Lords Sitting of 10 July 1963

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Coventry

LORD HILL OF LUTON
The Right Honourable Charles Hill, having been created Baron Hill of Luton, of Harpenden in the County of Hertfordshire, for life—Was (in the usual manner) introduced.
The Lord Vesley—Sat first in Parliament after the death of his grandfather.

TAXATION ON EARNINGS FROM UNDESIRABLE MEMOIRS
2.45 p.m.
LORD FRANCIS-WILLIAMS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are now in a position to state what is the tax position regarding the substantial sums paid by some newspapers to prostitutes, adulterers, criminals and other notorious persons for their purported confessions; whether these payments are subject to tax as professional earnings, or whether the perpetrators of these dubious confessions are allowed to claim the rewards from them as casual profits and make fortunes by capitalising on their notoriety with the aid of such newspapers.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE): My Lords, sums paid by newspapers for purported confessions would normally give rise to liability to tax under Case If or Case VI of Schedule D. Case II of Schedule D covers taxation of professional earnings, including sums paid by a newspaper to professional authors or journalists for the publication of material written or dictated by them.
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Case VI covers the profits of anyone who is not a professional author or journalist, but who writes a single commissioned article or series of articles for the Press.
LORD FRANCIS-WILLIAMS: My Lords, I thank the noble Earl for his Answer. When he says "would normally", does this mean that there are abnormal circumstances in which this liability would not apply?
THE EARL OF DUNDEE: My Lords, there may be abnormal circumstances, but I do not think it would be a good thing to draw attention to methods by which taxation could be evaded.
LORD FRANCIS-WILLIAMS: My Lords, may I draw the noble Earl's attention to one of the more recent utterances of a lady who has been very much in the news recently, Miss "Mandy" Rice-Davies, who declared, "Just like Christine, I evade heavy tax now I am in the money", to which she added brightly, "I reckon I have negotiated about 'ten grand' to date, and that is only the start"?
THE EARL OF DUNDEE: My Lords, I have not noticed that, but I daresay someone from the Inland Revenue may have done so.
BARONESS SUMMERSKILL: My Lords, would the noble Earl be more specific? What will be the position with regard to these two ladies?
THE EARL OF DUNDEE: My Lords, I could not give any particular case. I have given the general position under Schedule D.

LONDON TRANSPORT BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
DOVER HARBOUR BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
BUSINESS OF THE HOUSE
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, it may be convenient if I now state that at a convenient moment after 3.30 there will be a statement on Scottish electricity.

TOWN AND COUNTRY PLANNING (MINERALS) REGULATIONS 1963
2.49 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS): My Lords, these Regulations are made by the Minister, with the consent of the Treasury, under the provisions of Sections 197 and 217 of the Town and Country Planning Act, 1962. The former section enables the Minister to adapt and' modify the provisions of the Act as may be appropriate for mineral working. The Regulations take the place of the Town and Country Planning (Minerals) Regulations, 1954. The Regulations of 1954 adapted the provision of planning legislation as it existed at that time to the circumstances of mineral working. Planning legislation has since been consolidated in the Town and Country Planning Act, 1962, which came into operation on April 1, 1963. This means in particular that the references to various statutory provisions in the complicated Regulations of 1954 are now out of date.
In view of this consolidation, and of the fact that some of the Regulations of 1954 relate to provisions of previous Acts which are now spent and have not been re-enacted in the Act of 1962, it is desirable to consolidate the remaining Regulations of 1954 by reproducing them in terms of the Act. This is the purpose of the Instrument which is now before the House for approval.
The operation of the provisions of the Regulations of 1954 not replaced is preserved for appropriate cases by the transitional provision of Schedule 14 to the Act, and that will be found in Regulation 2 of this Instrument. The Instrument does not make any changes of substance in the provisions of the Regulations of 1954 which it reproduces. The only new matter which is introduced is in Regulation 4(b) where slight modifications are applied to provisions first introduced into the old legislation by Part II of the Caravan Sites and Control of Development Act, 1960. The modifications are consequential on the modifications made in relation to enforcement notices in the regulations of 1954 and do not amount to changes of substance.
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The subject matter of the Regulations is complex. It was, however, fully considered by this House on December 16, 1954, when approval was given to the Regulations of that year. In these circumstances, it is perhaps unnecessary to trouble your Lordships with a detailed explanation of the, content of particular Regulations. When the Regulations are issued, however, they will be accompanied by a circular outlining the circumstances in which they have been made and giving explanatory notes on their contents. The present Instrument is not controversial and, in the opinion of the Special Orders Committee of your Lordships' House,
"can be passed without special attention".
Therefore, I hope that your Lordships will now approve these Regulations, and I apologise for their rather complicated nature and the necessity for mentioning so many different Acts during the course of my comments. I beg to move.
Moved, That the Town and Country Planning (Minerals) Regulations 1963 be approved.—(Lord Hastings.)
LORD SILKIN: My Lords, I do not intend to be in the least controversial about this matter. I am taking it from the noble Lord that this is purely a piece of consolidation and consequential on the changes in the law, and involves no change at all of substance in the contents of the Regulations. On that assurance, by all means let the Regulations go through.
LORD HASTINGS: That is quite correct.
On Question, Motion agreed to.

THE NUCLEAR ENERGY INDUSTRY AND THE C.E.G.B.
2.53 p.m.
LORD COLERAINE LORD COLERAINE rose to call attention to the development of the Nuclear Energy Industry in this country, with particular reference to the relationship between the United Kingdom Atomic Energy Authority and the Central Electricity Generating Board, and to urge Her Majesty's Government to set up a Committee of Inquiry to investigate and report upon the present arrangements and prospects of the Nuclear Energy Industry including the system of tendering, pricing

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and contracting; and to move for Papers. The noble Lord said: My Lords, on other occasions when I have spoken in debates on industrial questions in your Lordships' House I have sometimes had to declare a personal interest. That issue does not arise to-day; I have resigned from any directorships which had any bearing on the subject matter which we are to debate this afternoon, and I have disposed of such modest shareholding as I had. These decision were by no means easy for me to take, and perhaps your Lordships would allow me a word or two of personal explanation. There is something I should like to have on the record, not so much in fairness to myself, as in fairness to my late business associates.
It would be an overstatement if I said that I parted from these companies with the unanimous acclaim of my colleagues; I did not. My departure was resisted very strenuously. In particular, my noble friend—I suppose I must now call him "the noble Lord"—Lord Aldington used all the resources, and they are many, of an alert and vigorous mind to dissuade me from the course which I was taking. More than that, he has tried, for entirely understandable motives, to dissuade me from making the kind of speech which he fears I may make this afternoon. I say "he fears", because I have not discussed my speech with him. I do not think that the noble Lord, Lord Aldington, is doubtful of the truth of what I may be about to say; I think he is doubtful about the wisdom of my saying it, and doubtful of the propriety of my saying it. This is a matter which, in the last analysis, a man can decide only on his own conscience, not on that of someone else, however much he may value that person's judgment in the ordinary way.
These decisions have not been easy ones for me to make, but at least I have one consolation: I have been told that I am making history. A noble friend of mine observed to me the other day that I was the first man he had ever heard of who had resigned three directorships in order to make a speech in the House of Lords. I daresay that is true; I have no doubt it is very eccentric; but, at least, perhaps it may be taken as a kind of compliment to your Lordships' House.
When I say that I have now no interest in the nuclear energy industry that, of course, is true in only a strictly Parliamentary,
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even in a technical, sense. I am deeply interested; indeed I am passionately interested. I am interested in an organisation with which I have been associated from its inception six or seven years ago and in a technical and scientific staff whom I know well and respect; and I see this organisation and this staff in danger of destruction by a decision which I regard as arbitrary, irresponsible, unjust and completely without any rational explanation. My Lords, I am not an impartial witness, but I believe I am a truthful one, and I hope that your Lordships will find me a credible one.
When I put this Motion on the Paper originally I had not intended to devote very much of my speech to the negotiations between the Central Electricity Generating Board and the United Power Company. The termination of those negotiations was for me the occasion rather than the cause of my resignation. I was more interested in the whole field of nuclear policy and in the way in which, having observed it for some years, I believed it was being mishandled. But since I put down my Motion two things have influenced me to change my mind, so that to-day I shall devote rather more time than I had intended to the Wylfa negotiations and rather less time than I had intended to the general picture of the nuclear field, though I shall, of course, touch upon that.
These two things that made me change my mind were, first of all, a reply given by my right honourable friend the Minister of Power in another place to a supplementary question, a reply which I believed, and still believe, misled the House of Commons. When I say that, of course I do not mean that my right honourable friend deliberately deceived the House of Commons. Anyone who knows him would know it would be inconceivable that he should do any such thing. What I mean is that my right honourable friend misled the House of Commons because he himself was misled.
In the Commons Hansard of June 27, my right honourable friend, in reply to a Question directed to the rejection of the United Power Company's tender for the Wylfa power station, used these words [OFFICIAL REPORT, Commons, Vol. 679 (No. 135), col. 1628]:
"What I do not think unreasonable is that the Central Electricity Generating Board

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should have refused a tender which was not only high but which was for a design that it did not like."
First of all, I would ask your Lordships to consider those words, "for a design which it did not like". If those words mean anything, they must surely mean that the design submitted by the United Power Company for the Wylfa station was unacceptable, was bad in such a degree that it justified the tearing up of a letter of intent, I believe a quite unprecedented step, and the termination of what was thought to be a negotiation which had been entered into for valid reasons.
Let me tell your Lordships as succinctly and as briefly as I can what the course of events was. In December, 1961, the Chairman of the Central Electricity Generating Board, Sir Christopher Hinton, informed the United Power Company that he was prepared to negotiate an order for a single reactor power station at Wylfa in Anglesey. The reasons were these. The Chairman of the Board had in fact forced an amalgamation between two of the then existing five consortia. It had been represented to him that there was no chance of this amalgamation being effective and the two staffs linking forces and getting together unless there was some prospect of work. He saw the force of that argument. There were other considerations. The United Kingdom Atomic Energy Authority, as distinct from the Board, had a direct responsibility for two other power stations, one at Hunterston in Scotland and one at Tokai Mura in Japan, and they were extremely anxious that the United Power Company should take over the management and control of those two stations. This the United Power Company agreed to do. So that, too, was an element in the background of the negotiated contract, and I submit that they were indeed sufficiently valid reasons for the Board to abandon their usual practice of competitive tender and to negotiate or seek to negotiate an order with the United Power Company.
The agreement to negotiate was in December, 1961. In February, 1962, the first of 150 design meetings was held between the technical staff of the United Power Company and the technical staff of the the Generating Board. These meetings I think, were held during two or three mornings a week, over a period
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of months, at the headquarters of the Generating Board. Their conclusions were minuted by the Generating Board and their purpose was to get agreement on the design for the power station. At the end of eight or nine months every point had been agreed. When I say "every point had been agreed," I do not mean that every point had been accepted without argument. Indeed, there was throughout the whole of this long series of meetings a very tough technical argument, and I think it is fair to say that the Board's technical representatives had to be persuaded that the technical arguments put up to them by the United Power Company would hold water. There was one point in particular which caused difficulty, and that was the design of the charge-discharge machine in relation to the reactor. That is the machine which extracts and puts in the fuel elements into the reactor. But even that point was agreed.
In December, 1962, the design was submitted to the Generating Board with, of course, a price. I think in January—it might have been February—of this year the Generating Board issued a questionnaire to the United Power Company. I do not know to what extent your Lordships are familiar with the procedures here, but in the case of competitive tender a questionnaire is issued to the successful tenderer, or at any rate the most hopeful tenderer, and it is issued to no one else. The questionnaire was issued. It contained more than 2,000 questions, all of them technical, most of them on points of detail, some of them on points of principle. They were all answered and the Board expressed themselves satisfied with the answers.
In the light of that account, which I believe a factually true account, how can it be said that the design was unacceptable? The design had been approved over this long series of meetings, the questionnaire had gone out, the replies had come in, the replies had been approved. How could it be said that the design was unacceptable?
There is another side to this story. The Chairman of the Board, Sir Christopher Hinton, was presumably aware of what was going on. It was his staff that was involved. There was a series of meetings between him and the noble Lord, Lord Aldington, the chairman of the company, extending from

