told by the noble Lord, Lord Leathers, that that is being done to-day, that the Ministry of Fuel and Power themselves are exercising the fullest economy in every direction in order to reduce the use of fuel. He will also tell me that the other Ministries are responsible for what they do, and that he is not able to interfere. But what I suggest is that if the Ministry of Fuel and Power do not show themselves enthusiastic in the carrying out of the various suggestions in this Report, then it is hardly to be expected that other Ministries will show any enthusiasm. Their attitude will depend very largely upon what is done by the Ministry of Fuel and Power.
§ Though I should be the last to accuse the Minister of complacency and lack of keenness in regard to these recommendations, when I heard the discussion on the Report in another place he did not seem to me to be over-enthusiastic. It may be that it is the make-up of the Minister himself. He is not a man with an enthusiastic temperament and as such he is probably seldom enthusiastic. That may be the explanation. But I certainly felt that the Minister was far too complacent in his attitude towards this Report and these recommendations. I hope that the noble Lord, Lord Leathers, will be able to assure us that this is not the case with regard to the Minister or the Ministry, and in particular with regard to Her Majesty's Government, and that, so far as possible, they do intend to implement the recommendations of this Report.
§ My Lords, in my earlier remarks I referred to the fight for markets. I said 390 then that it is quite possible that we may win in the fight for production. We have not yet won; we have a lot of leeway to make up. But production in this country can be increased, and it needs to be increased. I should be the last person to minimise the importance of increasing production, but I am very concerned when I hear reports from overseas of other countries who are concentrating much more than we in this country, not only on production but also on making the best use of what is produced. The great value of this Report is that it brings home the importance in the national make-up not only of the producers but also of the consumers. We are fighting, besides a producer's battle, a consumer's battle. If we win the producer's battle and lose that of the consumer, we shall lose the war for markets in the future.
§ I know that we are world renowned for "muddling through." There was a time when we were able to "muddle through" most of our difficulties and problems, but I am quite satisfied that that era has ended. There will be no "muddling through" henceforth. Not only have we got to see to our production; we have got to see that fuel and power and other commodities are used with the utmost economy, and that the best use is made of our produce, otherwise we shall not win through. I do not suggest that the implementation of all these recommendations, were that possible, would see us through. But I am quite satisfied that there are in this Report recommendations which we dare not ignore, and I am satisfied that their implementation, so far as is possible and practicable, will help us to deal with our present-day problems. I beg to move for Papers.
§ 3.6 p.m.
My Lords, I am grateful to the table Lord, Lord Macdonald, for having initiated a debate on this Report. At the same time I owe him an apology for not having been here in time to hear the beginning of his speech. I was unavoidably detained. I do not quite know what is the proper attitude to be taken up by a member of your Lordships' House who has been Chairman of a Committee of this kind. Clearly, it would be wrong for me to attempt to defend in detail all the proposals that we have made. However, I think it right to try to explain in general 391 what was at the back of our minds when we were working through and writing the Report. It may be of some help to try to explain the way in which we approached these problems. Very often, when you are involved in a rather complicated subject such as this, you may be quite clear how you feel about a thing, but by the time your Report has been written, re-written and edited several times, as those of your Lordships who have had to do with Committees of this kind will know, it is sometimes rather difficult to make quite sure that it comes out as you meant it to come out. That is not intended to be a reflection upon the staff who worked for the Committee. Their work was at all times wholly admirable. But, working with a complicated subject of this kind, we did find a good deal of difficulty in keeping at the forefront of our minds the whole time the principles at which we were trying to arrive.
There is only one quotation that I wish to make from this Report, its importance being that it explains the point of view which we took when we began to discuss this subject. After a little time, the first thing we said was that we must make up our minds as to what we were being asked to advise on—namely, to make the best use of the fuel and power resources of the country. Therefore we thought that we would attempt to say what was our idea of doing that, and we put that down at the very beginning. We say:We have asumed that the general aims of a national policy to promote the best use of fuel and power should be:Those were the principles we had in mind, and those were the ideas which as we went through the whole of this subject, we tried to translate into a practical view of the different parts of the problem. I think at once we found ourselves at variance with many of those who have advocated a fuel and power policy as a major part of Government planning policy, because so many of them, so far 392 as I can see, had in mind a policy based on fuel efficiency alone. Our view, after thinking the matter over as deeply as we could, is that the correct policy would be based not only on thermal fuel efficiency, but on the total costs involved in each operation. That is the basis of the calculations which we have tried to make throughout. That is why we were careful, in stating our objectives, to include the words which I have just quoted.
- (1) To meet in full the demands of the community for the different fuel and power services, when those services are sold at prices which closely correspond to the relevant costs of production and distribution
- (2) To provide for export fuels on such a scale and of such types as can be sold abroad with most gain for the country.
- (3) To promote the maximum economic efficiency in each use of each fuel.
- (4) To encourage the use for particular services of the fuel which gives the best returns on the resources consumed."
There is, of course, quite a difference between regarding the best use of fuel and power as just an attempt to use fuel in conformity with the highest principles of thermal efficiency, in the scientific sense, and on the other hand as an attempt to use fuel together with the resources of investment labour, steel and other materials which go to make up the supply of fuel services. In many cases the choice as between one fuel and another, or between one method of using one fuel and another, is by no means as simple as seems to be thought by some people who confine their views to fuel efficiency alone. My Committee, of course, advocate combining the maximum efficiency in the use of fuel with economy; that is to say, it would not be worth spending more than so many pounds to save so many tons of coal a year. That seems to us a very important point. Similarly, we tried to argue, from what facts we could get, what would be the cost of increased supplies of coal. It is not an easy argument, because there are other conditions which obscure it. Supposing it were said that it would cost £15 to save a ton of coal a year by some industrial process, whereas it needed the expenditure of only £10 to produce a ton of coal a year, I do not think many would doubt what the decision would be. But we were not able to carry that argument very far in the way of actual figures, because we did not find many cases as clear as that. There was no doubt in our minds that there are quite a number of cases where one can show a substantial saving of fuel, although there may be some doubt whether the investment would be worth while.
Another point of policy with which we were very much concerned was a proposal, widely made by a range of people from different parts of the life of this country, that there should be an overriding fuel and power administration combining together the control of the fuel and 393 power industries which are at present nationalised—that is to say, some overriding authority in command, more or less directly, of the Coal Board, the Electricity Board and the Gas Council, which would co-ordinate their activities and, presumably, be subject to the control of the Ministry of Fuel. We gave a great deal of thought to this suggestion, and we had a great many proposals made to us with that object. We tried to think out what, in fact, would be the purpose and the result of such an arrangement. The object, I take it, would be to secure co-ordination. What co-ordination is in fact required? What is it you want to co-ordinate? Is it that these different industries are hampering each other's development? Is it that they are not carrying out their own development fast enough, because they are not being given enough opportunities through competition? Or is it that there may be some new principle of working which would be to the public benefit and would promote economy? We were not able to foresee any result from such a combined authority which would improve matters as they at present stand, believing as we do, after our study of the problem, that the right answer to the question of the choice of fuel lies with the consumer—again provided, of course, that he pays the actual cost of what he is getting.
We were faced with the question of competition between the supplying industries. Competition, as we know, may mean encouraging one or discouraging another, so we devoted ourselves to ascertaining which could best do whatever service was under consideration. I think we are right in saying that competition between these industries should be encouraged, but within a framework of certain rules. The only rule we suggest is that actual prices should be so arranged that the individual consumer should, in fact, pay for what he gets. I apologise to your Lordships for labouring this point, but it seems to us that it is a matter of fundamental importance that the individual consumer should pay for what he gets according to the conditions as to time and costs prevailing at the time he gets it. That being so, and competition being in our view the right spur to efficiency in these industries, there seems to us no logical reason for having two or three of them under the leadership of 394 any one group of people or one individual.
We have made recommendations to which the noble Lord, Lord Macdonald of Gwaenysgor has referred. One recommendation was for the Joint Planning Board. Perhaps, I may say a little to explain that. We had no intention at all that that Joint Planning Board should in any way interfere with the normal development: of the fuel and power industries as they at present are. We envisaged that there might be quite a number of problems—they are referred to in the Report—in respect of which actual joint production proposals would in future be found advantageous. There is quite a list of them. We envisaged a possible combined operation of gas and electricity (this is dealt with on page 54 of the Report) and possible new methods of transporting coal, also possible new arrangements for carbonisation of coal and making use of coal at the colliery. These are technical matters which may in future be developed. It was simply for that rather restricted purpose of development in these industries that we thought that this Joint Planning body would be of use. It would be of use, we felt, for giving advice in solving problems which arise. We had some evidence of proposals of that kind relating to electricity generation at collieries from low-grade fuel. We are informed that there are proposals which, as will be seen, involve questions of the working together for a particular project of the Electricity Board and the Coal Board. We heard how arrangements were made for the operation of these things. I think we were told of two such plants which were proposed. One was to be run by the Coal Board and the other by the Electricity Board. From what we heard, a rather closely integrated advisory body for that kind of operation only would be of advantage.
Another proposal we made, which involves some kind of co-ordinating body, was for what we call a Tariffs Advisory Committee. This was to be purely advisory to the Minister. We found in our researches what looked like conditions of tariffs, particularly in the electricity supply side of the fuel industry, which did not seem to reflect the real cost to the consumer. Remembering that the basic principle was that the choice should be made by the consumer, knowing what 395 he would have to pay and what he was paying for, we did not feel entirely satisfied that that condition always operates to-day. But we could not set ourselves up as a committee of investigation of the tariffs of the electricity and gas industries, because it would have taken us probably another two or three years and because it is a specialised and complicated subject which we did not think we were expected to undertake. I certainly did not feel I was capable of taking on a matter like that.
We thought there was a need for some independent body to look at all these tariffs and try to disentangle the application of them and be sure they were moving in the right direction. It has been said very widely that electricity tariffs are promotional, encouraging the sale of more electricty—and, of course, the use of more electricity makes it cheaper. That is probably all to the good. But it seemed to us that that policy tended to encourage the sale of electricity at a time when electricity cost more than the price paid for it—I am referring to peak-hour production of electricity, when it is expensive, because it requires a great deal more generating capacity and, at the present time, unfortunately, it involves the use of older plants which run at a much lower efficiency. So we thought it was important to try and find some means of applying tariffs which would relate the price paid for electricity to the conditions under which it was produced at the time it was used. I should not like it to be said that we were in principle against any tariff that was promotional. The history of the electricity industry shows that these promotional tariffs have not only increased sales very largely but have also improved the load factor considerably. But the question is not so simple as that. We thought that an expert body to advise the Minister on whether or not the tariffs used by the various sides of the industry were on a sound basis would be helpful to him.
