HL Deb 02 April 1957 vol 202 cc965-75

3.10 p.m.

VISCOUNT HALL rose to draw attention to the statement made by the Minister of Power on the 5th March, and in general to the problems that will arise in the course of the future development of the fuel and power industries; and to move for Papers. The noble Viscount said: My Lords, before dealing with the Motion which stands in my name on the Order Paper, I should like to express my regret for any inconvenience which was caused to noble Lords by the postponement of this Motion a fortnight ago. That was done only after consultation with my colleagues on this side and others, because the time was getting rather late and we thought it better to postpone the Motion until we had more time to debate this important matter.

Again, before coming to the Motion itself, I should like to tell the noble Lord, the Minister of Power, that we still think that a scheme for a programme of this magnitude should have been presented to your Lordships' House in the form of a White Paper, giving much fuller details of this important matter than were contained in the statement. We certainly have nothing to say against the way in which the noble Lord replied to the questions put to him, because he was then most helpful and gave a good deal of information. But we feel, as I say, that it would have been much better had that information been contained in a White Paper. I just make that comment, and I trust that the noble Earl the Leader of the House will see that, when important matters of this kind are coming before your Lordships' House, what happened here is not regarded as a precedent.

As your Lordships will see, the Motion on the Order Paper goes much further than merely dealing with the question of nuclear power. We thought it much better to bring in fuel and power generally and to deal, so far as we could, with the programme given to the House about a month ago by the Minister of Power. I am not going to pretend that I can deal with this subject with any scientific or, indeed, engineering knowledge. I was never trained as a scientist or an engineer. So if I should make any mistakes in dealing with scientific terms, then I ask your Lordships to forgive me.

There is no doubt that first the development, and now the operation, of Calder Hall is an outstanding achievement. It must be remembered that at the end of the war, with much assistance from Britain, the United States of America had the virtual monopoly of nuclear science. After the war, Britain was faced with the task of building up her own organisation. And how well this was done! Sir Oliver Franks, in one of the Reith Lectures which were given about a year ago, said that we embarked on a full programme of atomic energy with nothing but the green fields and grey matter, from modest beginnings, on a disused airfield at Harwell. From that time, within ten years, atomic energy has now emerged, and has become most important in the fuel and power industries. It is significant that, while other countries are still experimenting, this country has gone well beyond the conception of Calder Hall, as is made manifest by the new plan before us. We should take pride in this great achievement, for this is the only nuclear power programme for peaceful purposes in the world which has passed its planning stage and is being put in hand—to be completed, we trust, in a relatively short time. This is a great testimony to the outstanding progress made by Britain in this new science and technology.

What a debt of gratitude the nation owes to those who instituted, and later developed, this research! My noble friend Lord Attlee and his Government took an active part in its initiation; and it was continued, of course, by Governments which succeeded the Labour Government. Then the scientists and engineers, with their great knowledge and ability, set to work. Research was greatly intensified, and the result is to be seen in the production of such programmes as we now have before us. Those who are responsible for this great national asset should look upon their achievement with satisfaction, because they have placed Britain in the front of all other nations in the world in the peaceful use of nuclear power. At the present time, as in the past, industrial activity and development are more than ever dependent upon the possession of adequate energy. The provision of this energy must influence the future pattern of industrial development. But we have our problems. Since the end of the war, Britain, with certain other industrial countries, has been under considerable strain, owing to the lack of an adequate home supply of fuel, largely through the great development which has taken place without a corresponding increase in the production of coal.

There is hardly any need for me to remind noble Lords that, next to land and the skill of our people, Britain's coal deposits have been, and still are, our most important asset. Coal has been the foundation of our economic strength in the past, and should continue to be so for many years. How well coal has served this and other nations! Unfortunately, the amount of coal now being mined is insufficient to meet our present requirements. Throughout our long history, until recent years, we have been self-sufficient in providing both for our own domestic comfort and for industrial needs, and still had a large surplus for export. This coal contribution to our export trade and to our own self-sufficiency in fuel no longer exists. This has brought about a radical change in our economic position.