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January until June of this year. It was not until the meeting on May 24 that Sir Christopher Hinton gave any indication that the design was unsatisfactory, and it was only on May 24 that he said that it was unacceptable. In other words, the whole design had been in the hands of the Board for five months before the Chairman of the Board was able to say that it was unacceptable. I cannot myself believe that that is the explanation. I do not know what the explanation is. What I do know is, that during the month of May the engineering member of the Board, who had been responsible for these technical negotiations, was out of the country, 6,000 miles away in Japan; so that, whatever influenced. Sir Christopher Hinton's decision, it was not, I think it is fair to say, the influence of that member of the Board who had been most closely concerned with these negotiations.
My right honourable friend's answer dealt with price as well as with design, and of course it is impossible to separate the two—they go together. When one is considering price in relation to a nuclear power station there are all kinds of highly technical considerations to be borne in mind, which neither I nor, I dare say, my noble friend who is to reply to the debate, would be competent to argue. But I should like to offer two general considerations. The first is this. When Sir Christopher Hinton agreed to negotiate with the United Power Company an order for one reactor station at Wylfa he told that company that he was also going to agree—obviously, for other reasons, because the same reasons did not apply—to negotiate a second reactor with another consortium. I think that every engineer, any practical man, would know that if you have two main contractors working on contracts totalling perhaps £100 million on the same site in a remote part of the country, making double demand on scarce labour, double demand on the building of labour camps and so on, for that reason alone the price must be inflated. I am not a technician, but I should have thought that two contractors working on the same site in those circumstances would have increased the cost of both stations by a large sum, possibly £4, £5 or £6 per kilowatt. I do not know—I am not competent to
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judge—but certainly there must be a considerable increase.
The second general consideration that I should like to put to your Lordships and to my noble friend is this. When the first of these design meetings began in February, 1962, and probably for the next two months, the United Power Company did everything they could to persuade the Generating Board that the specification which the Board had put forward was uneconomic. As I understand, in the case of a nuclear reactor (I suppose the same is true of any power station) the cost of electricity depends greatly on the rating. The Board specified a rating of 500 megawatts for the reactor. The United Power Company insisted, or tried to insist, that nothing below 600 could be made to be economic. This argument was resisted by the Board. But, eight or ten months later, the Board had to admit that the argument was right, and the specification was raised to 600 megawatts. But by that time it was impossible, because of the time factor, for the U.P.C. design to be altered to go up to 600 megawatts. They were supposed to have been in on the site, first in March, and then in June. It was impossible for the U.P.C. design to be re-rated to give 600 megawatts, and the best that could be done was to raise it from 500 to 535. I submit that is a most important point when we are considering the price. It is important because the original specification entailed a high price, but the Board refused to change the specification until at length they saw the point. But by then it was too late, on the time scale which was envisaged, for the U.P.C. design.
I think I know in broad terms the argument that will be put forward on these points by my noble friend, because it is the argument which, at a late date, was pulled out of the drawer by the Generating Board and put to the United Power Company. The argument is that the Generating Board were persuaded to accept a design that they did not like because they were assured that they woud get a kind of bargain-basement reactor in consequence, or at any rate that they would get a cheap reactor—in other words, that it was a condition of the acceptance of the design that the price should be below some purely arbitrary figure. All I can say is that I do

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not accept that argument. I do not believe that there was any such condition. If there had been such a condition, it would surely have been in the minutes. There are thousands of them. I cannot say that I have read the minutes, because I cannot understand them; but I am told that there is no such condition anywhere in these voluminous minutes. If there had been such a condition, surely that would have been made known to the United Power Company by the Board. The engineering member of the Board and, I think, other members of the Board were in constant touch with the managing director of the United Power Company, and they never even mentioned such a condition. I do not believe that it was a condition; I I think that it was an afterthought. Of course the U.P.C. company maintained that their design was an economic one, in the context of a rating for the reactor that was uneconomic, and within the context of a time scale for construction that was very close. Of course they maintained that it was economic, and I still believe that it was economic; and it was, in fact, the best that could have been done by anyone in those circumstances.
My Lords, I said that there was another reason for my argument about Wylfa this afternoon. The announcement which was made yesterday, and which appeared in the Press this morning, said that the Generating Board were going to negotiate a contract for a 1,000-megawatt power station—that is, a two-reactor power station—at Wylfa with the English Electric Group. I think that I must give your Lordships some of the background of this, too. I think you will find it difficult to believe, but it is absolutely true.
At the same time as the United Power Company were arguing the case that 600 megawatts, not 500, was the economic rating for a single reactor, they were arguing another case. The technical staff of the United Power Company had come to the conclusion that, if in fact one contractor could build two reactors at Wylfa, the costs would come down quite dramatically. This was put to the Board. At first they disbelieved it, and then they were persuaded to allow the United Power Company to put in a tender and
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a design for a double-reactor power station of 1,000 megawatts. This was done. The original tender was put in in December, and a revised tender at a slightly higher rating was put in in March. I should say in passing that the English Electric Group were informed by the United Power Company of what the United Power Company were saying to the Board about the two-reactor station.
The design went in with a price, a price that was contractually binding; and it showed a price for the reactor which was certainly very close to the cost of electricity from conventional power, and I think almost certainly below that cost, and the Board were very interested. But Sir Christopher Hinton was not. Sir Christopher Hinton laughed it out of court. He said that it was not worth considering. So that was that. But it was not all that, because the announcement in the papers to-day about the 1,000-megawatt power station at Wylfa means that once again the argument of the United Power Company was sound; once again it was rejected; once again it was accepted, and once again it was accepted at the expense of the United Power Company. I do not want to use words that I would regret, but that does seem to me to be a dishonourable transaction.
There is another point about the announcement in the papers to-day which I imagine will not have escaped your Lordships' notice. That is its timing—not so much the timing of the announcement, as the timing of the decision. I have no doubt at all—at any rate, it seems to me highly probable—that this decision was come to in order to prejudge this debate; and I myself think that the fact it was come to in this way at this time is an affront to the House of Lords and an affront to Parliament. It may well be that the Board had already made up their mind on this in a general way. They knew that this debate was to take place. It seems to me quite incredible that in the light of that knowledge they should have taken that decision before there had been any chance for Ministers to hear the debate.
That brings me to my next point. I think that Parliament must consider very seriously the powers which are vested, almost accidentally, in the hands of some of these nationalised Boards and in the

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hands, in particular, of the Chairman if he has a forceful personality. The Central Electricity Generating Board are, I think, far and away the largest electricity supply organisation in the world, and therefore exert tremendous influence as a customer. I do not know to what extent your Lordships are familiar with the electricity supply industry, but perhaps I may put it this way. The private sector of the electricity supply industry is dealing, in effect, in single articles costing millions of pounds. The cost of a large generating set might be anything between £10 and fl 5 million. For that article there is only one customer in England. There is another, a much smaller one, in Scotland. At any rate, there is, effectively, only one customer. If that customer is offended, even the most powerful firms in this country are at his mercy. I do not believe that that is a healthy situation. I do not believe that any man should have that power. If he must have it, then he must, too, have very special qualities: he must be known to be of absolutely balanced judgment; he must be known to be absolutely fair-minded and impartial; he must be known to be able to listen courteously and reasonably to the arguments that are put to him. Above all, he must be known to be free of any trace of vindictiveness.
Sir Christopher Hinton has many outstanding virtues. He is a brilliant engineer. I daresay that he is the most brilliant engineer that we have in this country. He is a man of dominating personality. He is a man who thoroughly and completely knows his own mind, until he changes it. But I do not think that Sir Christopher Hinton's warmest admirers would attribute to him those particular qualities which I have ascribed to the ideal chairman of a nationalised Board with these immense powers in his hands. It is not unfair to say that even the biggest firms are cowed by the powers which are exercised by the Chairman and the Central Electricity Generating Board.
My Lords, it is not simply a question of the Board being rough, and perhaps quite naturally and sensibly rough, about orders: it extends far further than that. Sir Christopher Hinton, for good reasons or bad—and I think they may be very good; certainly, they can be defended—has conceived it as his duty to rationalise the electricity
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engineering industry. He forces amalgamations and then, as in the case of the United Power Company and Wylfa, disclaims all responsibility for what he has done. In one case I know of he compelled a big company to cancel its foreign licences. He exerts an economic dictatorship on a pretty wide scale. This may be justified, in the light of the greatly increased size of sets—though whether that is a wise policy is another matter. But it may be in that case that it is necessary to rationalise this industry. That, after all, was done in the case of the aircraft industry. I do not know whether or not it was wisely done, because I know nothing about it; but presumably it was done for good reasons. But there was a great difference there: it was done by the Government, as a result, I think, of the long deliberations of a Cabinet Committee. This is done by a single man, or, if you like, by the Board, who have no responsibility to anyone, except for that narrow shadowy responsibility which is owed to, or at any rate exacted by, my right honourable friend the Minister of Power.
Of course Sir Christopher Hinton would deny that he exercises this dictatorship; and in a sense he would be right. His method is more subtle, but not so much more subtle. What he says is: "It is not for me to dictate to your company what it should do. That is your responsibility, not mine. All I tell you is that unless this suggestion is adopted, your company is extremely unlikely to get an order from the Board."He has said that to me. My Lords, I believe that that is an abuse of power. Some would say that it is inseparable from the conception of a nationalised industry, where inevitably power is highly centralised. For myself I do not think so. I think it is a problem to which a nationalised industry must always be prone. It is something for which one should always be on the watch. But it is not necessary that a situation like that should exist in a nationalised industry.
I would ask your Lordships to compare the practice in these matters of the National Coal Board and of the Central Electricity Generating Board. Of course the National Coal Board does not provide an exact analogy, but it is, I think, a fair analogy, even if it is