Having said that about these two bodies—the Tariffs Advisory Committee and the Joint Production Planning Board—we felt that that left the Minister in a position to give such directions as were required to these industries for co-ordinating and working out a fuel policy for the country. I feel sure that the right answer is that the Minister, whoever he may be, as 396 the person who has been given by Parliament the responsibility of overlooking the fuel and power supplies and as the person who has specific powers and responsibilities under the nationalisation Acts, is the person by whom this co-ordination and control must be conducted. He is responsible to Parliament and if he has not enough power under the nationalisation Acts to pursue any policy he thinks may be right or has been approved by the Government or has been proposed elsewhere and adopted as the national policy, surely Parliament are in a position to give him such powers. Under the nationalisation Acts he has power to give directions in the national interest, and it would seem that he would be quite within his rights to say that it is in the national interest that such a type of tariff, or even such a particular tariff, should be adopted by the industry.
I feel that the interposition of any other authority between the Minister and the industries could only make things more difficult. It might tend to remove the sense of responsibility from those in charge of the nationalised industries and lengthen the chain of responsibility between the Minister of Fuel and Power and the people who are really doing the job. It seemed to us that the proper arrangement is that the heads of these industries, charged with the responsibility of running them, should be left to run them and should be relied upon to discuss their problems together and keep in touch with the Minister and, as we feel they probably do now, carry out the general policy by mutual discussion and understanding of the problem, leaving the Minister behind it all with power to put through the changes in policy which may seem to be in the national interest.
I have spoken rather lengthily on that subject, but it seems important, because there has been so much talk about it. There has been a general demand for a fuel and power policy and, therefore, we had to examine that question as carefully as we could. As to the other side of our fuel and power policy, the use of different fuels for different purposes, I have already outlined our attitude to that as being in favour of the consumers' choice, but I think I should say a little more about what that attitude is based on. Figures are quoted in the pages of the Report and in the appendices showing the information we were able to collect about 397 the cost of heating, particularly for domestic use. The impressive thing about these figures is that, within certain limits there is little to choose between the relative costs of using different fuels, except that at peak hours electricity costs more. That really formed our attitude to consumers's choice in the domestic sphere, together with the fact that we believed that the production of these different fuels is satisfying the need of the public, whether it is for gas, electricity, coal or coke.
It was surprising to find what a close relationship there was between the different costs of these different fuels. Of course, we were able to take into account only a fairly narrow range of services, but I think that if we had investigated the others, we should probably have found the same results. It has been said that it is uneconomical to use electricity for water heating. Our figures show that it may use rather more than gas or coal, but in winter or at off peak hours it uses less. There are so many examples of that in the use of different fuels under different conditions that we found a complete change in the relative costs of one to the others. One thing we found, however—although it has been known for a long time—was that the ordinary domestic coal range is unnecessarily extravagant, and we have recommended that greater efforts should be made to find an improved model. It has been thought that we recommended that people should have in their houses stoves, grates or open fires burning coke, but I should like to make it clear that that is not what we said. Some years ago the Simon Committee, which went into this question in great detail, recommended the wider use of coke and manufactured fuel for greater fuel efficiency and a less smoky atmosphere. We do not disagree with that at all.
Here I might say that, as a member of that Committee some years ago, I did make an observation that I did not think there was enough coke or manufactured fuel to-day of any kind to allow this policy to he widely carried out, and that people wanted open fires in their houses. I have not changed my view since, and indeed the rest of the Committee were of the same opinion. We did, in fact, say that, although we should like to see more coke, semi-coke or low-temperature coke, the practical problem was to design something 398 which would burn coal and give the person occupying the house the feeling of an open fire, with the benefit of radiant heat. We had a number of reports from people who investigated these matters technically, and we were advised (I forget now from where the advice came) that there was an advantage in having radiant heat rather than convected heat, because it had been observed that in a room with an open fire, with radiant heat, people felt more comfortable and happier at a lower temperature than they did if the heat was convected. That was a surprise to us: we had always felt that an open fire gave such a comfortable feeling, but here was sonic evidence to show that there was something in that view. There again, we felt strongly, not only because people wanted an open fire but also because they got the comfort with less heat, that it was right that they should have it.
We did see and hear of certain examples of improved grates and open fires burning coal (we quoted the figures in Tables IV and V of the Report) which gave considerably increased results over the ordinary grate which is installed in most houses built to-day. I felt strongly—and I think most of my colleagues did—that these devices were so near being marketable that it was worth a great deal of effort to try to push them along and get them on the market. We made several recommendations for doing this, although I do not want to go into them in detail. However, I want to be quite clear that it is the ordinary open fire, with coal in it, that we thought was the right thing; and that from the evidence we were given by those responsible for research on this matter in various quarters, we felt that improvements had been made, and that more could be made. That was something which we said we hoped the Government and others would take up and develop. I do not want to go into detail about the recommendations we made as to how that should be done, because that would take too long.
I should, perhaps, say a few words about the specifically industrial use of heat and power. We did not feel that in this field there was so much opportunity for substituting one fuel for another, because the fuel used is often so much more clearly marked out by the process involved, or by the cost, if it is a question 399 of heating a factory without any use of process heat. We were told on all sides—and we believed it—that there was a great deal of waste in industry, through lack of experience, lack of knowledge and lack of suitable plant. We were also told from many sources that quite considerable improvements could be made over a fairly wide area by better handling and operation of the existing plant, by better training of the people operating and supervising it, and by better care and maintenance.
A further wide range of economies could also be made by capital investment, which involves new and improved plant. That, to our mind, was a great deal more difficult because, although you can show quite startling improvements in fuel economy by a large number of different types of plant—for instance, the pass-out turbine system, which is widely talked about and is a good system for certain types of factory with certain processes which have the required balance between the heat used in the factory and the current used for power. Even there the capital investment, on present prices, is very high, and it takes a finely adjusted scheme to show that a return on the investments would be worth while. We did feel that the Government Fuel Efficiency Service, referred to by the noble Lord who has just spoken, had done an excellent job. We were impressed by all the reports of what they had done. I, myself, and one or two other members of the Committee, had already been in touch with the regional fuel committees before-hand, and with the knowledge we then gained, and from the reports we had, we were greatly impressed with what they had been able to achieve. We were, however, perfectly satisfied that, so far, they had only, as it were, scratched the surface of the problem, and that there was a great deal more to do.
There has been difficulty in recruiting staff for this service, and it might be thought that in recommending an extension of the service and, indeed, the addition of another one, we were ignoring that difficulty. But this is, after all, a continuous process which will go on for many years. It will be just as worth while to save coal by the careful and efficient operation of plant in four or five 400 years' time as it is now. There is no doubt that people can be trained for this service. We did feel that this independent service, operated by industry for its own benefit, would be particularly adaptable to certain branches of industry and would probably have a fairly wide field in which to operate. We were careful to say that the present fuel efficiency services run by the Government should not be disbanded. We feel that there is a wide field for this work in certain types of industry, and also in the Government service itself. A certain amount of information was given to us about fuel used and about methods of fuel control employed by the Government, by local authorities and by various branches of the service. We were by no means sure at the end that efficiency was regarded as of sufficient importance. We say that if the Government want to encourage a fuel efficiency policy, and to get people fuel-minded, they should set an example, as also should local authorities.
I have gone on too long, but I want to say one further thing. It is true, as the noble Lord, Lord Macdonald, said, that most of the things we talked about and recommended have been said before. We tried hard to see whether there was a new way of looking at these things, either taking them separately or in various blocks. We tried to see whether there was any sense in an overriding plan which would change the use or the manufacture or processing of fuels in any way. However, we could not see anything in which a radical improvement could suddenly be made. We believe that a great many of these things that we have mentioned, and which have been said before, might be tried, and that quite a lot might be done by a policy from the Government of endeavouring to encourage this work wherever there is opportunity to do so. After all, it is a good policy to do those things which seem likely to achieve the results you set out to achieve. What you set out to do in this case, we thought, was to supply the heat, power and light, and different kinds of fuel, to people as they wanted it. If you can find means of improving that, and making it more effective and efficient, and at the same time show people how to save money by using less coal, we feel that these measures, taken together as a policy, are worthy of consideration.
§ 3.40 p.m.
My Lords, I am sure we are all very much indebted to the noble Viscount, Lord Ridley, and his Committee who worked with him, and we are also indebted for the explanation the noble Lord has given to-day. The Committee's Report has, in addition to giving very valuable new data on fuel and power, and so on, I think exploded perhaps one myth, and that is the myth that nationalisation itself will bring co-ordination, because it does not do so at all. No doubt the Socialist Government which set up the Ridley Committee in 1951 hoped that this Committee would produce the, answers, but I suggest it has not produced the answers in quite the way they would have wished. I may be wrong in this matter but I think it is likely that a section of the Party opposite hoped that the Ridley Report would favour a scheme by which the user would be forced to use the type of fuel that was thought best for him, not perhaps in this case by the gentlemen of Whitehall, but by the boards of the nationalised industries.
I was not at all surprised to see that the Report came out clearly in favour of users having choice of fuel. This does not, of course, rule out inducements being offered to favour the efficient consumption of fuel. What does the Ridley Report say? It says (in these words):The consumer's choice is the right guide for the pattern of use, provided that all the prices and tariffs for fuel and power should correspond closely to the relevant costs of the service provided.There is, of course, nothing new in this pronouncement, as I think the noble Viscount, Lord Ridley, has said. Those of your Lordships who have read the Simon Report of 1946 will remember these words:The prices charged for the various fuels should he related as closely as possible to their cost of production and distribution.I think I am right in saying that in the past the prices of coal have been based mainly on pit-head quotations, but I understand that the new price structure is to be based and is being based on the price of the coal delivered in the area of consumption, whereas your Lordships are aware that the Ridley Committee recommend that the delivered prices should fully reflect the transport costs involved in delivering these coals to a particular area. This, of course, adds 402 strength to the Simon Committee's recommendations which were very similar. I hope Her Majesty's Government will give this recommendation full consideration. Otherwise I feel there would be no incentive to reduce delivery costs, which are one of the major elements in the price of coal.
The question of economy in fuel is not a new one and it has been before the country for very many years. In fact if one looks at the Report of the Royal Commission of 1901 one finds that the early paragraphs are very similar to the ones we are talking about to-day. I think many of your Lordships will agree that the Report's recommendation that the fuel efficiency service should be extended is a good one, and ill also agree that these services should be controlled and financed by industry itself. But I certainly hope that the Ministry of Fuel and Power Inspection Department and Fuel Efficiency Department will not be shut down, because I am certain that they ought to have a nucleus of experts to keep public bodies, and so on, up to the mark as well. One of the recommendations of the Committee is that there should be a drastic remodelling of electricity tariffs to differentiate between charges at peak hours, when supply is expensive, and at other times when it is cheap. I think that this is an excellent idea, but that it is going to be very difficult of application, though perhaps the difficulty is not insurmountable. There, again, it is a matter that should be worked out by the electricity industry itself.