During the last twenty years there has been an increased importation of oil into this country; indeed, from 1950 to 1955 the import of oil had increased by 52 per cent.; and now, for the first time in the history of this country, with the exception of the 1926 coal stoppage, we are importing coal. We see some of our great coal-using industries, such as the electricity industry, now using oil in some of its stations. It is understood that it is going forward to use oil in no fewer than seventeen or eighteen power stations, and will use an amount of oil equivalent to 8 million tons of coal a year. To my great surprise, I saw the other day that the other heavy coal-using industry, the steel industry, has also turned to oil. I read a speech by a combustion engineer of one of the large steel works in South Wales, in which he said that for many reasons oil is now becoming the predominant fuel for the production of steel. Indeed, in the investment programme of the railways, we find that no fewer than 2,500 main-line diesel locomotives are to be installed, which will mean that for their main transport the railways are going to use oil instead of coal. This increasing use of oil must create a serious economic problem, particularly in relation to our balance of payments, because oils of all kinds imported into this country at the present time are our largest import. During last year, the cost of imported oils of all kinds, and coal, amounted to no less than £413 million. It is true that we had some re-exports of oil and coal, which amounted to £161 million, but, as the Minister of Power said in submitting his programme to the House, there was still an adverse balance for the year of no less than £250 million.

Unfortunately, that is not the end of the story, because, taking the estimates for future fuel requirements given by the Ministry of Fuel and Power, it is slated that by 1965 we shall require power equivalent to 314 million tons of coal. To meet this demand it is estimated that we shall produce 240 million tons of coal. The new programme for nuclear power will give us a coal equivalent of 18 million tons. We shall also have a coal equivalent from other sources of about 3 million tons. That, however, will leave a deficiency of a coal equivalent of 53 million tons. The present Home Secretary, Mr. Butler, when Chancellor of the Exchequer in 1955, said that every ton of coal we wasted or failed to dig in this country reduced our reserves of gold and dollars by about £7. More oil can be obtained in only two ways: either by ceasing to export oil which is now re-exported from our home refineries, or by the importation of additional oil. If oil is to be imported, then the reduction of our gold and dollar reserves, based upon the estimate given by Mr. Butler, will amount to nearly £400 million a year.

To leave the matter there would present a frightening situation, and there is no doubt that the largely increasing oil imports were one of the main considerations why Her Majesty's Government wisely decided to proceed with the revised nuclear power programme presented by the Minister of Fuel and Power some months ago. This new programme is a great addition to the first programme which was produced two years ago and which, it will be remembered, was to provide some twelve stations at a cost of £300 million and give an increased capacity for generating electricity from 1,500 to 2,000 megawatts. The new programme is much larger, because it is estimated that it will give an increased capacity up to 5,000 or 6,000 megawatts by 1965.

When the new programme was announced I and many other noble Lords were surprised at the very high cost foreshadowed by the noble Lord, the amount being £1,460 million, which would be almost five times the cost of the 1955 programme for trebling the generating capacity by 1965. I understand that the figure mentioned is not the cost of the new nuclear power station programme, but covers the combined investment programme—that is, the building of nuclear and conventional stations, plus the transmission lines, but not including distribution. The revised amount for the building of the nineteen nuclear stations is about £750 million, which is added to the £2,000 million—that is, the electricity investment programme—making some £2,700 million to be spent upon generating capacity during the course of the next nine years. This must mean that the nuclear power stations under the new programme cost nearly three times more than the conventional stations to build.

I have recently read a report which shows that the situation may possibly alter, because it states that, as a result of further research, the original programme—that is, the 1955 programme of twelve stations—at the design output of the first Electricity Authority station, will give the country a total output of approximately 3,500 megawatts by 1965 Also, it is said that there is a possibility of bonuses in the way of still higher output by the later stations as a result of intensive technological research and development. If that is so, then it means that if we kept to the original programme, as a result of research we should be able to double our generating capacity. Again, if that is so, then no reliance whatsoever can be placed upon the estimate of costs. I am nor, going to deal very much more with the question of costs, because, if the situation is going to be stabilised during the course of the next year or so, it is better to wait for that rather than to listen to a lot of estimates which have been submitted to us in relation to the cost of building these generating stations.