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broad. The Chairman is a different man, with a different character, and a different policy, and a different organisation through which he works; and he is more successful. The amounts dealt in are not so great, but still they are substantial; and the Coal Board, just as much as the Generating Board, is a monopoly customer. What happens in the Coal Board, on its works contracts side, is this. The amount of money available to the areas and to the divisions is settled, I think, centrally; but once that has been done, each area, or each division, is able to order, within a fairly wide list of approved suppliers, from whom it likes. That means, in effect, that the monopoly customer in the case of the Coal Board has split himself up voluntarily, as it were, so that he is no longer a monopoly customer; and the supplier is able to deal with quite a large number of customers in the areas and in the divisions. I cannot help feeling that some inquiry should be made to see whether some modification of that set-up could be used in the case of the electricity supply industry, and even in the case of these very large generating stations. It would of course be expensive; it might be cumbersome, but I believe that it would be well worth paying the cost, in order to avoid the evils which I have described and which I believe to be very real evils.
My Lords, I should like for a few moments to turn your Lordships' minds back to the glad, confident morning of the nuclear energy industry five and ten years ago. Those were the days when it was thought that nuclear energy had given into our hands a key which would fling open wide the gates to a glorious future. It was said, and truly, that nuclear energy was the greatest advance in man's mastery over nature since the discovery of fire; and very great things were expected from it for the industry of this country, for the export trade, for the welfare of mankind in general. Now we have come to a rather bleak midday, and what is it that has happened? There have been many things.
Perhaps we were too optimistic; perhaps we were too rattled over Suez. Certainly the supplies of fossil fuels, coal and oil, have become more abundant. Certainly interest rates have gone up. But more important, I believe,
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than any of these external features, has been the policy of Her Majesty's Government. At the start they had a policy. It was pretty fluid; it was subject to constant variations. But I think that in time interest was lost and control was lost. I think that, at any rate until yesterday, there has been no policy. Now there is a policy, at least so far as the next reactor is concerned. I believe that there has been no policy, because the whole issue of nuclear energy for civil purposes has been allowed to drift in midstream, as it were, between the United Kingdom Atomic Energy Authority, on the one hand, and the Generating Board on the other. The United Kingdom Atomic Energy Authority has been unable to put forward any coherent programme because the Generating Board could veto it: the Generating Board could not put forward a coherent programme because they had no constitutional authority to do so, and their only interest in nuclear energy is, as it were, the fortuitous one that they are the largest potential customer.
The effect of this vacillation, this lack of policy, on the industrial consortia—I am not thinking now of the company with which I was associated, but of all the industrial consortia—has been absolutely catastrophic. They have never known from one day to the next, hardly, what they were expected to do; what the policy was over the next three or four years. They have had to rely upon rumours and hints. They were put at a tremendous disadvantage and a tremendous expense, and I have no doubt that a great many of the losses of which they complain have in fact been due to this lack of any clear-cut policy on the part of Her Majesty's Government. I should have thought that it was the duty of the Government, and in particular the duty of my right honourable friend the Minister of Power, to sort this thing out before now. I do not believe that my right honourable friend has in fact effectively controlled nuclear policy at all.
I should like to refer to a passage in the recently-published Report from the Select Committee on Nationalised Industries. It is on page 123, paragraph 393. The particular sentence to which I should like to draw your Lordships' attention is this:
"He"—

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that is, the witness for the Ministry of Power before the Select Committee—
"readily accepted the Board's figure of £20 million a year although it had never been specifically discussed with them".
Now, what was that figure of £20 million a year? It was the Generating Board's calculation of the additional cost of nuclear energy at the present time over conventional power from ordinary coal-fired or oil-fired stations, and the accuracy or otherwise of that figure must really be the basis of one's nuclear policy. If the figure is accurate, you say, "Well, can we afford to spend £20 million?" If it is too high, then you could say, "Perhaps we ought to go a little faster". If it is too low, then you pull in your horns.
Now this figure is in fact disputed. It is disputed by the United Kingdom Atomic Energy Authority. The Authority maintain that the life of a reactor may be expected to be 30 years; the Generating Board maintain that it should be 20 years. That figure of £20 million is calculated on the basis of twenty years; but, of course, if the Authority are right—and I should think they are at least as likely to be right as the Board are, probably more likely—then obviously the cost of the reactor, the cost of nuclear energy, is far, far lower than the Board maintain, because capital costs and interest rates are so enormous, so much a part of the production of electricity in an electricity station, that if the period of amortisation is extended for a period of one-third, costs come tumbling down. The same considerations apply to the life of the fuel element, on which there is a similar difference of opinion between the Authority and the Board. This figure of £20 million is surely absolutely vital, and yet the witness for the Ministry readily accepted it although it had never been discussed with the Board. That seems to me to be a terrible indictment of the Ministry of Power and, therefore, I am afraid, by constitutional usage, of my right honourable friend.
I must refer very briefly to the White Paper of 1955. Your Lordships may remember the general tenor of the White Paper of 1955: how it opened the vista of the enormous possibilities that lay ahead; how it explained that the Atomic Energy Authority would be responsible for research and pioneering, and how the
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Generating Board and the South of Scotland Electricity Board would put into service the stations developed by the U.K.A.E.A.; and how it made the very important, fundamental point that the thing could work only if there was the closest co-operation between the Authority and the Board. For many years there has been practically no co-operation between them. Your Lordships will find a reflection of that in the Select Committee's Report.
I think myself, if I am allowed to say so without any breach of privilege, that the Select Committee have not quite got the right end of the stick, because the Report rather implies that all the blame is on one side; that Sir Christopher Hinton was willing to co-operate but that the Authority was not. I do not myself think that that was the case, and the explanation may be (I am not sure of this) in another passage of the Report, where they say that they were unable to examine the U.K.A.E.A. on these matters because they had no authority to do so. I am not clear as to whether it was only the defence aspects they were unable to examine, or the whole aspect of the relationship between the Board and the Authority; but, be that as it may, co-operation, which was essential to a successful programme, has not been effective, and again I consider that the Minister of Power should have been alive to this and should have seen that there was co-operation. What has in fact been happening is that the Authority have made a proposal and the Board have imposed a veto.
There is the case of the A.G.R., the advanced gas-cooled reactor, which yesterday the Board announced they were going to order. How much more sensible it would have been if that anouncement had been made by the Board months ago! because in the meantime enormous harm has been done by the Board's attitude. The Chairman of the Board has been criticising the A.G.R. publicly. He has been explaining at great length that the usefulness of the Magnox reactor is coming to an end. He has been shopping around for some other system that can be manufactured under licence; in particular, a system called CANDU, which is a Canadian system, and the effect of this on the efforts of the industry to try to get exports has been quite catastrophic.

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It has been impossible to get interest in the export of these Magnox reactors when the Chairman of the Generating Board has been running them down. That is one element in the lack of co-operation between the two bodies.
I think the facts that the Government and the Minister have to face are these. We all recognise that nuclear energy is not something for the present; it is something for the future. In twenty or thirty years' time young men now entering industry will be in control of it in this country; and the kind of industry they will be controlling and the kind of oportunities they will have will depend very largely on what we do with nuclear energy to-day, and how quickly we advance the progress. Of course, the power stations which are building now, and which are becoming more efficient with each one built, are still in the stage of Stephenson's Rocket. What will be happening in twenty years' time, if we handle this right, is anybody's guess. There may be the most miraculous developments.
But if that is the background to Britain in the 1970's, is it really sensible to put the control of the long-term development of nuclear energy in the hands of the Generating Board, whose chief concern, whose only statutory concern, is the price of electricity to-day, on July 10, 1963. Surely that cannot be right; and I think that this point, too, is apparent in the Report of the Select Committee where they lay great stress on the fact that the Generating Board and Sir Christopher Hinton have to supply expensive electricity in order to meet the nuclear energy programme; and would it not be better if in some way the taxpayer made a direct subvention from this? I think it would be better; but I still believe the point I am trying to make is of value: that it is not sensible to base the whole industrial future of this country in twenty years' time on these narrow day-to-day considerations of the price of electricity to-day. I do not know what the answer is, but I think the question should be gone into and I think, if it were gone into, it would be found wrong for the Generating Board simply because it is a customer, to have a determining voice—because it has that to-day—in the future of the reactor programme.
My Lords, I am afraid that I have occupied far more of your Lordships' time than was either seemly or, I daresay, prudent; but I can only thank your Lordships very much for your patience and for the attention you have been good enough to pay to what I have been saying. I hope that I have said enough to convince the Government, and if not to do that, to persuade your Lordships that this is a matter which does demand further inquiry—the matter of the Wylfa negotiation; the matter of the whole system of tendering; and the matter of the future atomic programme in general. I think, as I recommend in my Motion, that a Committee of Inquiry should be set up. I think myself that it should be composed in part of scientists and technicians and in part of laymen. This whole subject is so bedevilled by the experts that unless we have both on the Committee nothing will happen. I believe that if it got to work and made its Report the outlook for nuclear energy and for British industry would be a great deal better than it is to-day. I beg to move for Papers.

MACKENZIE REPORT AND SCOTTISH ELECTRICITY PRODUCTION
3.55 p.m.
THE MARQUESS OF LOTHIAN: My Lords, with your Lordships' permission, and in the absence of my noble friend Lord Craigton, I should like to read a statement made in another place by my right honourable friend, the Secretary of State for Scotland, about the Report of the Mackenzie Committee. It is as follows:
"The Government have given very careful consideration to the findings of the Mackenzie Committee, including its central recommendation that the functions of the two Electricity Boards in Scotland should be transferred to a single new authority.
"In making this recommendation, the Committee's purpose, which must also be the Government's, was to ensure that the whole operation of generating, transmitting and distributing electricity in Scotland is carried out on the most economic basis possible, and that judgments on questions arising in this connection—for example as regards

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the size, character and location of new generating stations—are not influenced by narrower considerations arising out of the financial consequences to the separate accounts of one or other of the, existing Boards.
"It is however clear that the proposal to merge the two existing Boards is unwelcome to a wide range of interests, especially those who have benefited by the immensely valuable work that the North of Scotland Hydro-Electric Board have carried out in the last twenty years. For my part I do not think it has yet been established that the continued existence of the two Boards is incompatible with the provision of electricity in the most economic manner, and I intend to see what can be achieved by close consultations and co-operation between the two Boards.
"I have myself talked the position over with the Chairmen of the two Boards, and have arranged that they will jointly discuss with me or my officers any issues that may arise between them. In the expectation that the common purpose of the Mackenzie Committee and of the Government can by this means be secured, the Government have decided not to proceed at the present time with the legislation that would be necessary to implement the Commitee's recommendation on this aspect of the matter.
"A particular subject on which discussions with the two Boards are proceeding is the comparative cost of providing electricity, on the one hand by the proposed hydro-electric generating schemes that the North of Scotland Board have published and, on the other hand, by the installation of additional thermal generating capacity elsewhere in Scotland. In the light of the comparative costs thus established, the North of Scotland Board will decide whether they wish the necessary formal inquiries to be undertaken into the hydro-electric schemes; and the comparative costs will be part of the material placed before any inquiries that proceed.
"I have one further point to add. A subordinate recommendation by the Mackenzie Committee was that special assistance should be provided to en-
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able rural electrification in the North of Scotland to be speeded up, and to link the islands with the mainland by submarine cable. The North of Scotland Board consider that most of these cables will be needed only when the existing diesel generating stations on the main islands have to be renewed, but have drawn up a programme for accelerating the present rate at which consumers in the more remote areas can be given supplies. This programme involves capital expenditure that would increase the loss the Board incur at present on similar connections. The Board's future capital investment proposals are now under consideration as are those of the remainder of the Electricity Board throughout the country; and a decision will be taken as soon as possible."
My Lords, That is the statement.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I am sorry to see that to-day I have not a Scottish Peer on this side of the House who would be able to make a better comment than I on the statement which has just been made by the noble Marquess. I am much obliged to him for having made it. I am relieved to think that at the moment the Government are not persuaded that the recommendation of the Mackenzie Committee for the amalgamation of these two Boards has been soundly proved. I have heard that considerable doubts have been expressed about this by many people in Scotland, especially in the North of Scotland, and particularly those who have followed with interest the great success of the Hydro Electric Board over the last twenty-odd years. I gather that no legislation is proposed at present. Therefore we shall have another opportunity of looking at this later on. In the meantime, perhaps the noble Marquess will expect me to consult my Scottish friends as to the interim arrangements which have to be made and, if necessary, we can communicate with the Minister about it.
THE MARQUESS OF LOTHIAN: My Lords, I am much obliged to the noble Earl.
VISCOUNT STUART OF FINDHORN: My Lords, having had an interest in this matter for a considerable number of years, and knowing the feelings and