I suggest that there is one important matter that does not appear to be covered by the Ridley Report, or at least not fully covered although it is referred to, and that is the price policy of the National Coal Board. The price policy of the National Coil Board must, of course, affect the price structure of the secondary industries, gas and electricity, for the Coal Board controls their raw materials. I think it is essential that this matter should be carefully investigated. It may even be a good thing that we should have an outside body to examine and report to the Minister on the Coal Board's price structure. I suppose to a certain extent the consultative committee can deal with this matter but I do feel that that committee is nothing like a strong enough body to deal with the matter properly. Perhaps the noble Lord 403 who is to reply for the Government to-day will be able to tell us something about the coal price structure. I was very glad to see that the idea of placing a levy of £1 per ton on the price of coal in order to induce economy did not receive unanimous approval in the Report. To increase the price to consumers at the present time by £200 million would surely be quite unjustifiable and would have tremendous repercussions on trade and industry generally, and, of course, on the cost of living.
With the winter coming on us—in fact it is upon us now—most of us are interested in our own fire grates. In spite of what Lord Ridley has said (and I have read his Report very carefully) I was somewhat astonished to gather from the Report that the open fire grate as we know it is in many cases not so inefficient as might be supposed. It appears that, with the addition of a simple device for insertion in chimneys so as to cut down the excessive loss of heat, considerable economy can be obtained. I hope Her Majesty's Government will assist manufacturers to place this device more freely on the market. The Report goes on to recommend the production of an attractive-looking utility model fire which would have a very high room efficiency, being used with coal and yet at the same time retaining the open tire characteristics. I understand that such a utility model already exists, and also that sufficient capacity is available for its production in large numbers provided that the manufacturers are prepared to stop almost completely the production of the articles they are at present making. This problem, of course, is one of creating a demand for this type of fire and I think that may be done. One way of doing it would be to remove the present restrictions on bank loans, so that merchants could give credit facilities for the sales of such stoves. No doubt there are many other incentives that may be favoured by Her Majesty's Government. When it is remembered that of our total fuel consumption, including oil, of 248 million tons per annum, some 34½ million tons are consumed by domestic appliances in the form of coal, it is obvious how important a really efficient house fire grate does become. I think it is an excellent idea that stoves which achieve the desired degree of efficiency should be marked 404 accordingly, so that buyers will know what they are getting if they go into the market for this stove.
In conclusion I would strongly support the Committee's recommendation that the use of high grade coal for the railways should be diminished as far as possible by the use of diesel engines. The railways, as many of your Lordships will be aware, have started to build and have put into service diesel rail coaches, and I believe a large number of diesel engines are now used for shunting purposes. One day we may have the gas turbine locomotive that uses pulverised coal, and I hope this experiment will be fostered as much as possible by Her Majesty's Government. Although in some quarters the Ridley Report has been received in, I would say, a somewhat lukewarm fashion, especially by the technical Press, in my humble opinion it is an excellent Report, and if it has the effect of bringing the costs of fuel and power, and especially a price structure for coal, before the public, it will have accomplished a very important service.
§ 3.49 p.m.
§ THE SECRETARY OF STATE FOR THE CO-ORDINATION OF TRANSPORT, FUEL AND POWER (LORD LEATHERS)
My Lords, first of all I should like to associate myself with the thanks extended to the noble Lord who introduced this Motion: I think he has done a good service. I particularly appreciated the helpful and in every way delightful manner in which he presented the case. I would also extend thanks to the noble Viscount, Lord Ridley, and those who were associated with him in this piece of extremely hard work. It was indeed a heavy labour, extending over twelve months. There were all angles of thought to apply and every approach that you can imagine to see to. After all those labours they produced a Report that is full of interest.
Those of your Lordships who have examined this Report will have seen that a cursory glance at it produces nothing at all for you. It needs a very close study, and is even then a very difficult document with which to grapple. With its forty recommendations, covering many aspects of policy and many uses of fuel and power, it was not to be expected that immediate decisions could be taken on all the recommendations which were made. 405 Many of the Committee's recommendations require decision by the Government, but others fall in the first instance to the nationalised industries; and some invite initiative from industry and other organisations. Many of them require consultation with a wide range of individuals and official bodies. I make no apology, therefore, for stating quite frankly that we have reached no more than a half-way house in our consideration of this Report. On some of the recommendations we have reached decisions, and I will come to them directly. On others we have views but wish to hear expressions of opinion from other bodies before taking our final decisions.
As your Lordships will remember, a helpful debate was held in another place on October 28, and we learned a great deal from that. Then again, the Minister of Fuel and Power has asked the nationalised industries, for which he is responsible, to let him have their views on the Report; and both sides of industry have been invited to give their opinions, too. Now we have this debate in your Lordships' House, and we welcome this opportunity to hear your Lordships' views. I have heard some already, and I have made voluminous notes. I shall not be able to answer all the points raised to-day, and some will be left to my noble friend Lord Selkirk, who will close this debate. But if, by any chance, I find that, between us, we leave out any points, I will examine them closely and communicate with Lord Macdonald and others on them. At this point I would only add one word by way of explanation and apology. As I have said, a debate was held in another place on October 28, and I am sure that your Lordships will understand if I cover some of the same ground as my right honourable friend did on that occasion.
It may be useful at the outset to remind your Lordships of the conditions with which the country was faced in the early months of 1951, when the Federation of British Industries and the Trades Union Congress jointly urged the late Government to set up an independent Committee to go into the subject. Those conditions were, first, a shortage of coal, which presented a serious threat to industrial production and to employment, and, secondly, a deficiency of electricity-generating capacity which had in the previous 406 winter caused frequent interruptions in industrial production, not to mention a considerable degree of inconvenience and hardship to householders and others. Happily, although those days are still only recent history, the situation with which we are now faced is a brighter one. We have begun this winter with higher stocks of coal in the country than at any time since the war, and the British Electricity Authority have been able to make such progress with the installation of new generating equipment that the danger of a serious interruption of power supplies to industry during winter peak hours is much more remote than it was.
But it would, of course, be wrong to think that the problem of a fuel and power shortage has now disappeared. A severe winter might well put a very serious strain on our coal supplies. In a sharp spell of winter weather, not only does the consumption and demand for coal naturally go up but there is always a risk that the flow of coal wagons to and from the pits will be held up, with a consequent loss of coal production. I have seen so much of that in my time that I speak feelingly about it. We sometimes think that we have reached a stage of the winter when we are nearing safety, and along comes a very severe spell. The interference of such weather is often more than I can describe, and all our past hopes are shattered on the last lap of winter. Therefore, one always speaks a little carefully at this stage of the winter. And it is not just coal which will be short. If the winter turns really cold we may be faced with serious interruptions in industry as a result of a shortage of electric power during the peak hours. Quite apart from the hazards of our unpredictable climate, there is, of course, an overwhelming case for making the very best use we can of the country's fuel and power resources. These will remain costly to provide, even when they are again in easier supply, so that we can ill afford to squander them. For these reasons, Her Majesty's Government consider that the Ridley Committee's Report, with its careful review of measures to improve our use of fuel and power, is of great value in both the short and the long term.
I think the easiest way to consider this Report, which, as I have said, for all its clarity of expression is by no means easy 407 reading, is to look separately at the four parts into which the subject matter falls. The first is a discussion of fuel supply prospects in future years. The Committee have attempted to make a forecast of the demand for fuel in ten years' time. Their forecast—and they very properly stressed it as extremely tentative—is that inland consumption in ten years' time may be about 20 million tons a year higher than the forecast which the National Coal Board have been working on in their Plan for Coal. That is to say, whereas the National Coal Board have been working on an estimated inland demand of between 205 and 215 million tons a year, the Ridley Committee think that it may well be more like 230 million tons. The Committee and the National Coal Board are at one in estimating that, over and above inland needs, the demand for bunkers and exports will be something of the order of 30 million tons a year. Forecasting the demand for coal in ten years' time must, in a changing world, involve a large element of guesswork. As I have said, the Ridley Committee tentatively put the inland demand quite a bit higher than the National Coal Board. On the other hand, it is still much lower than some other estimates. For example, it is 30 million tons less than an estimate recently made by the Federation of British Industries.
It would be inappropriate for me, in such conditions, to try to endorse one of these sets of estimates on behalf of Her Majesty's Government as against the others. All I can do is to say that we agree that the level of inland demand for coal suggested by the Committee may be realised, and that our planning in various directions ought to take that eventuality into account. I do not think that we need regard this as a particularly alarming prospect. The plan of the National Coal Board has from the outset been an elastic one, and I think that it is reasonable to expect that the Board will be able to produce the extra coal required. The Board will, of course, make every effort to meet demands and are already considering, division by division, how the plan should be modified if an extra 20 million tons were required in ten years' time.
As I have said, nothing in the prospect that we can see ahead, and certainly 408 nothing in the Report which we are considering this afternoon, justifies us in assuming that there is going to be plenty of coal in the years ahead and that we need not use it carefully. Quite apart from the question of the level of demand, we have to remember that although this island contains a large quantity of coal, we cannot expect to go on extracting it at the rate of hundreds of millions of tons a year for ever. We hope that by the time our coal resources are exhausted other sources of power will be available. But this is too serious a matter to allow us to take any risks that can be avoided, and I am sure that we must get into the way of looking on coal as one of our most valuable resources which is too precious to be wasted. It is appropriate, therefore, that a second section of the Ridley Committee's Report should consist of a valuable discussion of the domestic and industrial use of fuel and power with a series of proposals to improve it.
On the domestic side, the Committee have stressed the relatively low efficiency of the old-fashioned open grate, which is still in use in the vast majority of our homes. They recognise the greater efficiency of many of the improved appliances at present on the market. I am glad to say that there has recently been a very encouraging increase in the production of improved grates. Indeed, I understand that it is at the level of about 1,750,000 a year. The Committee considered, however, that there is a need for appliances which will combine even higher efficiencies with the characteristics of the open fire and which will be both cheap and easy to install. And they further recommend that, in common with the improved appliances already available, the new appliances should also be capable of burning satisfactorily a wide range of fuels.
As most of your Lordships are probably aware, one of the results of the increase of mechanisation in the mines is that we get less of the larger coal which we have been accustomed to burn in open grates in our homes for so many years, and shall have to use a larger proportion of the smaller sizes. I think I mentioned in this House on a previous occasion that mechanisation of the collieries is yielding a very much greater percentage of small coal and, consequently, much less of the larger coal. 409 That is a serious problem for the future, and is an additional reason for installing the approved appliances. Discussions are already taking place between the Ministry of Fuel and Power and the manufacturers about higher standards of performance which might be adopted for solid fuel heating appliances.
Perhaps I might say one word here about the question of smokeless fuel which was put to me by the noble Lord, Lord Macdonald. Smokeless fuels, in the full sense, or low volatile coals, which are relatively smokeless, are in relatively short supply throughout the country. We have a very much larger output of bituminous coals of higher volatility than we have of the less volatile coal of the anthracite types, which are in demand for special purposes in many directions. I think it would be unwise, as I indicated to the noble Lord when he first mentioned this matter to me this morning, to send this scarce smokeless fuel over long distances to particular areas, such as that to which he referred, when they produce that very good house coal almost on their own doorstep. Indeed, smokeless fuel would be much more expensive, if one had to pay the rail charge on the journey to the point mentioned, and it would be out of all reason from the point of view of cost. It is not, therefore, an easy problem. We are not in the same position as the United States, where the output of smokeless coal is so great that they have more than they need for their own use and can send it to other countries. As I say, ours is in short supply.