There is one question that I should like to put to the Minister of Power regarding the figure which he gave, because to me it is a little confusing. It is a sum of £177 million. It is assumed that this expenditure is for uranium fuel costs. I find in the Civil Estimates published recently, under the heading "Expenditure on Atomic Energy for 1957–58", a loan to the Atomic Energy Authority of £7½ million for the production of uranium. I should like to ask the Minister whether he can explain if, in the whole investment programme for the generating of electricity, any sum is set aside for the purpose of investing in the production of uranium. We know that there must be a good deal of uranium and it costs a very large amount of money. But if public money is being used for actual production, I think we should know the amount and in what country the investment is made.

Uranium is the necessary starting point of any atomic energy plan. While, for power purposes, it has many advantages over coal, its great disadvantage is that we have no native uranium deposits; it all has to be imported and, like oil, it will cost an enormous amount of money which must inevitably affect our foreign exchange. Fortunately, large deposits are found in Commonwealth countries. The known supplies are in Canada, Australia, South Africa, Rhodesia and, we hope, some other countries, but those I have mentioned are among the main producers. It is stated that Canada next year will overtake the United States and become the largest producer of uranium in the free world. It will produce something like 12,500 tons out of a total of free world production of 25,000. It is estimated that the output for Russia is about 10,000 tons.

We all welcome the agreement which was entered into between the Prime Minister and the President of the United States for a supply of uranium from Canada. I thought to myself that it was rather strange that we should have to go to the President of the United States to have an agreement to purchase uranium in Canada. Then we find that the United States has the first call upon virtually all the uranium produced in Canada. If that is so, that creates another difficulty in relation to depending entirely upon a main basic product which we have not in our own country.

It is true that uranium production and reserves are rapidly increasing. So, my Lords, are the demands. Recently, I saw a report—it was in the public Press—that the military demand for uranium has been established to be between 10,000 and 15,000 tons a year for the free world, a figure which may well be regarded as conservative. With all the nuclear power activity which is going on at the present time for military purposes, electricity, ship propulsion and other purposes, the demand for uranium must increase considerably. I read only yesterday that the Germans now have a locomotive to be driven by uranium, and the possibilities are that in the course of a very short time the demand for uranium will be excessive. The Minister will correct me if I am wrong, but I saw it reported that one single nuclear power station such as that which is built at Hunterston will require a recurring charge of uranium metal of 500 tons once every three years. If that one station requires 500 tons of this very valuable product, then the nineteen power stations under the programme will require anything from 8,000 to 10,000 tons—and uranium costs quite a lot of money. Sir Christopher Hinton, who, as we all know, is one of the foremost experts in the development of nuclear power, in a very interesting and instructive speech given at Stockholm a few weeks ago, dealt with costs of nuclear power and compared them with costs of power from conventional stations. He said that the fuel replacement charge uranium will cost £20,000 per metric ton. From inquiries I have made, I understand that that is the cost. If we have to buy something like 10,000 tons of uranium over the next five years at a cost of £20,000 per ton, my arithmetic will not allow me to calculate the total amount.

But it is not only uranium: there are many ancillary materials. There is graphite, of which large quantities must be used. Fortunately, we have, or at least we can produce, sufficient graphite in this country without importing it. But we have to import heavy water at a very high price. Unfortunately, the scheme which I understand was proposed with New Zealand has failed and we are importing from America the heavy water we require at something like twenty-eight dollars a pound. There is much to be said about the valuable fuel elements associated with uranium, the recovery of which is so important for future use—a matter which I know is well looked after by the Atomic Energy Authority.

Now, my Lords, as to costs. When the Minister gave us the programme, he said in reply to a question, that the cost of generating electricity in this way would be a little higher than the cost of generating from a conventional station. I understand that the cost will be about 10 per cent. higher between now, say, and 1960, when possibly it will become a little cheaper than the cost of power generated from our main modern conventional stations. But, again, how do we know? Uranium can increase in price like every other commodity, if there is a demand for it; and, of course, if we are subjected to restriction from another country matters are going to be rather difficult. I think that we should keep these points well in mind. If at the moment we can generate electricity from conventional stations more cheaply than we are likely to generate it from nuclear power stations, what a great tribute it is to the people who are in control of the Central Electricity Authority that, with the tremendous increase in the price of coal, they can, with their modern stations, do what they are doing.