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wishes of the North pretty well, I should like to say that the statement to which we have just listened is a most important one and I am very grateful to my noble friend for having made it. I am glad indeed to learn that no legislation is contemplated at the present moment. I welcome the suggestion that an inquiry should be held as to the costs of producing electrical current or power by the various means available to-day. All I would ask my noble friend is to say to the present holder of the office of Secretary of State for Scotland that I hope he will never forget that the object of the North of Scotland Board was to provide electrical power for those living in the North and in the far-flung parts of this country, and that, until that has been more or less completed, it was never the intention, to the best of my knowledge and belief, to amalgamate or abolish the North of Scotland Hydro-Electric Board.
BARONESS HORSBRUGH: My Lords, may I add that there has been a great anxiety in Scotland, not only in the North, but also in the South, at the thought that the North was not getting a fair deal? We are very glad indeed to hear the statement that has been made this afternoon.

THE NUCLEAR ENERGY INDUSTRY AND THE C.E.G.B.
4.4 p.m.
Debate resumed.
LORD STONHAM: My Lords, your Lordships have listened for nearly seventy minutes in complete silence and with the closest attention to one of the greatest speeches I have listened to on domestic matters. I believe that it was as painful to deliver as it was to listen to. None of your Lordships, irrespective of Party, who has heard the noble Lord, Lord Coleraine, could have the slightest doubt that every definite statement he made was to him a statement of fact. Indeed, many of his statements are beyond dispute. And if these facts cannot be disputed, then no one can be in any doubt that the noble Lord was absolutely right in thinking that our electricity undertakings are likely to be destroyed because of a decision which is arbitrary, unjust, irrespon-
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sible and completely without logical foundation.
If we have listened to what in a large measure was an accurate account, no one can dispute that the reply given by the right honourable gentleman the Minister of Power in another place arose from the fact that he was misled. No one, after a letter of intent had been received, after no fewer than 151 different production meetings between representatives of the U.P.C. and the Board and after listening to the account of the meetings between Sir Christopher Hinton and the noble Lord, Lord Aldington, between January and June, the announcement on May 24 and the further statement this morning, could dispute that the description of the noble Lord, Lord Coleraine, of these as dishonourable methods is an accurate one.
The noble Lord described these events as an abuse of power, and, indeed, if the account we have listened to is accurate, then it most certainly is an abuse of power What we have heard this afternoon is a national scandal that must be put right. I would say that it would be quite impossible, with the best will in the world, for the noble Lord, Lord Carrington, to answer completely all the points that have been made. I would go further and say that it was impossible, in a debate of this kind, properly to arrive at all the facts. It is for that reason that we, and I hope all Members of your Lordships' House, will support the demand made by the noble Lord, Lord Coleraine, in his Motion for a full inquiry.
I have not the knowledge to comment on the individual points with regard to the negotiations on the construction of the Wylfa Station. I say only that the noble Lord's speech was remarkable in a Parliamentary sense. He spoke for seventy minutes on a detailed and complicated subject, not only concisely but consecutively and virtually without notes. For that alone he deserves our grateful thanks. But I think that the country is indebted to him, not only for the facts that he has revealed, but also because, in my view, the prosperity of the nation rests in large measure both on the Government's answer to these points and on the steps they take to remedy the obvious and major faults in our power policy which have been exposed, not

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only by the noble Lord this afternoon, but also by the Select Committee.
I feel that the most important of the noble Lord's revelations is the evidence that the Chairman of the Central Electricity Generating Board has misused or misinterpreted his powers and that the Minister of Power has failed to use his. This is painfully apparent from the Report on the electricity industry by the Select Committee on Nationalised Industries. As the noble Lord has said, it was agreed in 1955, and according to the Select Committee it is still agreed, that we should need all the current which can be supplied by the nuclear power stations. The noble Lord said that we are in the Stephenson's Rocket age, and that in twenty or thirty years' time the situation will be very different. But at the moment this form of power, though much cheaper than it was, is still costing more than the power from conventional plant, although it is hoped that it will become competitive after 1968.
Meanwhile, the C.E.G.B. are charged with the statutory duty of producing electricity as cheaply and efficiently as possible, and reconciling revenue with outgoings. The Generating Board and the Electricity Authority are thus forced, outside their remit, to compel consumers of electricity to pay extra costs arising from nuclear production which, surely, in equity, should be paid out of taxes, at least at present. I do not say that this is necessarily wrong, but the obvious by-product of it most certainly is—and I am referring to the apparent usurpation by Sir Christopher Hinton of the direction of national policy, which is the sole prerogative of Parliament. As we have heard, Sir Christopher reduced these five consortia to three by shot-gun marriages. Firms were bluntly told, "You will do as I say if you want orders, and if you do not you will not get the orders".
As the noble Lord said, we had something similar in the aircraft industry a few years ago; but what was done there was directly negotiated by the responsible Minister and fully discussed in Parliament. In the present case, it would appear that the Minister of Power has stood idly by and allowed his job to be done by another. Planning for a national industry can be on only a national scale, taking all relevant factors into consideration. It is disastrous when a strong-
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willed chairman of a public national undertaking is allowed to act as a dictator in pursuing a narrow interest, and thus becomes a one-man interpreter of overall national policy.
We have only heard, so far, of the big companies, the great consortia, and the effect on them. But it is not only the effect on companies; it is the effect on everyone employed, and the towns where they work; it affects the whole country. Consider, for example, the case of Richardsons, of Hartlepools, one of the smaller of the firms in the U.P.C. consortium. They were told that they would get a share of nuclear power station contracts only if they joined the U.P.C. consortium. So they did. They spent £2½ million on modernising their factory. Now they are told that they are not to share in the Wylfa contract, because the U.P.C. have not got the Wylfa contract. Commander Kerans is the honourable Member for Hartlepools. He saw me yesterday and told me (I have the authority to quote what he said) just what this means to this firm and to his constituents. The loss of their expected £9 million share of the Wylfa contract means that, out of a total staff of 2,500 men, 1,000 are likely to become redundant by next spring. Of these, 110 are the design staff team, who, once they are broken up, cannot be got together again. Most of the others are skilled men. Unemployment in Hartlepools is already at the depression level of 9·2 per cent. With this new blow, and the addition of school-leavers at the end of the month, it could reach the frightening figure of 16 per cent. wholly unemployed.
This is an area which had its hopes raised by the heartening presence of the noble Viscount, Lord Hailsham, and his encouraging forecasts. Are they to be plunged into despair?—because it becomes a moral issue if, through lack of Government control, these people find that they have again been deceived. Small wonder that a few weeks ago 1,700 of them marched through the streets of Hartlepools in protest! It is idle to suggest that these skilled men can, and must, find jobs elsewhere. If they go, it downgrades industry in the area; it destroys the hopes and future prospects of the whole area. The promises which the noble Viscount (now, I am glad to see, in his place) to build roads and modern

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schools become a mockery if there are no jobs for the skilled men. That is why I say that contracts like this cannot be decided by one man speaking alone and in secret. They are part of a national plan and should be decided at Cabinet level, bearing in mind the whole picture.
The noble Lord, Lord Coleraine, gave an account of the qualities that a chairman of a national Board should have; and I agree that in such a position a man must have very high qualities. But I submit that no man can possibly be found having all those qualities and exercising correctly all the judgments that must be exercised in a matter of this kind. When they impinge on national policy they are matters for the Government. I can understand why, with an eye on costs, Sir Christopher wanted to reduce the plan from one nuclear station a year to one every two or three years. But this was not the way to go about it. Nuclear policy, as the noble Lord said, must be decided by the Government, and it is their duty to deal with the extra costs that must arise without distorting the power policy and without creating additional unemployment in badly hit areas.
The position, in the industry now, as the noble Lord, Lord Coleraine, said, is a shambles, and the companies concerned with building nuclear reactors for electricity production have lost millions of pounds. They took a long view, and they hoped to recover their losses in the years ahead. But, apart from what has been announced to-day—and the position about that does not seem very clear—the present programme will be completed by 1968. Naturally, they are asking themselves: Is this another version of the groundnuts scheme? I would submit that the Government must intervene urgently and make new arrangements which recognise that an apportionment of cost to the consumer has an important bearing on the attitude of the Central Electricity Generating Board to future nuclear stations, and then settle and announce their future programme, which must be related to need and to the capacity of the consortia which they themselves have created. I think the Minister should also review the remit of the Board and the Authority to ensure that it is fair and realistic, and then take steps to see that it is not exceeded in
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matters which affect employment in, and location of, other industries.
This disease seems to spread. For example, Professor Edwards, Chairman of the Electricity Council, speaking on March 7 this year, after setting out very fairly the problems of a monopoly buyer dealing with British firms, and indicating that preference should be given to home manufacturers, said that it was for those who run nationalised industries to judge this question. With respect, I disagree. It is the job of the head of a nationalised industry to run his industry, but when his actions are likely to impinge on public policy in other directions, it is a matter for the Government.
The noble Lord, Lord Coleraine, referred to my noble friend Lord Roberts who, he said, rightly does not conduct the affairs of the Coal Board in a way which usurps the functions of Parliament. That is clear proof that this is not inherent in the conduct of a nationalised industry. It depends on the chairman of a particular Board, and on the guidance he receives from the Minister to whom he is responsible.
VISCOUNT STUART OF FINDHORN: My Lords, would the noble Lord go so far as to say that the tendency of a nationalised industry is to centralise power too much?
LORD STONHAM: My Lords, the name, "nationalised industry" almost means that it is an industry covering the whole nation in its particular field. Power, therefore, must obviously be centralised; in fact, that is the basic justification for it. What I am saying, however, is that when that power is used, as it were, outwith the particular terms of reference in such a way as to affect the national policy as a whole, then it is outside the terms of reference of the industry and is a matter entirely for the Government and for Parliament.
I think, too, that it is imperative that the Cabinet should bring to an end these unseemly dissensions between the Atomic Energy Authority and the Generating Board which emerge so clearly from the Select Committee's Report. Imagine a senior scientific organisation playing such juvenile tricks as refusing to show its papers on a costly prototype to the Board, who are its main potential user. The trouble is that it seems unlikely that