We are considering the Committee's suggestion that appliances satisfying the new standard should carry a sort of hall-mark to show that they are efficient. I think something on these lines might well be helpful, and I hope that satisfactory arrangements can be worked out. I am more doubtful whether it would be a good idea to insist that the appliances should show the figure for efficiency attained under test conditions, since this would not necessarily enable the best choice to be made of suitable appliances in other conditions—conditions that might he different from those in which the test was made.
The noble Lord, Lord Macdonald, raised a point concerning electricity in North Wales, and I think I had better refer to it now. I have not seen the article in the Press in which the electricity 410 people are said to have indicated that the less electricity people consume the higher will be the price they have to pay. I have tried to get hold of it but could not trace it. I should like to get hold of this article before commenting on it. I think there is something to be explained other than what appears on the surface of this observation. But if electricity were in unlimited supply, and if people were tending to consume less, the overheads of the board would be the same and that might cause difficulty. I do not think we are confronted, however, with anything of that kind, because we have a very important programme of expansion of electricity all over the country; and if there were a much lower volume of consumption we might find ourselves with a higher programme than was needed. Frankly, therefore, I do not see the point arising. But I will follow the matter up and will advise the noble Lord when I have something more to say.
On the side of the industrial use of fuel the Committee also make a number of recommendations. Perhaps the most important are those in which it is suggested that the arrangements for providing industry with advice on fuel efficiency should be improved and strengthened. The Government warmly support the view that industry should take greater responsibility for improving its fuel efficiency and will do their utmost to foster a scheme on the lines proposed by the Committee. The National Coal Board have already stated that they will be prepared to make a contribution to the cost of the proposed service. Thus we hope that it will be possible for industry to devise and operate its own fuel advisory service. It will also be necessary for the Ministry of Fuel and Power to retain a fuel efficiency organisation, as the Committee suggest. But it will obviously be essential to avoid any wasteful duplication of effort and to keep expenditure from public funds down to a reasonable level. At any rate, I can say without hesitation that the Government as a whole recognise the responsibility which rests on them to set an example in promoting and practicing fuel efficiency. We will certainly consider, in the light of the Committee's comments, how the detailed arrangements in the various Government Departments can be improved. I am sure that other public authorities, such as local authorities, will 411 also recognise that a similar responsibility lies on them.
One big undertaking which the Report specially mentions, since it is a very large consumer of fuel, is the Railway Executive. And, of course, in my capacity as Co-ordinating Minister, this aspect of the matter interests me specially. The railways are at present using nearly 14 million tons of coal each year, most of it high-quality large coal, which is in great demand for export and other purposes. I am afraid there is no doubt that, as the Report points out, much of this coal is wasted, in the sense that a steam locomotive has a relatively low thermal efficiency—usually a good deal less than 10 per cent. No one can deny that there is a strong case for replacing at least some of the railway steam engines by other forms of motive power—either electric or diesel engine or possibly, in the future, gas turbines. But, of course, a change-over of this sort on any substantial scale involves a huge capital investment, as the Committee recognise. And even if it were agreed to be desirable, it would for that reason be quite unrealistic to picture any quick results. I have always in my mind as well that any big development of diesel engines for locomotives would involve importing fuel from abroad, as distinct from using that which we have in this country. In a time of emergency it would be a valuable thing to have our own fuel supply, rather than to depend on supplies from abroad, for urgent home use such as railways.
The British Transport Commission are already giving the relevant passages of this Report their very close examination. And, as evidence that action, as well as thought, is taking place. I would remind your Lordships of the announcement in newspapers last week which some of your Lordships may have seen—of a programme of introducing diesel trains on British railways at a cost of some £500,000. They have already a large number of diesel engines for shunting purposes and now they are extending their use to other purposes, particularly on branch lines where only one, two or three carriages are needed. The diesel engine is able most economically to cater for that work. These trains will operate at first on passenger services in the West Riding of Yorkshire; and other areas, including 412 Scotland, are being surveyed for development later. I may add that in considering any plans for capital expenditure on the railways, the Government will, for their part, give full weight to any economy in the use of fuel that they can offer. In France and other places small coal is freely used in locomotives, whereas our locomotives require large fuel. Something of that sort may have to be considered, even if we continue to use solid fuel as distinct from oil. Before I leave the subject of transport, I should draw attention to one recommendation of the Report which we implemented just after the Report was published. As the Ridley Committee recommended and as your Lordships know, premium grades of petrol will be available from February 1 next.
I will not detain your Lordships by discussing separately each of the many other recommendations bearing on fuel utilization. There was a suggestion that the status of stokers should be raised; that more attention should be paid to training in fuel technology; that industrial shift-working should be extended; that steps should be taken to ensure adequate supplies of steel for the manufacture of fuel efficiency equipment; and that encouragement should be given to improved heat insulation of buildings, houses, factories and other premises. We certainly accept the principle of all these recommendations. In fact, we have done more than that; we are at work actively in connection with some of them. Their fulfilment requires a great deal of detailed work, and on each item discussions are going on between the Government Departments concerned, and in several cases with other organisations. One recommendation in the Report which I should frankly say we do not feel prepared to accept is that heating methods and installations in new industrial and commercial buildings should be subject to planning control. We do not think that it would be right to add yet another direct control over industry and commerce for this purpose.
The third and main group of recommendations in this Report concerns fuel tariffs. In the interests of efficiency and in order to give the consumer what he wants, the Committee strongly advocate that freedom of choice should be maintained between the alternative fuels. But 413 they qualify this by insisting that the prices for the alternatives should be right —that is, closely related to the corresponding costs. Perhaps I may be forgiven for making what is an obvious point if I remind your Lordships that when we discuss the prices charged for fuel and power we are really dealing with two rather different things. The first is the general level of prices for the commodity in question; the second is the structure of the tariffs within that general level—that is to say, the different types of charge collected from different types of consumer.
As regards the former, the general level of prices, I have no doubt that many of your Lordships will have read with interest the closely argued chapter in the Report on the price of coal. The Committee found it a most difficult question, as the even division of their views testifies. I shall be most interested to hear what any of your Lordships have to say on this subject this afternoon. But I think it may be relevant to remind your Lordships that each of the Statutes governing the three nationalised fuel and power industries lays it down that the industry must be so run that its revenues are sufficient to meet its outgoings, taking one year with another. This ensures that, in the long run at least, the level of charges in each industry is maintained in proper relation with the level of costs, although one could not deny that there may still be room for considerable distortions within the framework— that is to say, undercharges in certain sectors may be paid for by excessive charges in others.
Turning to the tariff structure within these industries, the Committee made a number of more or less detailed recommendations to which I will refer. In considering electricity, they recommended that tariffs should discriminate in charges between use at the hours of peak demand and at other times and that extensive practical trials should be made of the various methods of measuring or controlling electricity consumption at peak hours. These are recommendations which we can readily accept in principle but which raise a number of technical and practical problems. Already the charges made by electricity boards for industry and large commercial consumers include in some cases provision for lower charges during night hours. One board has gone further than this and is offering specially 414 low night rates to domestic consumers for electrical apparatus controlled by a time switch. But, as the Committee fully recognised, there would be considerable difficulties about introducing this practice on a wide-spread scale, particularly for domestic consumers. When one comes to consider the demands upon the economy in the shape of steel, manufacturing capacity and labour which would be involved in any wholesale changeover of meters or installation of time switches, one can form some idea of the magnitude of this problem. Nevertheless, officials of the electricity boards and of the Ministry of Fuel and Power have for the past twelve months been examining the methods of controlling peak hour electricity demand, and we intend to discuss these difficult matters fully with the British Electricity Authority.
A minor but valuable recommendation in this section of the Report is the suggestion that, where electricity tariffs include a maximum demand charge, that charge should be based on the maximum demand as measured each month rather than for each year. This is already the normal practice for industrial consumers but I understand that commercial consumers are usually supplied on the basis of an annual maximum demand. My right honourable friend is asking the British Electricity Authority to reconsider the commercial maximum demand tariff in the light of this very sensible recommendation.
As was to be expected, the Committee considered one subject which has given rise to a certain amount of controversy in recent years: that is the restrictive conditions embodied in a number of old contracts between electricity boards and industrial consumers who require occasional or "stand by" supplies of electricity to augment supplies from private plant. Your Lordships may remember that the electricity boards agreed last year to suspend many of these restrictive conditions on a temporary basis. I am glad to say that they recognise the force of the Committee's recommendations and are now prepared to abolish the present time limit to this waiver, and to extend it indefinitely. As a corollary the Committee also recommended that tariffs for "stand by" and similar supplies of electricity should directly reflect the costs of administration involved and of connecting and 415 supplying to the consumer. This seems to us eminently reasonable and my right honourable friend is discussing its implementation with the British Electricity Authority.
On gas tariffs the Committee clearly saw some danger that the process of unifying the price of gas over large areas might be carried too far. We accept the force of their views on this point and my right honourable friend has encouraged the gas boards to reflect, in the prices they charge, local differences in the cost of supply. At the same time, in present conditions, when it is essential in the national interest that costs of administration should be kept down to the lowest possible level, one should not overlook the saving of effort that can be obtained by the simplification and standardisation of tariffs. As in so many matters, the answer seems to lie in steering a steady middle course between two extremes.
Finally, this Report discusses at some length the relationship that should exist between the various types of fuel and power, and the means of co-ordinating the policies and activities of these great industries. Here I am sure the Committee has performed a very valuable service. Before its appointment it was often claimed that our chief need in the field of fuel and power was a national fuel policy. In its most extreme form this theory maintained that it ought to be possible for the Government, or perhaps some super-body, to devise and bring into force a simple policy by which the appropriate fuel would be determined for each purpose and each set of circumstances. The Ridley Committee considered this line of thought but rejected it. They found that the economies claimed for such positive direction were frequently exaggerated, and they attached great importance to allowing the consumer to exercise freedom of choice. This general approach is fully accepted by the Government.
However, the Committee saw the need for certain steps in the direction of greater co-ordination. First, on the side of fuel use, while they strongly advocated maintenance of competition and consumers' freedom of choice, they emphasised that prices charged to consumers should fully reflect the costs of the particular supplies. Secondly, on the side of production and distribution, though they 416 recognised that there was already a good deal of co-operation between different fuel industries, they found a strong case for still more co-operation. The Government accept these views, but are not satisfied that the particular machinery by which the Committee sought to improve co-ordination is either necessary or desirable.