I understand that the Central Electricity Authority will be called upon to play an important part in the development of the new programme of nuclear power generation. I can think of no better recommendation of them than their record of work during the past nine years. In a very difficult period, they have met almost all demands which have been made upon them for electrical power—and they have been many. Since the vesting date in 1948 the capacity of the generating plant has been doubled, electricity supplied to customers has increased by more than double, and thermal efficiency has increased from 20.9 per cent. in 1948 to 24.7 per cent. last year. Some of the newer stations obtain an efficiency of 31 per cent., and we are told that some of the stations now being designed are expected to produce an individual thermal efficiency of 35 per cent. The increase in thermal efficiency between 1948 and the present time has meant the saving of no less than 23 million tons of coal which would have cost nearly £80 million. These results were obtained when the lowest grade of coal was being used—coal which could not be sold to other customers. Looking at the price of electricity, with all the increases that have taken place during the last eight or nine years, one finds that the price from the generating station has, increased from 1.1d. per unit to 1.4d. per unit. With a record such as this, I trust that there will be no holding up of the building of the more modern conventional stations, because, as I have said, with all the advantages which we are advised we shall have as a result of the use of nuclear power, there are some disadvantages, and we should take into consideration the disadvantages as well as the advantages.

To carry through such a programme as that which we have before us must mean that the Government, with the Atomic Energy Authority and the Central Electricity Authority, have great confidence that these stations will give the results which have been advised by the experts. All this means that the two Authorities, with the Minister of Power, have an immensely challenging and difficult job ahead of them—particularly the Minister, for he has many problems to deal with. All the fuel industries—coal, electricity and gas—have heavy investment programmes, with which they are all proceeding and which are expected to be completed by 1965. The year 1965 is going to be a wonderful year, because everything is pointing to it.

In addition to those duties, the Minister has the responsibility of supervising the steel industry, which is no: an easy task, for at the present time I understand that the limiting factor in the expansion of all these industries is the supply of steel plate—that at a time when the steel industry of this country is producing more steel than ever before. Last year, to meet our steel requirements, we imported no less than £105 million worth of steel; yet it is said that the shipbuilding industry last year could have absorbed from 75,000 to 100,000 tons more steel plate. I do not know how the Minister is going to get on in regard to distributing the steel that becomes available. I hope that the coal industry is not going to suffer as a result.

On the labour side, a large increase in scientific and technical manpower will be required to complete the programmes. It is helpful to know that Sir John Cockcroft, in a speech made a few weeks ago, said that he did not think that there would be any difficulty in recruiting the technical manpower needed, for ordinary types of engineers could be used after three months' training in the atomic programme. There is no doubt that such work would be an inducement to many young men, for it offers much scope for the technical advance in the nuclear field. I trust that they will succeed.

My Lords, I am afraid that I have taken up too much of your time, but in conclusion I again say that Britain benefited greatly during the 18th and 19th centuries from having an abundant supply of cheap coal. To-day, she is suffering because she has almost no indigenous oil, and in the future lack of uranium may count very much against her. That suffering can be eased only by increasing our coal output. I am pleased that the final paragraph of the statement by the Minister of Power says that, however rapidly we develop nuclear energy, coal will remain the basis of our economy, and that the need to exploit to the full our national coal resources remains as urgent as ever.

Now that atomic power has arrived we must not abandon hope for a substantial recovery of the coal industry. But unfortunately there appears to be a popular misconception that coal does not matter any more. This fallacy affects not only some of the persons on top, who control policy; it is causing a number of men to refuse to enter the industry and others working in the industry to seek work in other industries, which is very easy to get. The British public is left with the impression that the present coal shortage is only temporary and will soon be taken care of when nuclear power stations come into full production. That is also a fallacy, for the truth is that coal should occupy in Britain's economy a position almost similar to that which it occupied in the period when coal built up Britain's industrial supremacy. A great endeavour should be made to regain that position, for Britain has the coal. King Coal should rule for more than another century or two. But output can be increased only by sinking more shafts, by further improving methods of mining, giving greater confidence to the miners and inducing others to take up the occupation of coal mining; and also by seeing that the miners have adequate facilities and that they receive from the nation the respect which persons employed in the most dangerous and unattractive industry deserve. I beg to move for Papers.