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the present parties will resolve their differences themselves. We on these Benches, therefore, strongly support the proposal of the noble Lord, Lord Coleraine, for a Committee of Inquiry to investigate and report on all these matters. We need impartial, objective, investigation, followed by ministerial decisions to which both Authority and Board must adhere.
As the Select Committee point out, very large sums of public money are at stake. It would be scandalous if such a state of affairs were allowed to continue: because it is not only the money, but the supply of electric power which is at stake; and that is already causing acute concern. In my view, the C.E.G.B. and the supply authority have placed the whole N.E.D.C. programme in jeopardy—the programme for an annual 4 per cent. production increase—because this target cannot be achieved unless we have the electric power; and we shall certainly not have the power unless the Government make drastic changes in the conventional plant construction programme, quite apart from what they do about atomic power.
Last year new plant construction totalled 2,750 megawatts. It is planned to run at or below that level for the next three years, and the construction programme does not jump to 4,500 megawatts until 1966. That is the year when, "Neddy" tells us, the gross domestic national product is to reach £32,000 million. The important thing, however, is that the present planned programme is a year behind the actual demand for power, and new construction is not even keeping pace with the increased level of demand. Last winter—on January 22 of this year—the demand for electricity rose to 32,000 megawatts, and the maximum load that could be carried was less than 30,000. So we suffered load-shedding and blackouts. New plant coming into use this year will enable us only to satisfy last year's maximum demand but, meanwhile, demand for electricity has increased this year by 12 per cent. In other words, in the first five months of this year we sent out 66,500 million kilowatt-hours against less than 60,000 million last year—a 12 per cent. increase. This means that if conditions are the same next winter, then the blackouts and load shedding will be even more
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serious. It is obvious that the Minister of Health thinks so, because he has instructed all hospitals to make sure of emergency arrangements for the winter. We have been used to the idea of the electricity industry doubling itself within ten years, but if demand continues to increase, as it is now, at the rate of 12 per cent., it means that it will double itself in six years.
The Select Committee squarely places the blame for this state of affairs—that is, the short supply—on the C.E.G.B. and the Electricity Council. They rightly accuse them of building up peaks which they were unable to meet. They also point out that, although for years demand tended to outstrip forecasts, the industry did not find out about the changing character of demand until it was too late. In paragraph 307 they make this stinging remark:
"… that security is the first requirement of a system of electricity supply and that any system which leads to a series of breakdowns is open to serious criticism."
One does not usually have from a Select Committee a more stinging condemnation than that. I take an even more emphatic view. I believe that the Board and the Council gambled on a succession of mild winters, and that there would have been no trouble if the construction programme had been geared to their own demand forecasts. But they kept it below estimated peak demand and, as usual, the public had to pay for the mistake. And they will go on paying for the next five or six years.
All this is not the fault of the Board—and I think this was a point made by the noble Lord, Lord Coleraine. On several occasions, on financial grounds, the Board's forward plans have been substantially cut by the Government. It is true that the last cut was in 1958, but the 1958 construction is only now, five years later, coming into use. We are still suffering from those financial cuts. We on these Benches have repeatedly pointed out the disastrous consequences of the "Stop and Go" policy, and the Government must accept their share of the blame. In an industry of this kind we need, at the very least, planning five years ahead—I think considerably more—and the plans must be geared to anticipate the demand. Once the plan is made, it must not be arbitrarily interfered with. We also need improved contractual

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arrangements, because it is not only in the nuclear power section that we need an improvement in the system of tendering, pricing and contracting.
Sir Christopher Hinton believes that competition stimulates efficiency and technical progress. I have no doubt that it does, under free commercial conditions. But it is very different when the sole buyer is free from competition, and exercising monopoly buying powers in a field such as large turbo-generators, where the normal conditions of competition cannot exist in the home market. For some years the Board have wielded the threat, "We will be buying from Canada", or, at every meeting with high executives, "We shall be buying from Europe". One result of that kind of monopoly pressure (I see the noble Lord, Lord Carrington, looking at me in an inquiring way) is that it is actually true to-day that turbo-generators are selling in Britain at a price 20 per cent. lower than they are in Japan. You may say immediately, "That shows the success of the policy". But at what cost? The Select Committee make clear the cost of that success. They point out that the net income in the electrical engineering industry is the lowest among the major industries they reviewed, and is not sufficient to enable manufacturers to pay for essential research.
Nor, my Lords, is the industry earning enough to enable it to attract fresh capital on the market. It is neither clever nor successful to put your suppliers in such a position that they cannot finance the expanded programmes on which the nation depends. Only four firms can construct the 500 megawatt turbo alternators. Not only have they the capacity to supply the 1966–67 requirements but to-day they are working at only 60 per cent. capacity, so they could greatly increase output very much earlier. They should be given the work, and given, too, the new negotiating machinery recommended by the Select Committee so as to ensure a better working relationship with the Board and fairer prices. These prices should take into account the capital employed and the return necessary to service it and also to finance research, because—and this point is often overlooked—none of these large plants is standard. Every single one is a prototype because of the sudden changes which are made.
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The Select Committee recommends an independent arbitrator with power to inquire into these relationships and with power to approve pricing, tendering and placing of contracts. This may well be the best solution, and I hope that the noble Lord, Lord Carrington, will be able to tell us, when he comes to wind up, that the Government accept this recommendation and will implement it as quickly as possible.
It may be within the recollection of your Lordships that within the last twelve months I have on three separate occasions drawn attention to the dangerous situation which has arisen in the electricity supply industry. On each occasion my suggestions, now confirmed by the Select Committee, have been ignored. To-day the demand for action comes from both sides of your Lordships' House, and I would say that if the Government do not act now it will be proof that in yet another major field they have ceased to govern.
4.32 p.m.
LORD ALDINGTON: My Lords, I have had many doubts whether or not I ought to take part in this debate, for I am, as my noble friend Lord Coleraine told your Lordships, the Chairman of the United Power Company, which is one of the nuclear energy consortium companies and the one from which he thought it right to resign. I must, therefore, declare to your Lordships right at the outset this special interest in what I have to say. I also had it in mind that in the circumstances of the offer which was made by this company for Wylfaand I should like to say that even yet not all the circumstances have been made public—I have been anxious that I should not do anything behind the backs, as it were, of the Central Electricity Generating Board, either through Parliament or through Ministers, which might influence, or appear to influence, their commercial judgment. To have done that would, in my opinion, have been bad and wrong and it would have been quite contrary to the philosophy about nationalised industries which I tried to encourage others to share during the years 1957 to 1961 while I was Chairman of the Select Committee on Nationalised Industries in another place; a philosophy which I think shines out from the most recent Report of that Committee, which has

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been referred to and on which I should like to congratulate my old colleagues.
The situation I am in, as your Lordships may have thought to yourselves, has a certain irony, but I do not share my noble friend's view on all these points. I do not share his view attacking the date of the announcement of the decision of the C.E.G.B. The nationalised industries boards should be allowed to take these decisions and announce them free of interference from others. If national interests are involved then they may have to come in later. I must admit, therefore, to your Lordships what my noble friend Lord Coleraine has already said to you: that I greatly regretted not only that he thought it right to resign as one of my colleagues in industry but that he thought it right to start a debate here which, apparently, might refer to this particular company's affairs. But, of course, I knew him well, and his high standards; I respect, too, the high purpose which he has always had in mind; and I know that he did not do what he has done without a very careful searching out of where his duty lay. Having heard him, I must join with the noble Lord opposite in congratulating him on a masterly performance in your Lordships' House. I do not think I have ever heard anyone else speak for so long, so concisely, so lucidly, and with barely a glance at his notes on such a complicated matter. I should like to pay my tribute to him.
I should think it wrong for me either to adopt or to reject here to-day any of the arguments which he put before you, or the history as he announced it to your Lordships, for I think that this is not the right place, at this juncture, to argue the details of this dispute. And, frankly, I must say this to the noble Lord opposite, with some humility, too: that I really do not think it is right for us here to attack the character of Sir Christopher Hinton or to impute to him the dishonour (which was the word used) without hearing his side of the case. I think we have to be careful here. We know one side; I think my noble friend knows it, and I know it; and I would not ask your Lordships to pass judgment on that man or any man without having heard his side.
There is one particular point which is important and to which my noble friend made reference. He referred to the statement by my right honourable friend the
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Minister of Power in another place on June 27, and in that statement reference was made to the cost or the price of the tender, and the implication of what was said is that the price put in by my company was high. I want to say this one thing to your Lordships with, I hope, a full sense of responsibility. It is quite simple. If like is compared with like, but maybe only, the price of the United Power Company's offer was both quite substantially lower than the price of previous stations, as it should have been, as it followed them by some years, and it was not, if like is compared to like, more costly than English Electric's. My noble friend can call for the figure if he likes, and I must say to him that it is most damaging to the reputation of British industry to spread a false idea that we are a high-cost people. It does no good to our exports; and I must say that one of our export customers is in this country at the moment reading these statements. I feel it necessary to say that to your Lordships with a full sense of responsibility.
The last thing I want to say about these Wylfa negotiations is just this. The decision has been announced and I am, of course, free—and I am obliged—to take the action that after full consultation I am advised is justified. The facts have been fully set out in a letter which I myself wrote to Sir Christopher Hinton on June 25, and he has not thought fit to challenge the facts set out in that letter. I am, of course, responsible for the careers of many first-class scientists, engineers, technicians and administrators and I have no intention of leaving things as they now stand. All the things which the noble Lord, Lord Stonham, said about the responsibilities of those in charge of industrial decisions like this for work-people and highly-skilled scientists are very present in my mind and I do not think noble Lords opposite will accuse me of neglecting them. The nation, of course, has an interest in ensuring that what I might call monopoly State buyers have good and sensible relations with private industry and that they use acceptable standards in conducting negotiations. But I do not think that a debate in your Lordships' House at this time is the right occasion on which to rehearse what has happened. I am quite prepared at the appropriate time to see full publication of the facts of this case.