To foster co-operation in production and distribution, the Committee proposed a Joint Planning Board, which would include representatives of the nationalised fuel industries and of the Ministry, with an independent chairman, and a permanent expert staff of its own. To ensure that prices closely correspond to costs, as the key to co-ordination in fuel use, the Committee proposed that an independent and expert Tariffs Advisory Committee should be established to assist the Minister in his general control over the nationalised fuel industries. The Government have given careful consideration to these proposals, and have satisfied themselves that there is insufficient case for such new organisations, partly because of the possible repercussions in the managerial responsibility of the nationalised Boards, partly because of the statutory responsibilities of the Minister, and partly because of the problems of staffing these two new bodies.
The Government believe that in practice more effective co-ordination will be achieved by frequent and regular meetings between those ultimately responsible for the policy of the national fuel industries—that is, the chairmen of the national Boards and the Minister himself. But let it not be thought that, in rejecting these particular recommendations (though not, as I say, the principles behind them), we thereby write down the value of this Report. Far from it—and let me end on this note, as I began. We are deeply grateful to Lord Ridley and his colleagues for the hard work and signal service they have rendered. Much good has already come from their labours and much more is on the way.
§ 4.25 p.m.
My Lords, I should like to add my tribute to the noble Viscount, Lord Ridley, for the excellent and most interesting Report that his Committee have produced. Although there are many directions in which one is perhaps not in entire agreement with the 417 Report, it will remain for many years a standard document on many of the problems which are exercising the fuel-consuming industry at the present time. Reading the Report one is immensely impressed by the enormous amount of coal needed in the industries of this country. One realises the responsibilities that rest upon the shoulders of the National Coal Board to supply the right quality of coal at the right price and in the right quantity. I am sure that no words of mine are needed to impress upon the Minister how essential it is that these various aspects of a most important industry should be examined.
This Report deals not with the mining of coal but with the consumption of coal, which is a matter to which I should like to direct your Lordships' attention in the few minutes which I have at my disposal. First of all, let me deal with the industries in relation to the quantities they consume. Pride of place, therefore, goes to the electrical industry, controlled by the British Electricity Authority. Here it is interesting to note that the general efficiency of the stations supplying the grid is 22 per cent. There are certain other super-stations running on full load, with an efficiency of 30 per cent., and the Report notes that there are stations in the United States running at the extremely high figure of 36 per cent. Thirty per cent. is a wonderful result to obtain, as I am sure anybody knowing anything about these complicated matters will realise. It requires very high temperatures, very high pressures and, in certain cases, very complicated steam cycles. This puts the price of these highly efficient sets considerably above that of the lower grade sets, and I have often wondered whether the time has not come when we must face up to the question which is the more important: higher efficiency or lower capital charges.
The electrical industry to-day is operating a number of stations in which the cost per kilowatt installed was £20. To-day, the cost per kilowatt installed is over £50. When these older stations drop out of use in future years a very heavy burden will be laid upon the industry in respect of overhead charges. Therefore, I suggest to Her Majesty's Government that questions of overhead charges are matters of supreme importance, not only to the electrical industry but also to the other great fuel-using industries. 418 In fact, reading the Report carefully, it will be seen that the problem is really a battle over which is the better course to adopt—to save fuel and reduce your coal bill, or to have a great deal of extra expense in the shape of capital charges. This is a question to which Her Majesty's Government should devote a great deal of attention, otherwise we shall find that in the next few years capital charges will weigh very heavily on industrial consumers in regard to the cost of supplies.
I now turn to the gas industry, which comes next to the electrical industry as a great consumer of fuel. Very little has been said to-day about the gas industry. This is a highly efficient industry in so far as a number of its big gas works are concerned, but I am afraid that that cannot be said of a number of the smaller units scattered up and down the country. Of course, gas cannot be transmitted over large distances, so we see a number of independent and not very efficient works supplying small towns. But as time goes on, some of these more inefficient works will, no doubt, close, and others will be supplied direct, possibly from big central stations at a distance away. So, in a few years' time, there may possibly be a considerable improvement in the fuel consumption of the gas industry as a whole.
It seems to me that the gas industry to-day has great possibilities before it in the way of development and research. Some of your Lordships may be aware of the experiments now going on in connection with the so-called. lurgi process, whereby coal is gassified under pressure—I think I am right in saying of 300 lb. to the square inch—in an atmosphere of oxygen. This process has great possibilities. It has the great advantage that coals can be gassified by the process which are quite incapable of being used in the standard carbonisation process of producing gas. I sincerely hope that Her Majesty's Government will do everything they can to help forward these developments in the gas industry, because in view of the work I have seen there seems to me to be a very considerable future for them if money is spent on bringing them to a commercial size.
The next big industry with which the Report deals is the railways. In this debate, the railways, I am afraid, 419 especially as regards the poor old steam locomotive, have come in for a good deal of criticism. It is said, and said quite truly, that the efficiency of the steam locomotive is only 5 per cent. to 8 per cent., the reason being that no one has yet discovered a way of putting a condenser on a steam locomotive to make it use what the engineer calls the "toe of the diagram." Obviously, questions of size and weight prevent the addition of this particular apparatus to a locomotive. It is very unfortunate, but there it is. It is claimed that the efficiency of the electricity grid is 22 per cent., whereas the efficiency of the steam locomotive, as I have said, is only 5 per cent. to 8 per cent., and therefore there would be a very great saving in this respect.
There would be considerable saving, but nothing like that which the figures held out would suggest. The figure of 22 per cent. is the figure at the bus-bar of the generating station. What the locomotive engineer is interested in is the figure at the draw-bar of the train. There are considerable losses in the electricity transmission system, in the conversion from alternating current to direct current, and in the electric locomotive itself. I think it will be found that the efficiency of the electric locomotive will be from 17 per cent. to 18 per cent., as compared with the 5 per cent. to 8 per cent. of the steam locomotive. But even taking that into account, from the point of view of fuel consumption there is still, no doubt, a very great advantage in electrification. I do not think—and the Minister has said as much—that there can be any wholesale electrification at the present time from the point of view of the saving of fuel, because the capital charges involved would be so enormous that it would be ruled entirely out of court. There may be some specialised traffic considerations which will enable certain systems to be electrified, but purely from the point of view of saving in fuel consumption it is not practical politics.
Mention has been made of other forms of traction, including the diesel-electric locomotive. The diesel-electric locomotive is an extremely efficient machine. We have seen recently, in the last five years, in the United States a complete revolution in the form of railway traction, and practically every new locomotive built in that great country in the last few years 420 has been diesel-electric. But, unfortunately, the diesel-electric locomotive, like all these things, is expensive. It costs about two and a half times as much as the steam locomotive of comparable size. Of course, it has great advantages in thermal efficiency and availability. But in the United States conditions are entirely different in many ways from those which obtain over here. In the United States they are able to run trains from Chicago to Los Angeles without any change of locomotive at all. They have two days of continuous running followed by six hours' servicing. Then the locomotive goes back and does another two days' continuous running. In this country we have no conditions comparable to that, so we are not able to absorb the heavy capital charges that are involved in the diesel-electric locomotive to the same extent as they are absorbed in the United States. Still, I feel confident that as the years go by we shall see considerable development in the "dieselification"—if one may use such a word—of the lines of this country.
The Minister has mentioned that certain new secondary services are being developed. He said diesel coaches are being employed in Yorkshire. This has been done for a number of years in the Western Region. Why the other regions have not copied that example I do not know. I was very much interested to learn that the Railway Executive are going to order a number of diesel shunters. Here, again, there is increased capital cost. But in the case of the shunter you can make full use of the increased capital cost, because you can run the engine for three shifts—twenty-four hours a day, in fact—without having, as in the case of a steam locomotive, to return it to the sheds for cleaning out of the firebox. So you get a return of your capital charge and a very good saving in the matter of fuel consumption.
Mention has also been made of the gas turbine which is being tried out in the Western Region. A gas turbine fired by coal is also under development. So far as one can gather from the figures one reads, there seems to be no advantage in the gas turbine as compared with the diesel in the matter of economy. The gas turbine, moreover, shows a considerable increase in cost, and, so far, maintenance expenses are high. Unless there is a big change in the development of the gas turbine (it may come about in the next 421 few years, as research in connection with this particular engine is very active) there are many snags to be overcome. One of the most important is that it is relatively inefficient at low loads, and this greatly affects its utility in the railway service. I apologise to your Lordships for giving you all these details, but the question of diesel traction has been raised in the debate and it is certainly a very important matter.
As to the individual fuel-using industry, there are a whole body of general industries. Far the most important of these industries are the iron and steel industries. They are, as your Lordships know, extremely efficient—or most of them are. Every B.T.U. is chased by highly-skilled technicians and engineers, and I think we may rest assured that these great industries are very scientifically conducted, especially as regards fuel consumption. I was interested to hear what the noble Lord said when speaking about the danger of converting the railways to the use of oil firing in case of an emergency. A number of great steel furnaces to-day are being converted to oil, and it seems to me that we have to face up to this question. In view of the fact that our fighting forces will he entirely dependent on imported fuel, and that we have to live to a great extent on food imported from abroad in time of emergency, I do not believe that we should consider seriously this question of supplies being cut off. If supplies should he cut off, well, the country will be absolutely sunk. We cannot let this question of the possibility of enemy action cutting supplies of oil fuel affect development in these directions. We cannot segregate one thing and say that lack of it is going to be more dangerous than lack of another. I was a member of the Oil and Coal Committee some years ago, and we went carefully into the question of the problem arising from the possibility in the case of emergency of the cutting of the supply of oil fuel from overseas. After examining the question fully we came to the conclusion that it would be hopeless to say that we should rely on the production of oil in this country, on the assumption that oil was going to be cut off from abroad. That applies to all questions in connection with the supply of oil.
As the Report clearly brings out, the fuel efficiency of many industries is 422 extremely low. The Lancashire boiler, of which there are hundreds in use in different factories, is capable of a thermal efficiency of 60 per cent., but is often run at about 40 per cent.—a great waste of fuel, which is a serious matter. One of the proposals contained in the Report is to encourage a technical staff to go round and advise industrialists on the improvements which can be quite cheaply made in running their plants. Many of them lack instrumentation. Instruments are not difficult or expensive to buy, and I am certain that part of the lack is due to the fact that people do not know the type of instrument to get. This highly-trained staff, who are experienced in this class of work, will be able to advise industrialists to get the best instruments they can and to take a real interest in making their plants efficient.
Mention has been made of the pass-out steam turbine, which can effect a great saving in fuel. This is a well-known device, which has been in operation for a number of years, but unfortunately its capital cost is high. As everyone knows, industrialists to-day find it extremely difficult to save any money at all. Because the Chancellor of the Exchequer makes such demands on the surplus at the end of the year, the unfortunate industrialists have to decide in which direction they will devote the small amount left for improving their organisations. I think we must agree that, both from their own point of view and from the national point of view, it is better that they should put that money into new tools and new apparatus than spend it on expensive plant for saving coal. I am afraid that this is the inevitable result of the present system of taxation, and I only hope that the Government will give this problem their most earnest attention when they come to consider the national finances.
I have already spoken at length and have no time to refer to the interesting but voluminous account of the domestic load dealt with in the Report. It is a matter which has created great interest in technical circles, and this Report has always been looked on as a standard work, which reminds us once more of the difficult problems involved. Without occupying more than a few minutes longer, I should like to refer to one or two of the recommendations of the 423 Report. On page 71, Recommendations (17) and (19) deal with the establishment of a service for providing industry with advice in fuel economy. As I have said, I think this is a wholly admirable service, which should be encouraged in every way. But there is one difficulty. Where are the technicians to be found to carry out this service? They are in very short supply. At the present moment the schools from which these technicians come are the Fuel Research Station and the British Coal Utilisation Research Station. These men go to these stations as graduates and go out into the world as highly efficient fuel technicians. But I understand that the grants to the Department of Scientific and Industrial Research are to be cut. We heard in a recent debate from the noble Earl, Lord Halsbury, how very serious the situation was. I hope that the noble Lord, Lord Leathers, will approach his colleagues to see what he can do to stop the grants for this important service being cut, because I think that as a result of this debate we all realise how essential it is that men of this high grade should be available for the fuel industry.
Another interesting recommendation, Recommendation (26), is that the Government and other public Departments should take the lead in promoting fuel efficiency. I was interested to hear what the Minister had to say to-day, but I should like to ask him one or two questions, because it seems to me that the Government lag behind in giving a lead to industry. I should like to make a suggestion to the noble Lord. In Westminster we have a number of great Government offices. There is no better opportunity for a district heating system than in Westminster. It is a thing that has been discussed time and time again, and surely it would give the whole fuel industry great encouragement if the Government were to set up a district heating system to heat their own offices in this locality. This system is used in New York, in Russia, and elsewhere, but there are only one or two in this country—one of them happens to be near here, in Westminster. I hope that the Minister may be able to persuade his colleagues to do something of that kind. I also suggest that it would be a good thing if the Ministry itself could be heated by a heat 424 pump, one of the latest devices in heating efficiency. It would not be a very expensive thing. Why cannot the Minister get his own Ministry heated in this way, and so give encouragement to these engineers and experimenters who are developing these interesting devices?
There are one or two other points to which I should like to refer. Recommendation (30) says that electricity tariffs should discriminate charges between peak and off-peak use. That is a matter which has been discussed for years in the electricity industry. For the domestic consumer, it is uneconomic. It requires a great deal of extra apparatus and a good deal of supervision, and I am certain that the general opinion in the industry is that such a scheme is not worth while. As regards the industrial consumer, there are many arrangements now in operation whereby firms who are heavy users and who keep off peak periods get a special tariff. I was interested to hear what the noble Lord, Lord Leathers, said about Recommendation (39), dealing with the setting up of an Advisory Committee to deal with tariffs. I am pleased at the conclusion he reached. It seems to me that the Minister has at his disposal all the information available and should make these important decisions himself. No Committee can make them for him.
As regards Recommendation (40), I am sorry to learn that it is not approved by the Government, because it seems to me that there is a great place for a wide consideration of future power policy. I was talking a moment ago about the lurgi process, which makes low coke. It is a process which uses coal and non-coking coal, and can be set up in a great many places. One can conceive of a big national plant being set up to supply gas produced by this method to stations a long distance off, where gas was formerly produced locally. You might have lurgi plants whereby gas was produced at high pressure, and you would transmit that high pressure considerable distances, thus having great advantages over the present system in which the gas is transmitted only short distances. The question of water supply for cooling is also a big national question. I should have thought that a far-forward-looking Committee would be of considerable assistance to the country. There is one other point which we hope will arise soon—namely, 425 the question of the use of nuclear energy for the production of power. That is probably some years off yet, but this would be a very good Committee to consider a problem of this character, to decide where the particular station should be put up, its association with other stations, and so on. However, I am afraid that the Government do not agree with that. I apologise to your Lordships for having taken up so much time. I once more wish to thank the noble Viscount and his Committee for having produced such an interesting Report.
§ 4.52 p.m.
§ LORD MORRISON
My Lords, I do not propose to cover any of the points made by the noble Viscount, Lord Falmouth, in his interesting speech, because, much to my regret, I have neither the scientific nor the technical knowledge to do so. As one who has served with the noble Viscount on the Metropolitan Water Board for many years I have always respected the high standard of his technical knowledge, and I am pleased that he has given the House some valuable suggestions this afternoon.
I want to deal briefly with one point only—namely, the domestic waste of fuel. As several noble Lords have observed, the Report makes many useful suggestions to lessen the misuse of fuel and power. However, I think that more might have been recommended in the Report to check the considerable domestic waste of coal that is going on. To me the most interesting chapter of this Report is Chapter V, which deals with the domestic use of fuel and power. It points out that the inhabitants of Great Britain use in their homes, either in the form of solid fuel or in the form of gas and electricity, for warmth, cooking, hot water and lighting, nearly one-third of the coal mined in this country. No less than 35 million tons of coal are used directly in people's homes. As noble Lords know, the chapter ends with no fewer than sixteen recommendations, which are no doubt all valuable and practical. In particular, I was impressed by the active steps taken to encourage the introduction of the new fuel-saving, grates for domestic use, which have been referred to more than once this afternoon. I am sure that the general introduction of this type of grate would result in considerable saving in the housewives' fuel bill.
426 But of the sixteen recommendations appearing on page 39 of the Report, only one, in my opinion, refers directly to the avoidable waste of domestic fuel—that is, recommendation (15), which says:The National Coal Board should negotiate with the miners new agreements to exchange reduced concessionary coal for an adequate cash compensation.It is common knowledge that there has been considerable waste for a long time in the 5 million tons per year of concessionary coal—usually called, I think, free coal. When something is handed out free, or apparently free, some amount of waste is not unusual. Miners tell me that a great deal of unburned or partly burned coal finds its way to the refuse tips of the local authorities; and the local authorities in mining areas tell me they do not think it worth while to recover it. I hope that the National Coal Board and the miners will be able to agree on these negotiations. I do not know whether the noble Earl who is going to reply to the debate will be able to tell us whether these negotiations have already started, and, if so, how they are progressing. I know it is not an easy task.
The main question I want to ask is: Why have the Committee no recommendation to make that housewives might be less careless and thriftless in the use of fuel? My noble friend Lord Macdonald said in his speech that he hoped we should never get back to the days when coal was cheap; and that during those days it was so cheap that there was a criminal waste of coal. I am not going to use such a strong word as "criminal," but I will prove to your Lordships, and to any people interested, that even with the price of coal as it is to-day there is an amazing waste of coal going on among housewives. They pay a big price for coal, and one would have thought they would try to extract the full value from it; but they do not.
Some noble Lords may remember that I mentioned this matter in a debate on March 5 of this year. I pointed out that in one district of which I know the local authority had installed a plant which recovers cinders and half burned coal from the town refuse. The cinders and half-burned coal recovered have a calorific value of 60 per cent. of the original coal. This finds a ready sale for brick-making, heating greenhouses, and for other purposes. It is sold at £1 a ton at the works, 427 and could be sold ten times over. Judging by the demand, I should say that it is well worth it. This plant operates from November until April, and the amount recovered from the refuse of one local authority is fifty tons per week. I am not talking about something that happened in the days when coal was cheap, but about something that happened last week, and is happening every week at the present time, with coal at its present price. In weight it amounts to 9 per cent. of the town's refuse. I am not suggesting that every local authority should have this plant installed—the capital cost would be prohibitive—but I should like to make three suggestions.
The first is this. There are between seventy and eighty mechanised recovery plants belonging to local authorities in this country. Some of these could be inexpensively adapted to recover waste fuel, and on the basis of the figures I have given this would be a profitable business for them. My second point is this. I have previously told your Lordships that approximately one million tons of refuse is barged down the River Thames every year. That has been a headache for those of us interested in this kind of problem, as I have been almost all my political life. Your Lordships will be pleased to know that a scheme has been devised, and is now taking definite shape, to cope with this problem. The inspiration behind the scheme is the people in the iron and steel scrap metal movement. The proposal is to establish down the river plant, with magnetic separators and a moving belt, to recover mechanically from the refuse of London scrap metal, which will be passed hack by the belt on to the barge for delivery at the de-tinning works on the river. The estimated amount of scrap metal that can be recovered in this way is something of the order of 9,000 tons a year.
I am mentioning this although scrap is not fuel (I am perfectly well aware of that) because now seems to me to be the psychological moment when the Ministry of Fuel and Power should get into touch with the people who are promoting this scheme and getting well on with it, and suggest to them that they should at the same time install a rotary screen to recover the waste fuel that will come from a million tons of refuse. On 428 the basis that I have already given you, and which I could confirm from various sources, about 9 per cent. of the town's refuse consists of fuel with a calorific value of 60 per cent. of the original coal. That gives an opportunity of getting a great deal at practically no expense. because if this plant is going to be set up, as it is, for the specific purpose of recovering scrap metal, then it will be only a very simple process, and inexpensive to the whole layout, to put in a rotary screen which will collect the cinders and half burnt fuel and return them to the brick-makers, the greenhouse keepers and all the other people who are clamouring for cheap fuel at this time.
My third, and final, suggestion is in reference to Recommendation (11), which asks for a publicity campaign in support of new appliances. I hope that when that publicity campaign is carried out, if it is, there will also be an appeal made to large sections of housewives who have not had the good fortune to obtain the new fuel saving grates, and are not likely to get them for some years to come, or whose local councils are not sufficiently enterprising to install a recovery plant. We should tell them, in plain language, that throwing away cinders and half burnt coal is just as bad as tearing up money and throwing it away. I have told you of one town, no more thriftless than any other, where this is going on at the rate of 50 tons a week. I hope these three suggestions may he worth examination.
§ 5.3 p.m.
§ LORD WOLVERTON
My Lords, I also should like to pay my respects to the noble Viscount, Lord Ridley, and his Committee, for the excellent work they have done in producing this Report in about twelve months. It is an extremely valuable Report, I am sure, to all those who are interested in the great problem of fuel and power in this country. When all is said and done, coal is the life-blood of this country. Without coal we can do nothing. Therefore, as has been said by many previous speakers, we must see that it is conserved in every possible way.
I intend to speak for only a short time to-night, but I must say that I was very pleased indeed that the Committee, in their recommendations, came down on 429 the side of freedom of choice for the consumer. In the few years I spent—very happy years—as a director of an electricity supply company between the wars and until nationalisation after the war, I saw tremendous progress, as many of your Lordships have done, in both the gas and the electricity supply industries, and I think that progress was made because we had freedom of choice. The electricity industry was a young and thriving industry which was always going ahead, and it made the gas industry extremely competitive and efficient. In the earlier days, I can remember, when I joined the industry, that the gas industry was not quite so efficient with some of its domestic appliances. It was because of that important freedom of choice that it became extremely competitive, and I should like to emphasise that the consumer then received good service from both gas and electricity at a very reasonable cost. So I am extremely glad that there is not going to be any direction against freedom of choice.