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But I now come back—having told your Lordships that I was doubtful whether I should take part in the debate at all—to say why I have eventually decided that I ought to, and that is because there are very important considerations about nuclear energy policy which greatly affect the national interest and which in my opinion need emphasising to-day. Not only is it quite probable that those of us who are engaged in the nuclear energy industry will be able to offer some useful contribution to such a discussion, but, indeed, in thinking about it all—and I have been very worried about this matter for many months now—I have come to the conclusion that I should be failing in my duty here if I did not join in the debate.
Chief among these important considerations, one I believe at the very basis of my noble friend's Motion, is the simple question: how competitive is nuclear energy with conventional forms of energy, each in the form of electric power, and how competitive will it be in the future? Or, put another way, are the high hopes of the future of nuclear energy that we all held in the earlier years, 1952 to 1957, being proved to be false? There are some people who think like that. I am not one. We are not, I think, going to reach very sensible conclusions about all the points that have been made by the two noble Lords who have already spoken unless we are clear about the answer to this question. Indeed, I would think the fact that the two public authorities, the C.E.G.B. and the Atomic Energy Authority, would give a somewhat different answer to that question is the main explanation for the situation described in the latest report of the Select Committee on Nationalised Industries and for the Committee's anxiety about the relationship of these two bodies.
The comparison of the costs of nuclear power and conventional power is bound to be an intricate and detailed problem, but is fundamental to the subject, and so I hope your Lordships will be patient with me whilst I analyse the figures and I hope your Lordships will tolerate a bit of statistical jargon. The most recent authoritative figures comparing the costs of electricity generation from nuclear plant and conventional plant are set out on page 120 of the Select Committee's
1412
Report. The latest nuclear power station covered by these figures is, I understand, Sizewell. It was designed and tendered for in 1960. Since then the Oldbury station has been started and two designs have been submitted for the Wylfa station. On the basis of the figures given here for the latest station, electricity produced from nuclear power plant commissioned in 1965–66 will cost 0·16d. per unit more than electricity produced from conventional plants newly commissioned that year.
It is my serious submission to your Lordships that the methods used for making the calculation of the cost of nuclear power are wrong, and that the basis of comparison of those costs with conventional power costs is also wrong. That is two things: the methods of calculation are wrong and the basis of comparison is wrong. Nuclear energy, as a result, is being wrongly undervalued and underrated, and I want to tell your Lordships why and how. The calculations behind the costs of power from conventional plant are based on long experiences, and I do not intend to analyse them except to note that the period of depreciation is 30 years and the load factor assumed at 75 per cent. The costs of generation from nuclear plant, on the other hand, are calculated according to what are known as ground rules—that is part of the jargon of the industry—rules that were devised eight years ago and are now far too pessimistic, taking account of experience since.
There are two basic elements in these rules, load factor and depreciation period. It is assumed that the load factor of nuclear plant would be exactly the same as that of conventional plant—75 per cent. That is assumed although the costs of fuelling conventional plant are so substantially higher than the costs of fuelling nuclear plant that there can be absolutely no doubt that nuclear plant will always claim the base load. The Authority (I think this is common knowledge) and I certainly consider that a load factor of 85 per cent. seems reasonable, and this makes a lot of difference.
Not only does it seem reasonable, but the fact is that those who have been designing nuclear stations recently have been designing them to have a factor of availability of at least 85 per cent. And we have also been told that the plant at

1413
Calder Hall and Chapelcross has been available for over 90 per cent. and during last winter the Berkeley station was available for 99 per cent. So what is happening is that not sufficient account is being taken of proved technical progress or, indeed, of design requirements. An increase of 10 per cent. in the load factor used for this calculation—that is, from 75 por cent. to 85 per cent.—would in fact reduce the cost per unit sent out by 0·05d. I will do the addition a little later on.
The second element, the depreciation period, is also much too pessimistic. A 20 years' period is laid down for nuclear plants against 30 years for conventional. This was possibly right in 1955 but is not justified to-day, and seriously falsifies the cost of nuclear power. A life of 25 years is not at all on the optimistic side. But much must depend on the design, and what I want to emphasise to your Lordships is that it was part of the instructions for Wylfa that the reactor should be designed for a life of 30 years, and the design, of course, cost more for that reason. For that station, therefore, and for others in which that life is required, or has been required, the calculation should be made on the basis of depreciation over 30 years, and not 20. If not, we are getting the worst of both worlds—that is, higher capital costs and shorter depreciation period. For the sake of my argument here, if we take 25 years life, and not 30, the cost of nuclear power would be cut by a further 0·04d. in 1965–66, which would get the gap down from 0·16d. to 0·07d.
There is a third element which relates to the cost, and that is the life of the fuel. I will take first the life of the fuel, and that is referred to in the Blue Book which the noble Lord has in front of him, the Select Committee's Report, at paragraph 384. It is assumed at the moment to be a life of 3,000 megawatt days per tonne. If that fuel life increases as the Authority expects, there will be further savings in costs. If, for example, the increase were to be to 4,000 megawatt days per tonne there would be a saving of about 0·03d. per unit. And, on ton of that, from what is shown in the Select Committee's Report at paragraphs 388–9, about the price of uranium ore, there should bps a further reduction of 0·04d. These figures together close the gap and will make the cost of nuclear power comparable
1414
with the cost of conventional power.
There is a fourth important consideration that affects the cost of nuclear power, and that is the rate of interest. I have no quarrel at all with the rate of interest included in the present rules and calculations, but I think we must avoid being frightened of the capital cost of basic industries if we are to achieve sound growth in the economy of Britain.
LORD SHACKLETON: My Lords, may I interrupt the noble Lord? I take it he is talking entirely about development of the Magnox reactor?
LORD ALDINGTON: I am sorry if I did not make it clear. I am talking about the Magnox reactor; I am taking the figures on page 120 in that Report and saying that in 1965–66, on the basis of those figures and the ground rules I have put to your Lordships, nuclear power will be competitive with conventional power.
LORD HAWKE: My Lords, may I ask the noble Lord a question on one point? Has he taken into account the perpetual question of currency?—because that would come out still more in favour of atomic energy.
LORD ALDINGTON: My Lords, I am most grateful to my noble friend. This is a point I make, but I usually make it abroad on other countries' currencies and not about the pound sterling. It is, however, a good point and one that we should certainly bear in mind about British stations generally. It should be much more acceptable to overseas countries than they have so far thought. They are apt to like things that cost less. But there is that factor about inflation which makes it wise to spend a lot early on the capital and have low running costs.
I want now to come to the basis of comparison, which is also important, between the cost of generation from nuclear plant and that of generation from conventional plant. The chief element in the cost of generation from nuclear plant is the capital cost of the plant itself. As my noble friend has said, these capital costs are normally expressed in so many pounds per killowatt sent out, and in the table for 1965–66 we can see the capital cost for nuclear stations.

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That appears at page 120 of this Report. I want to emphasise that these are the capital costs of one station a year, on an average, each of a different design. They are the capital cost, therefore, of the only station of a particular design. Included, therefore, in those capital costs are the full, substantial overheads of the consortium companies, even including the design costs, the pay of the scientists, the technologists, draughtsmen and so on.
But the element in design does not stop there: it goes leaping on through the sub-contractors; for a large part of the plant required for a nuclear station, and even for some of the conventional plant, has to be specially designed, and so sub-contractors' costs are inflated, too. All the designs in the nuclear programme prior to the recent Wylfa offer for one reactor were designs for twin reactor stations. To that extent, therefore, the design costs were spread over two units. I think it is quite obvious that the more reactors of a particular design that are ordered the more widely spread the design costs will be and the lower the price of electricity produced. It may not however, be so well known how great is the order of magnitude of the saving in capital costs per kilowatt that results from ordering more than one unit of any design. I will just give some figures. If one reactor of a particular new design could be offered at a cost of £105 per kilowatt, the capital cost per kilowatt of four reactors ordered at once for consecutive building would be about £85—a saving of just under 20 per cent. To give some indication of what this means in terms of generating cost, I may say that the cost of each unit sent out from a four-reactor station, each of between 500 and 600 kilowatts, would be of the order of 0·466d. per unit on the basis of my ground rules, and without allowing for any increase in the present estimated life of fuel, whereas the cost of each unit sent out by a one-reactor station of the same design would be something over 0·525d. per unit. That is a big difference; and a further replication of the design would have given further reductions.
My Lords, what I am trying to do here is to establish a proper basis of comparison. We know what the figures
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are for conventional power station costs. The estimate is that something between 2,000 and 3,000 megawatts of power will be produced from each design of conventional plant; and so, if we want to get a fair comparison—and this we must try to do—and if we want to compare like with like, we must try to compare the cost of electricity from nuclear plant and the cost of electricity from conventional plant on the basis of repetition of the same design of reactors.
It may well be said that all this is pure theory, and that in practice there can be no probability of building a sufficient number of stations of nuclear plant in the next few years. But the main reason why the Central Electricity Generating Board do not build more nuclear power stations is that they consider them to produce more expensive electricity than conventional stations. We have, therefore, got into a vicious circle. Nuclear power is thought to be non-competitive, largely because there is insufficient repetition of design. There is insufficient repetition of nuclear plant design because nuclear power is thought to be non-competitive. It can also, I suppose, be said that the whole basis of the C.E.G.B's nuclear power ordering programme has been to encourage steady development from design to design of reactor. That is true; and I should like to say that I think that there has been steady development. We have done much better in this industry—and did long before I got into it—than we ever take credit for: indeed, we are constantly denigrating Britain's best progress.
I am not, of course, suggesting that there should not be at appropriate intervals changes in design. Indeed, at this particular moment we are obviously on the verge of trying out a new system which will show further cost reductions than Magnox has yet achieved. But I am saying that there should be more than one station produced of each design, and certainly more than one reactor. I would say further that in forming a decision as to how competitive nuclear power is with conventional power, the calculations must be based on at least four reactors of the same design and not on one or two. There is just one further point that I would add, before I try to sum up this argument. Some will say that the estimate

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of cost should be increased because of a risk factor. But it must not be overlooked that the safety requirement is present throughout the design and has already added greatly to the costs before any of these calculations that I have been talking about are made.
My Lords, I draw these conclusions from the points I have made. First, that if the right methods of calculation of costs are used, nuclear power will be proved broadly comparable with the best sources of conventional power from 1965–66, even with the specially high cost of having only one nuclear station of each design. My second point is that if the same output is programmed in future from each design of nuclear power station as for each design of conventional plant, the costs of nuclear power will prove to be substantially lower. My third point is this: that since the adoption, up to the present, of what I regard as the wrong methods of calculation of costs has led to the wrong answers about the competitiveness of nuclear power, that has discouraged the building of more nuclear stations—a result which itself has appeared to confirm the wrong answer. This is not only a vicious circle, but has a whiff of the old story of the chicken and the egg—which came first?
I remain very much of the opinion that the high hopes held out for nuclear power in its early years were fully justified. We have done much better than we think; but we could do much better still. We are in the habit of taking a justifiable pride in Britain's pre-eminence in the civil uses of atomic energy; yet many people with influence have got into the bad habit of talking down the progress of its development, without any justification at all. To those—and I am one—who are concerned with increasing Britain's exports in nuclear power stations this is as damaging as it is inexplicable. And the failure to have a properly planned programme at home does even more damage to our export prospects.
The history of the relationships of the United Kingdom Atomic Energy Authority, the C.E.G.B. and the industrial consortia is important now only because of the lessons of the future. It should not be thought that all these relationships have always been bad; indeed in many ways they have been very
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good. But the lessons that have been learned have in fact cost many millions of pounds. Certainly the relationship between the Central Electricity Generating Board and the United Kingdom Atomic Energy Authority—which will, I expect, have to change in detail from time to time—must be one of partnership. Certainly the C.E.G.B. will have to take account of private industry's problems—as, to be fair to them, they have sometimes tried to do. And I believe that private industry must appreciate the problems of the C.E.G.B., which I think they do.
But I believe the most important lessons for us are that national policy on nuclear power should be guided all through by a sound belief in its competitiveness and in its economies, and that it should provide a firm programme on which everyone concerned can plan ahead, and which will ensure the economic use of the undoubted technical advances available to us by providing for the construction of more than one station of each new design. It is not the technical efficiency of nuclear power plant or the efficiency of its designers, nor is it anything inherent in nuclear energy itself, that apparently keeps its costs above those of conventional power. I believe it is mistaken methods of calculation and, from time to time—but only from time to time—the refusal to plan a proper programme which are the causes of the pessimistic attitude adopted by some people to this problem.
5.2 p.m.
VISCOUNT MILLS: My Lords, I am sure your Lordships must have listened to this debate with somewhat mixed feelings, but the speech of my noble friend Lord Aldington was most moderate and most helpful. He has renewed my faith, which I have never lost, in nuclear power, which I believe is one of our great national assets and which will prove to be even more of an asset in the future.
I did not decide to take part in this debate because I was a former Minister of Power. I did not do so because I had the privilege of setting up the first Central Electricity Generating Board and appointing Sir Christopher Hinton as its Chairman. We have heard many things about Sir Christopher to-day, and