I should like to take up a few moments upon Recommendations (6) and (7) which deal with open grates and the cutting down of draught in chimneys so that one can burn non-smokeless fuel. That has been worrying many of us a great deal lately. I am informed, and I hope I shall be corrected if I am wrong, that the amount of smokeless fuel—anthracite and prepared fuels—available for the home market is about 1 million tons a year. Many of these modern cookers, grates, stoves and so on are designed excellently to cut down inefficiency and fuel costs enormously, but they are designed for these smokeless fuels. This has caused a great deal of disappointment to a large number of people who have spent their savings in putting in these appliances and have then found that they are not able to get the proper fuels. I was delighted to-night, therefore, to hear Lord Ridley say that experiments are in an advanced state and that appliances which will enable consumers to use open fires burning non-smokeless types of fuel, which, of course, are more abundant, are nearly ready to be put on the market. I think that matter needs a great deal more consideration. We must not encourage people to put in appliances which, although they would save fuel, cannot be supplied with the right type of fuel.
430 The other point with which I should like to deal, and which has really been admirably dealt with by my noble friend, Lord Falmouth, concerns electric power stations. I entirely agree with what he said, that the average thermal efficiency of all the stations of the British Electricity Authority is running at about 22 per cent., while the twenty most efficient stations in this country are running at a thermal efficiency of 27 per cent. The report which the British Electricity Authority has submitted to the National Fuel Policy Committee says that no less than 9.5 per cent. output capacity of their generating stations, representing 1,255 megawatts, is twenty-live years old. If 9.5 per cent. of the total capacity of your plant is twenty-five years old, that is not very efficient according to modern standards, because, as your Lordships well know, a tremendous improvement was made a few years prior to the war and there has been an improvement since the war in the thermal efficiency of power stations.
As I tried to point out recently in a speech I made during the discussion on the gracious Speech from the Throne, America (and here I should like to correct a statement I made—an under-statement) has about three times the amount of power per worker that we have in this country. I think I said about twice, and I ant told that I was under-estimating, and that it is nearly three times the amount. Therefore we must push along with all possible speed, even faster than we are doing to-day, with the installation of generating stations. I agree with my noble friend Lord Falmouth that they are now extremely costly. They used to cost about £20 a kilowatt and now they cost about £50 a kilowatt. But, as the Report points out, we shall not get nuclear energy for some years, oil plays a small, though important, part, and water power plays a small part. There is a very interesting paragraph in the Report on water power. At the present moment the water resources developed in Scotland and North Wales save about one million tons of coal, and it is estimated that by 1961 or 1965 they will probably save another two million tons. That is, of course, a very small proportion of the total amount of coal that the British Electricity Authority uses, which is about 35½million tons a year. Therefore we must rely on coal, for a number of years 431 at any rate, to produce the electricity which we so badly need. I hope we shall be able to push along there to save fuel, and also to give the extra power per worker which is so badly needed. With those few words I should like to congratulate again the noble Viscount, Lord Ridley, and his Committee for producing such a valuable Report which I am sure will be greatly appreciated in all quarters.
§ 5.10 p.m.
My Lords, I take the view, along, I think, with every other noble Lord who has spoken, that we ought to welcome this Report as both timely and pressing. I should like to join with other noble Lords in congratulating my noble friend Lord Ridley and his colleagues for having produced such a carefully prepared and comprehensive Report. But the Report, as it goes, does not provide a national fuel policy in itself: no Report could. Policy must come from the Minister. What this Report does is to bring together a great many important and relevant facts which will help to encourage fuel efficiency in one way or another.
Some of these facts are new; some we have heard of before and are constantly before us, and some we have heard of before and, I am afraid, have forgotten or otherwise pigeon-holed. What the Report does, which is tremendously important, is to make certain recommendations as to the best form of machinery whereby all the other detailed technical points can be constantly assessed, constantly brought before those who have it in their power to put them to some good effect. The particular aspect with which I want to deal for a moment is one which I see the Report itself marked as its main recommendation in they industrial field, and it concerns the various advisory services for industry. It comes under the Committee's Recommendations (17) and (19), though it is a point which underlies a great many of the other recommendations, and in particular the recommendation about the increased effort which should be put into technological instruction and training.
As I understand the Committee's proposals, there would be two quite separate advisory services. There would be the Minister's Advisory Service, expanded, perhaps, which would be available to help the Minister to see that Government 432 Departments—as my noble friend Lord Leathers said—and, I hope, the nationalised industries, set a very high standard of example in the way they use fuels of one kind and another. Then there is the proposal that there should be a second advisory service to be established by industry itself. I think that industry should welcome this proposal, more especially when we hear that the National Coal Board are prepared to make such a helpful financial contribution to its administration. But do not let us forget that advice by itself is not necessarily enough; it will not necessarily achieve what is needed. I am afraid that often there must be some inducement, some attraction, coupled with the advice in order to make sure that that advice is heeded.
There is already in existence some attraction, in the form of the £1 million loan scheme, but although it goes in the right direction I am afraid that it does not go anywhere like far enough. In fact, I should doubt very much whether a great deal of advantage has been taken of it. I hope that my noble friend Lord Selkirk, when he comes to reply, may be able to tell us the extent to which industry has made use of that scheme. I hope that it will be a good deal, but I am rather dubious about that. What is needed is something on those lines which will take us very much further—perhaps the loan scheme, with far more attractive rates of interest; perhaps a loan scheme without any interest at all. If that is not approved, then I would make two other suggestions. The first is some scheme whereby capital spent by firms to install fuel-saving apparatus should be rewarded with some tax recompense. I believe that that would be difficult, because it would be setting a precedent. If that suggestion is ruled out, I would make one other. I believe there is something in it, although I admit that it could reasonably apply only to medium and small firms, and not to very large firms. This suggestion is that the National Coal Board might consider providing these smaller firms with certain equipment, either on hire terms or hire purchase terms, in much the same way as gas authorities and electricity authorities hire or let out on hire-purchase terms certain domestic equipment.
To give your Lordships an example of the particular sort of equipment of which 433 I am thinking, these are automatic stokers for boilers. My noble friend Lord Falmouth referred to the Lancashire boiler, and to the fact that it was often inefficiently fired. If one fits automatic stokers to this type of boiler, greatly improved results can be obtained. Yet very often the individual firm has to think whether it is going to spend its money on such equipment as that or on new tools. Again, as my noble friend Lord Falmouth suggested, the firm go for the new tools. If the National Coal Board would be prepared to install automatic stokers, I believe that it would pay them. The industrial firms would use less coal, they would use a cheaper and a smaller coal, thus freeing for export the larger and more expensive coal which, as has already been mentioned, is in short supply. On the other hand, the firm would have a much smaller coal bill to meet and, obviously, should not object if they had to pay a reasonable levy on this apparatus, so that the Coal Board could recoup itself for the outlay of the equipment. In mentioning that, I do so only by way of illustration of my point that, vitally important as advice is, it must be backed up with some tangible inducement if we are to persuade all firms, both small and large, to use their fuel to the greatest possible efficiency. I believe that that is particularly important to-day, because, though saving of fuel is just as important in the long-term interest, it may not be so apparent and, therefore, quite so compelling, to individual firms for the immediate future, as in fact it was at the time when the Ridley Committee was appointed.
That brings me to the composition of this new advisory organisation to be set up by industry. Presumably its members will be appointed by industry itself, but to give industry the inducements to put in labour-saving equipment, I suggest that that organisation must in some way be authoritatively linked with the Minister; because industry has no inducements to offer, and it is only the Minister who has the power to offer some form of incentive or attraction for the installation of suitable fuel-saving equipment. Therefore, I suggest that although this is an organisation which is to be appointed by industry, it ought to have among its members a high-ranking official of the Ministry of Fuel and Power to provide that link with the Minister. I 434 would suggest that point to my noble friend for his consideration.
The only other recommendation of the Ridley Committee on which I should like to comment is Recommendation (40). There is a good deal to be said both for and against this recommendation, but I gather that at the moment it is not accepted by Her Majesty's Government. If it had been accepted I was going to suggest that here again there should be a representative of private industry on the proposed planning board. Without the planning board, which we are told is not going to be set up, I am inclined to ask my noble friend whether, as things are now, adequate machinery does exist so that when a nationalised industry puts forward some major matter of policy private industry has an opportunity of expressing its view first and of being consulted.
I should like to give one example of what I have in mind. I apologise to your Lordships for doing so, because I quoted this example in your Lordships' House some months ago in another debate. Let us take the case of the Plan for Coal in which the National Coal Board plan to spend £600 million and to produce between 35 and 40 million extra tons of coal in ten years' time. Was industry given an opportunity to suggest that, with the need to limit overall investment throughout the country, some of that investment of £600 million, even if only a small part of it, might possibly have been put to better use? That part might perhaps have been used to give more immediate results if it had been spent on fuel savings, instead of on additional fuel production. I am rather encouraged in what I say by the article in The Times of this morning drawing attention to the lag behind schedule which the coal plan was showing. I gather that the reason the plan is behind schedule is a shortage of the special type of engineers who are needed for that kind of engineering work. If that is so, surely that investment, which it has not yet been possible to employ, could have been better employed on fuel-saving equipment where, broadly speaking, there is not that shortage of the type of technician required.
I welcome the Report, and I welcome the extent to which Her Majesty's Government are adopting some of the 435 recommendations. But let us not stop there. We want a fuel policy that is constantly being brought up to date, so I hope that this Report will not, after certain recommendations have been taken out of it, be put in a pigeon-hole. I hope that it will be kept constantly before us, especially all those who are users, and therefore potential wasters, of fuel.
§ 5.23 p.m.
My Lords, I wish to congratulate the noble Lord, Lord Macdonald of Gwaenysgor, on initiating this debate, and to join with him and with other noble Lords who have spoken in paying high tribute to the noble Viscount, Lord Ridley, and his Committee on the splendid work they have done, which has resulted in the Report now under discussion in your Lordships' House. This Report, I feel, certainly deserves to be a best seller. It indicates many of the ways in which better use can and must be made of this vital and slowly diminishing asset. I will not detain your Lordships by re-emphasising all the points in the Report which have already been stressed by previous speakers. I should, however, like to mention two: one technical and the other psychological.
The technical point relates to the need for the efficient cleaning—not only grading, but cleaning—of coal at the pit head. This is essential if the present enormous cost to the nation of transporting many millions of tons of incombustible material, sold as coal, and its removal as ash or clinker at a later stage, is to be avoided. The cost of conveying and handling the ash or clinker alone is of the order of £40 million per year. This enormous cost and the labour it involves can and should he avoided. I suggest that if coal is to be burned with the efficiencies approaching those achievable with petroleum products, its ash content must be reduced by the elimination—and that at the pit head—of the separable impurities. That can be done.
Now for the psychological point. It relates to the immense importance of "selling" the need for action in fuel efficiency to all who stoke, whether the domestic grate or the factory boiler. This is an all-important and, indeed, a vital matter, and I suggest to the noble Lord, Lord Leathers, that this would be an admirable subject for him to get on to 436 the air through the B.B.C. and give a fireside broadcast talk about how efficiency can be achieved. Some of your Lordships may remember that in 1946, a relative of the noble Lord, Lord Lyle, who is vitally interested in technical questions, delivered an interesting address on fuel questions to one of the technical institutions. In that paper Mr. Oliver Lyle showed that the conversion efficiency of the thermal energy latent in our coal into useful work for industry and/or domestic purposes was of the order of 15 per cent. That is far too low, and something could be done to get a much higher figure. Therefore, as has been stressed by other speakers, there is a great deal to be said for putting into operation to the fullest possible extent the admirable work which was done and reported upon by the noble Viscount, Lord Ridley.
This indicates to me the desirability—more,thenecessity—to support the work done by Lord Ridley by appointing as soon as possible a Royal Commission. As your Lordships will remember, the last Royal Commission on coal sat some twenty-five or more years ago—it was in 1925, I think—and the noble Viscount. Lord Samuel, presided over it. This Royal Commission was certainly a model of speed in action, since it reported within, I believe, six months, or at any rate thereabouts, of its first sitting. I suggest that the time has come when this vital question should be the subject of a Royal Commission. I hope that the noble Lord, Lord Leathers, will take that matter into consideration and that this suggestion may be translated into action in the future.
§ 5.30 p.m.
§ THE EARL OF SELKIRK
My Lords, the purpose of this debate was to examine the policy which this country should pursue in fuel and power. Quite frankly, its object was to enable the Government to have the benefit of advice from all quarters. We have indicated a policy in the very broadest outline, and, clearly, it is not the final word on what we have to say. It is worth noting this: that although this is a subject on which people hold extremely varied and, indeed, controversial views, neither in this debate nor in the debate in the other place was there any discernible political trend on the way those views had been held. I think we can readily recognise that, in 437 those spheres where controversy has raged at its most intensive heat, we have perhaps made a little progress.
The immediate subject of our debate to-day is the Report which has been issued by the Committee presided over by the noble Viscount, Lord Ridley. A number of noble Lords have said that it is not light reading. I do not think that is untrue, but I go on to say that I rather think it would be a dull soul who found nothing in the Report to be of some interest to him, no matter in what sphere of life he happened to work, because there is not one of us who at one time or another has not coped, or tried to cope, with problems of lighting, heating and cooking. I do not think anyone would question that this was a strong Committee. It was a Committee whose members must have approached the problem from many different angles. I feel that it speaks volumes for the ability of the noble Viscount, Lord Ridley, that he was able to gain on that Committee such a full measure of agreement as he did. This is the third Committee over which the noble Viscount has presided, and he bids fair to rival the noble Lord, Lord Beveridge, as the writer of important Reports on different aspects of our social and economic life.
As has been emphasised by my noble friend Lord Leathers and other speakers to-day, when the Committee met we were in rather a different position, at least temporarily—that is to say, for a period of nearly ten years we had been in an almost continuous state of fuel crisis. That was the atmosphere in which the Committee met. It was felt that there might be some fundamentally new approach to this whole subject. This position, of course, was, and is, very greatly complicated by the fact that many people do not know whether the shortage is due in some way to our producing plants—for instance, the electricity plants—or whether it is due to the shortage of coal. This position is necessarily complex because we have seen the most far-reaching developments in the use, for instance, of gas. Production of gas has doubled in thirty years. Electricity has gone ahead far more quickly than that—in fact, I believe that its production has doubled every ten years since the reign of Queen Victoria; and its consumption has increased since 1920 by something like fifteen times. All that has been going on whilst there has been 438 no comparable trend in the production of coal, no trend comparable with the increase in the production of electricity. The coal industry, however, remains the basis of our power, both gas and electricity.
That is the confusing situation which might lead people to think there was some fundamental error in the way in which our power was being applied. And, as the noble Lord, Lord Wolverton, has told us, many countries use far more industrial power than we do, notably the United States, which has three times the amount of power at its industrial disposal that we have.
§ LORD KERSHAW
When the noble Earl says that there is three times more electrical power in the United States than in this country, surely he means "per man," or some such phrase as that.
§ THE EARL OF SELKIRK
The noble Lord is quite right. I apologise. I meant, of course, three times more per head.
I should like to emphasise to the noble Lord, Lord Wolverton, that we in this country have never denied power to industry. We have, of course, had to spread it; we have had at times to shed it, and we have had at times to cut it; but no industry has been denied power. Therefore, it is fair to say that, if we had three times the electricity in this country to-day, we could not be sure that industry would necessarily take it up. In the supply of electrical power we have advanced at roughly the same speed as industry can take it up. It is, however, absolutely vital to the life-blood of this country that adequate power should be available, because it is on that that our exports and life must depend. It is proper, therefore, that we should scrutinise it carefully. To put the matter in its simplest language, this Committee found that a considerable extension of the best existing practice would make a material change in the measure of efficiency with which these fuels could he used—I emphasise that point. It did not suggest any radical alteration, but merely that the standard of efficiency should he brought up to the best existing practice. I suggest that this is an important point, because it means that the improvement is something within the compass and ability of everyone.
The Report attempts to draw together the desirable and the practical, a problem 439 which is, in public affairs, a very common one. It is what we very often try, one way or another, to do. But the Committee do make this point and their conclusion is, I think, abundantly clear: that there is no simple way out. The Report lays down quite clearly the principle that, all through, the best results will probably be obtained when the consumer can make an informed choice in circumstances in which the price reflects true cost. If I may say so, to a great extent that is the answer to the point which the noble Viscount, Lord Falmouth, made. It was an important point. He said that, on the one hand, we can save capital and, on the other hand, we can save fuel; and we have to decide in our minds which it is we want to do. Very bluntly, the answer is, both; or to endeavour to do as much of both as we reasonably can. If, to a great extent, the price factor reflects the real cost, then accordingly that choice will be so much easier.
I should like just to add this, and I think it is proper to add it. The Report recommends that the consumer should be given freedom in this sphere. Freedom in this sphere, as in other spheres, brings responsibility, which is one of the reasons why some people do not like it. But the Committee lay down fairly that that responsibility in economy rests not only on the housewife but also on the industrial organisation, or the big national corporation, to do its part in following an economic policy. I should like to make this point. A large number of questions have been raised. I will endeavour to answer some of them, but the recommendations which Lord Ridley's Committee made are not, in many cases, those on which the Government can give a simple answer. They are matters which require further negotiation with different bodies. It is therefore right that on certain subjects nothing should be said until discussions have taken place with the National Production Advisory Council for Industry. That Council will be meeting in the beginning of December. Representatives of the Trades Union Congress and representatives of industry will then meet and many of these problems will require discussion at that meeting before the Government can make any further or detailed pronouncement
440 The noble Lord, Lord Lawson, was going to speak, and he gave me notice that he wanted to raise the question of boring. He is concerned about the national resources of coal. In the National Coal Board Report I find these figures in regard to the aggregate depth of bores of recent years: in 1947, 30,000 feet was bored, which I am given to understand was the largest amount of boring ever carried out in any one year. In the year 1951, however, the figure given is 172,000 feet, which is a considerable advance on 1947. Therefore I think the noble Lord can rest assured that adequate steps are being taken to prospect for coal in many parts of the country.
I shall not attempt to make any comments on the speech of the noble Viscount, Lord Falmouth. Anyone who heard his speech must have known that there was a man speaking who really understood his subject. It is just that sort of speech which enables this House to play a full part in the affairs of this country. I wish the noble Viscount would come and speak to us on other occasions. The noble Lord, Lord Morrison, dealt with a number of subjects on which he speaks with great authority. I am not going to answer his points in detail; they are there for examination. We are aware of the points that he is making in regard to miners' coal. I understand that in some cases the coal is repurchased by the National Coal Board, so that point is fully considered. There is little more that I can say; it is a matter of negotiation between the National Coal Board and the representatives of the men.
The noble Lord, Lord Rochdale, raised a number of points. Among them was the question of how the Government loan scheme was proceeding. At the present juncture about one-eighth of the loans available under the scheme have in fact been advanced. Such as it is, I admit it is rather disappointing. The noble Lord suggested a number of incentive schemes to get people to save coal. I think one has to be careful about that, because, by and large, the principle of the Ridley Report is that to a large extent the price paid should reflect the true cost. One has to be careful about saying that it is necessary to bribe people to run their own businesses. I am not saying that there may not be cases where that point 441 should be considered. I am sure the points that the noble Lord has made will be carefully considered, but one has to be very careful about going too fast in that particular direction. He also raised the question of investment in fuel-saving devices as opposed to investment in the National Coal Board's development of coal production. I do not think anybody who read The Times this morning would suggest that any deliberate effort should be made to reduce the investment in regard to the National Coal Board. I do not believe these things are really alternatives at all. I do not think there is any difficulty in investing in fuel-saving equipment when it becomes necessary to do so.
I have not by any means covered all the points that have been raised. If I may say so, many of the points are clearly not suitable to be dealt with in debate. I have endeavoured to cover a number of the points that have arisen. On behalf of Her Majesty's Government I should like to thank all noble Lords who have taken part in this debate or who have given their advice in one way or another. There is one thing that stands out in this debate, and indeed in the Report—namely, that coal remains king. Coal still remains the vital source of our fuel and power. There is no alternative. We must safeguard it wherever we are—whether we are a housewife or in charge of a large industry. It is of tremendous importance—the Government are fully aware of that. I would add only that no debate on fuel efficiency is ever concluded. The last word will never be said; it is a debate which continues for ever. If to-day we have made our contribution in some small way, then I feel sure that we should be well satisfied.
§ 5.45 p.m.
§ LORD MACDONALD OF GWAENYSGOR
My Lords, there is little left for me to do. I follow the noble Earl who has just spoken in thanking all who have thought fit to intervene in the debate. It has rot been an easy debate, but it has been very helpful. I was very pleased that Lord Ridley found it possible to be here and to give us the benefit of the views which he and his colleagues had in mind in compiling the Report now before us. I would ask the noble Lord, Lord Leathers, as I 442 know he will, to keep in mind his promise. There is concern in North Wales regarding the particular matter to which I have referred. Housewives save fuel in order to save money, as well as for other purposes, and I want the noble Lord to clear up the impression some people have in North Wales, that if they use less electricity they will still have to pay just as much money as they are paying now. That is not a very helpful attitude. The noble Lord has promised that he will look into it, and I hope he does. I have no other questions to raise. I have achieved my purpose—namely, to obtain a statement of Government policy in this matter. I realise that there are limitations and that there will have to be discussions with various bodies. All this will take time; but, once again, I impress on the Government the need not to ease up in this matter. My Lords, I beg leave to withdraw my Motion.
§ Motion, for Papers, by leave withdrawn.