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perhaps this is not the point at which to talk about it, but I should like to take an early opportunity of saying that, in my view, he is a great public servant and has been largely responsible for the successful operation of the electricity side. (There is another noble Lord who has given much of his life, very successfully, to the electricity industry—I am referring to the noble Lord, Lord Citrine. He has been followed by Christopher Hinton and by Ronald Edwards, who make a very admirable team.) Nor did I decide to take part in this debate because I knew first-hand the negotiations regarding the Wylfa station, to which the noble Lord, Lord Coleraine, referred so forcefully and with such feeling. I decided to take part in the debate because I disagreed with the Motion put forward by Lord Coleraine himself.
During my term of office I was responsible for three nationalised industries, and I always felt that it was imperative to let them conduct their business affairs as best they could. I was always particularly careful to think that it was their problem to deal with the supplies they required and to conduct their tendering themselves. I have always looked upon the nationalised industries in the same way that I look upon private industry. They have to be efficient; they have to carry out their duties in the way that seems proper to them. The Minister has power, if he is not satisfied with any particular member of the Board—the Chairman or otherwise—to make a change, but if every time somebody disagrees with a decision there is going to be a public inquiry then the business of carrying on the nationalised industries will not be pursued. No one will be anxious to do it, and rightly so.
This Motion draws attention to the development of the nuclear energy programme, with particular reference to the relationship between the United Kingdom Atomic Energy Authority and the Central Electricity Generating Board. I was concerned in some of the early developments in nuclear energy. I well remember our pride, which was frequently expressed in this House, on the results of the researches of the Atomic Energy Authority. We thought it necessary at that time to rely upon nuclear power
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in a big way to bridge the gap between the foreseeable requirements of electricity and the availability of our resources.
I would remind your Lordships of two things. First, we were short of coal: coal could not at that time meet our requirements. I am sure we should all congratulate the industry on what they have done since. At that time we had just emerged from Suez and I think we should have been considered foolish to rely upon imported oil to bridge that gap. So we decided on this large nuclear power programme, and the Atomic Energy Authority—very ably—took steps to bring into being consortia of manufacturers so that the programme could be implemented. But what happened? Coal became more plentiful and the supply improved so that we had large stocks of coal. The design of conventional stations was so improved that the apparent costs were below the cost of nuclear power, a subject about which my noble friend Lord Aldington has had much to say. So it was decided to phase out the programme. That was done twice, and I should say very wisely done. But, of course, the firms catering for the design and supply of nuclear stations had to take the necessary steps to adjust their arrangements and resources to meet the phased-out programme. The number of consortia eventually came down from five to three. I know it has been said that this was due to the force of Sir Christopher Hinton, but I think the firms would have had to adjust themselves even if that force had not been there to help them to do that. There has been much published and much said—
LORD SHACKLETON: My Lords, before the noble Viscount leaves that point, could he, with his previous experience in this Ministry, say whether this phasing out was done purely on the initiative of the Central Electricity Generating Board, or did the Government play a part? Because this was a main point in the speech of the noble Lord, Lord Coleraine.
VISCOUNT MILLS: The phasing out was largely done by the Central Electricity Generating Board, but they were in constant touch with the Minister of Power. We always overlook the part played by the Minister of Power. The Minister of Power does not sit there knowing nothing. He is well aware of the

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proposals of the Central Electricity Generating Board and has the opportunity, if he wishes, of saying that he does not agree with them. That was always the situation, and it is the situation to-day.
LORD SHACKLETON: May I press the noble Viscount further? Is it correct, then, that the Minister agreed with these decisions? This is really germane to the whole argument.
VISCOUNT MILLS: Well, my Lords, I will leave my noble friend Lord Carrington to deal with that point. I was not the Minister at the time when the phase-out was done, and I cannot say whether or not the Minister agreed. I can only tell your Lordships what was my experience in relation to the Central Electricity Generating Board.
If I may, I will go on to this question of the relationship between the United Kingdom Atomic Energy Authority and the Central Electricity Generating Board. There has been much written and much said about this relationship. In fact, the noble Lord, Lord Stonham, in the kind of immoderate speech which we have come to expect from him, talked about unseemly deception. I am very doubtful whether that is justified at all. Your Lordships will be aware that a research department and an industrial department concerned with production do not always follow the same line of thought, and they cannot be expected to. I believe it is true that the personal relationships between the members of the Generating Board and the members of the United Kingdom Atomic Energy Authority are absolutely first-class, and leave nothing to be desired. The extent of any difference is brought out quite clearly in the Report of the Select Committee. I think it is healthy that they should think differently. They think differently on this question of the load factor and the life, and I can understand why. I think it is right that the Central Electricity Generating Board should be conservative in their estimates, should not lead us up the garden path, but should put forward what they think is the practical thing to do at this point of time.
The Motion calls for
"Her Majesty's Government to set up a Committee of Inquiry to investigate and re-
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port upon the present arrangements and prospects of the Nuclear Energy industry."
Not only, as I have said, is the Ministry of Power continually in touch with the Board on the matter, but it is well known that a committee, the Powell Committee, consisting of representatives of the Atomic Energy Authority, the Generating Board, the Ministry of Power, the Treasury and the Board of Trade are currently examining this position; and that, meanwhile, as has already been announced, the Central Electricity Generating Board have issued a statement to the effect that, subject to satisfactory experience in the Atomic Energy Authority's prototype at Windscale, and to any Government decision affecting the nuclear power programme, they intend to place an inquiry for a reactor or reactors of the gas-cooled type to competitive tender at the end of this year or early in 1964. In these circumstances I ask your Lordships, what is to be gained by setting up a Committee of Inquiry to consider the present arrangements and prospects of the nuclear industry?
In addition, as your Lordships know, the whole electricity supply industry has been under the examination of the Select Committee on Nationalised Industries. Their very comprehensive and able Report was published as recently as May 23 last. The Report concludes with the following paragraph:
"Your Committee's examination of the electricity industry occurred at a critical moment in its career, when on the one hand a combination of exceptionally difficult conditions had emphasised its weak spots, and on the other, when its policies were being given an invigorating new look to match its ever growing responsibilities. Your Committee conclude that the adoption of these policies and their vigorous pursuit at all levels are the means best calculated to enable the industry to discharge its responsibilities to the nation in future."
My Lords, do we really want to embarrass the industry with another inquiry, when, I submit, all the facts are well known and are under examination from every relative point of view?
The remainder of the Motion asks for the Inquiry to include
"the system of tendering, pricing and contracting".
As I have already said, I have always regarded this matter as largely one for the Board of the nationalised industry.

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Should they really be treated differently from private industry in this respect? I am sure that in business we have all at one time or another been disappointed at the result of a tender. But, because this happened in the case of a nationalised industry, are we justified in setting up a committee of inquiry to look into it?
The noble Lord, Lord Coleraine, described the decision of the Board as arbitrary, irresponsible and unjust. I submit that he has a perfect right to do that; he took part in the negotiations, and he is entitled to his opinion. But I think the noble Lord, Lord Stonham, was a bold man to make a statement to the same effect without hearing the other side.
LORD STONHAM: My Lords, if the noble Viscount will allow me to say so, I prefaced my quotation of what the noble Lord, Lord Coleraine, said, by saying: If these facts are true, if they are established, then that is a correct description. Equally, I would remind the noble Viscount that the proposal with regard to tendering, pricing and contracting comes not from the noble Lord or from myself, but from the Select Committee, who surely are impartial in these matters.
VISCOUNT MILLS: If the noble Lord's rendering of what he said proves to be correct when we look at Hansard tomorrow, I will apologise, but I certainly took him to repeat these words on his own responsibility. In fact, he went further and said, "This is a national scandal"—a word which I am sure appeals to him very much.
Then the noble Lord said that the National Economic Development Council's proposals had been placed in jeopardy by the failure of the electricity industry to plan for adequate supplies; and he also said (although he did say it was 1958–59) that the forward plans had been substantially cut by the Government. There is no truth in that whatever. The capacity of the industry has never been interfered with by the Government in any shape or form.
LORD STONHAM: My Lords, I must ask the noble Viscount to allow me to intervene. He must be fully aware that the Government, in 1957–58—that was
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the last occasion that was mentioned—did in fact cut down on the amount of money which was allowed to be spent on new plant construction. It is no good denying that.
VISCOUNT MILLS: I am not denying it. I am saying that they did not interfere with the generating capacity of the country. What happened was that there were more conventional stations used at a lower capital cost, but the generating capacity of the country as planned was adhered to; it was not interfered with by the Government. But on this question of the capacity required to meet future plans, I think there has never been any secret about what the Electricity Council have done in this respect.
I have in my hand a booklet written by Professor Ronald Edwards, the chairman of the Electricity Council, and Mr. Clark, the chief planning engineer of the Central Electricity Generating Board, about a year ago; and if you examine the evidence before the Select Committee you will see, again, that they have never made any attempt to hide up any discrepancies between what was required and what they had planned. But when one considers that they had to plan ahead six, seven or eight years, it is not surprising if they did not always hit the targets. The severe weather which we had this last winter, and which perhaps the Board ought to have provided for—it is easy enough to say it after it has happened—was a very severe strain on their resources. But it appears to me that if they do provide what we think is adequate cover, then we are inclined to grumble at the cost.
I think that, on the whole, they have done a remarkable job; and I would just quote from an article in the Economist which perhaps puts it better than I can. It refers to these inadequacies, and then says:
"Even as regards these central inadequacies, the Select Committee gives the electricity industry a pretty clean bill of health, because by the time that it learned of them the industry had already begun clearing its house of outdated notions. A radical review of electricity's commercial thinking has been set in train (and the committee makes little secret of the fact that it puts this down mainly to the sheer intellectual impact of Professor Edwards, the least academic of professional economists, supported by the unorthodoxy of Sir Christopher Hinton at the Generating Board)."

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I do not think that I want to add anything to what I have said. I feel that the noble Lord, Lord Coleraine, intently believes in what he had to say, but I do not believe there is any justification for many of the strictures that were passed on Sir Christopher Hinton—or, I should really say, on the Generating Board, because Sir Christopher never acts without his Board. I am sorry, too, that occasion was taken to criticise the Minister of Power, because he has always taken, and I am sure will continue to take, the keenest interest to see that the national Boards do the job which they have to do thoroughly and well.
5.29 p.m.
LORD GEDDES OF EPSOM: My Lords, I apologise lo your Lordships for intervening in this debate at very short notice, and particularly to the noble Lord who will reply for the Government. I hope your Lordships will also forgive me if it is felt that I am prompted more by personal loyalties than by anything else in what I am going to say. I must declare an interest. I am a part-time member of the Atomic Energy Authority, and I was until the end of the year a part-time member of the Central Electricity Generating Board. It is perhaps unusual for a Member of this side of the House to dispute with another Member of this side, but I am bound to say that I was moved to intervene by the speech of the noble Lord, Lord Stonham, although I have come to the conclusion, having heard the noble Viscount, Lord Mills, that my intervention may not really be necessary.
The noble Lord, Lord Stonham, defends his most appalling accusations on the grounds that he prefaced them with the remark, "If these facts are accurate". That is no defence in this case, because he started off by saying that the statement of the noble Lord, Lord Coleraine, was to him a statement of fact which could not be disputed; and if the noble Lord, Lord Stonham, accepted what had been said as a statement of fact which could not be disputed, then, when he talked about "dishonourable" things and about "irresponsible, arbitrary dictatorship", it was not qualified at all; it was in relation to matters which he accepted as facts. I want to suggest to him, and to your Lordships, that it
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may be that it is difficult to dispute that a fact is a fact; although it has long been disproved that facts are facts. Some facts are facts; but only some of them. In this case, although I was only a part-time member of the Generating Board, and for only a very short time have been a part-time member of the Atomic Energy Authority, I would have no difficulty whatever in disputing many of the inferences from the facts that have been submitted to your Lordships' House.
Let me take one only, a very simple one. The noble Lord, Lord Coleraine, in the course of his speech drew attention to the fact that the engineering member of the Central Electricity Generating Board was absent in Japan when a decision was taken. There can be only one purpose in that submission to your Lordships. It was, I submit, to indicate that the Central Electricity Generating Board took a decision in the absence of its—
LORD COLERAINE: My Lords, forgive me for interrupting. If I gave that impression I sincerely apologise. I did not mean to give that impression at all. My argument was that on May 24, which was the first occasion on which Sir Christopher Hinton announced his personal view of the design, the engineering member was in Japan; and that is right.
LORD STONHAM: My Lords, since the noble Lord has been interrupted, perhaps I may be allowed to add my voice. If the noble Lord reads in Hansard to-morrow what I had to say, he will find that I said that many of the statements made by the noble Lord, Lord Coleraine, were facts beyond dispute, because indeed they are in the Select Committee Report and have not been disputed before.
LORD GEDDES OF EPSOM: My Lords, it would be amazing if the noble Lord, Lord Coleraine, were to have made a speech in this House without some of it being factual. With respect to the noble Lord, Lord Coleraine, I accept his explanation. The point I wanted to make was this: he himself said that Sir Christopher Hinton was one of the greatest engineers in the country; and the deputy-chairman of the Generating Board, before he was appointed his deputy, had been the

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member for engineering on the Board. So clearly when this decision was made there was no—
LORD COLERAINE: My Lords, the deputy-chairman was also in Japan on May 24 when, whatever the Board's decision was, I am convinced that Sir Christopher Hinton's decision was made.
LORD GEDDES OF EPSOM: Then, my Lords, let us leave it on the basis that there are inferences which can be drawn; and the inference was that the Board, in fact, made their decision without proper engineering advice. This, I think, is completely wrong. The noble Lord, Lord Stonham, comes along and says all these things: irresponsible, arbitrary, dictatorship, dishonourable, and national scandal—and then what does he say? He says that it is impossible in this debate to arrive at the true facts. I could not agree with him more. But how on earth can anybody get up and make these, with respect, absolutely outrageous statements on the basis of their being facts, and then admit that one cannot arrive on the facts? I find it extremely difficult to follow this line of reasoning.
Let us come to the point about the letter of intent, which he says was dishonourable—and, with respect, even in the privileged precincts of your Lordships' House one should be very careful about talking of servants of the nation in terms of "dishonourable"; one should be very careful indeed. But I wonder whether the noble Lord, Lord Stonham, has read the letter of intent. Is he implying that the letter of intent was placing an order? As I understand it, the letter of intent in this case, as in all cases, says, "subject to price and design". Am I to understand from the noble Lord, Lord Stonham, that once you have given a letter of intent, subject to price and design, the only people who are to decide whether the design and price are right are the tenderers, the sellers? The only people who can possibly decide that are the people who are going to buy.
LORD STONHAM: My Lords, my noble friend has asked a question (I had refrained from interrupting him before) and I must again say—and I hope your Lordships will read what I did say—that he has misquoted me completely in this. I made reference to what the noble Lord,
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Lord Coleraine, had said: he himself recounted the whole facts of this transaction and then said, "I regard this as dishonourable". I came to refer to his speech and briefly mentioned the whole range of what he had dealt with, and I said "If this is correct, then I agree that that was a correct description to make." I still think so, and I would hope that my noble friend would quote me more accurately if he must quote me.
LORD GEDDES OF EPSOM: My Lords, I apologise to my noble friend if I attacked his sensibilities. And if in my criticism I have not included the noble Lord, Lord Coleraine, I will now do so. The fact is, if we are dealing in facts, that reference was made to a letter of intent and reference was made to the decision arising from that as being dishonourable. All I am putting is this: what was the letter of intent for? What did it say? It cannot possibly be dishonourable—in the light of the terms of the letter—to decide, on the tenders submitted, that it was not acceptable.
Now I include the noble Lord, Lord Coleraine in my criticism when I come to this question of the terrible ogre, this super-Hitler, Sir Christopher Hinton, who sits astride the whole electrical industry, trampling down all opposition with complete disregard to justice or anything else! This man compelled consortia to combine together. As a matter of dictatorship? No, my Lords, as a matter of helpfulness. I repeat this: as a matter of helpfulness. And anybody who knows anything about it knows it to be true. What was the position on the known nuclear programme? It was clearly impossible to place orders with a large number of consortia. There had to be a limit. The more you had, the less likelihood was there of each getting an order; not because Sir Christopher Hinton as a matter of vindictiveness was going to refuse to give one, but because it was physically impossible to give one. You could not keep them all going. So he went to them in a spirit of helpfulness and said, "This is the situation", and they wisely faced up to it. Now it is turned round to signify compulsion by this arch-villain ! Really, my Lords, I must ask your forgiveness. It is perhaps because I am feeling a little warm about this.
I have had the privilege of sitting on the Board under this man and, remember.

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I went into it as a trade unionist with no knowledge whatever of the industry—as an ignorant Socialist, if you like, who was opposed to all these "people on the other side". And I say this: on the contrary, rather than Sir Christopher Hinton being the man he has been painted here to-day, an arch-villain, he is not only a great engineer—and I thank the noble Lord, Lord Coleraine, for that—but a great man and a great public servant, and he has only this service in mind. Certainly he is a little ruthlesss in the pursuit of efficiency; and I, as a Socialist, am not one to criticise somebody who tries to make a nationalised industry efficient. Why should he want it efficient? He wants the efficiency in the national interest, so that he can get the best possible supply of electricity when it is wanted and at the lowest possible price.
I sit back amazed at those wiseacres who can to-day say what should be done in five years' time; those who knew that last winter was going to be the worst winter of the century; those who knew, when this had to be done, what ought to have been done. I wonder whether they realise that, when a power station is to be built, it takes at least five years before it can be commissioned, and the forecast of what is going to happen is not of what is going to happen to-morrow or next day, but in five or six years' time.
My last word is this. One of my earliest memories on the Generating Board was that, in considering the plant forecast of the ensuing year, the Board under Sir Christopher Hinton came to the conclusion that the previous forecast was wrong and that it was necessary to "up" it—to review it in an upward direction. Any suggestion that Sir Christopher Hinton is not only a dictator but a blind dictator is nonsense. I apologise to your Lordships, but I say this. To much of what has been said, I would not attempt to reply. I am not technically qualified to do so and I am not attempting to reply to it. But this country has never been better served in a public position than by the Chairman of the Central Electricity Generating Board.
5.42 p.m.
LORD HAWKE: My Lords, I have never had the pleasure of meeting the Chairman of the Generating Board. I
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can pay tribute to him only as a most effective television artist, who puts over his case remarkably well. But the acid test of the policy of the Board is going to be whether, if next winter is not the worst for the century, we have power cuts; and I am afraid that I am not altogether confident. I wonder whether some of the phasing-out in the past has been the result of periodic financial crises, because whenever there is any run on the pound or any weakness of sterling Government expenditure takes a frightful lambasting from the City of London, journalists, bankers and all. I think there has been a great failure of the Government over the years in not putting over to the City of London that the Government are responsible for power in this country and have to get power years ahead.
Electricity is unique in that the price cannot be suddenly put up to reduce the demand. Power has to be switched off, if the demand cannot be met. The Government, as the responsible body, have simply to provide the capital expenditure, and it is more important than capital expenditure in private industry. This has never been put across by the Government to the financial commentators and bankers. The great judgment on this item, of whether atomic energy or other fuels are to have our short capital, is whether we are prepared to spend more money to-day, knowing that we shall probably have lower running costs in ten years' time. That is an extremely difficult decision for the Chairman of a Board which is running as a commercial proposition. I, for one, think that the right person to decide this is the Minister of Power, after consultation with his Cabinet colleagues. I do not think that the decision with regard to the size of the atomic programme is a right decision to leave in the hands of the Central Electricity Generating Board. From the point of view of general public security, one would believe that it is right to back all three horses—oil, coal and atomic energy—but that can be done only by the Minister giving directions, in that atomic energy may be more expensive in the immediate future though cheaper in the long run.
5.45 p.m.
LORD SHACKLETON: My Lords, I am not sure now whether it is worth

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starting my speech. I had hoped to finish before the Royal Commission. But since we have a few minutes, I may start off by dealing with some points, I must admit that until the noble Lord, Lord Hawke, spoke there was a greater atmosphere of tension in the House than there is now. I was hoping to lower that a little but he has succeeded in doing so, for which we are grateful.
We have had a most vigorous speech from my noble friend Lord Geddes of Epsom, which was also an unexpected one. I suppose that he was exercising his own discretion, as a member of the Generating Board, to speak on this matter, and it was interesting to get this other view of Sir Christopher Hinton. We have a clear picture of a very dark villain, on the one side—perhaps that was not suggested, but certainly a nasty man—and on the other of a knight in shining armour. The real point in this matter, whether he be a knight in shining armour or an ogre, is that Sir Christopher Hinton ought not to exercise these powers at all. This was the main contention of the noble Lord, Lord Coleraine, and I hope to develop some points on this aspect.
There is no doubt that the speech of the noble Lord, Lord Coleraine, was an absolute tour de force. Everybody has emphasised how long it was, but I was impressed by his ability to speak without notes on such a difficult subject. In whatever way we look at this issue, there is no doubt that an important principle is involved. I think it is a good thing that this should be debated, and even though our knowledge is necessarily not complete, even though we may not be fully briefed on the comparative costs of nuclear fuel, and even if we may not personally know Sir Christopher Hinton, we need to press our investigations. I consider it is right to ask for a committee of inquiry—not that I think for one moment that the Government are likely to grant it, but we live in hope. There is a field here, as successive speakers have admitted, in which we do not really know the position.
The issue over the Wylfa contracts which has triggered this matter off, needs to be clarified. On the one hand, we have the noble Lord, Lord Coleraine, saying in effect that they had expected this con-
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tract; that they had countless technical meetings; that they had no reason to suppose that they were not to receive the contract; and that there had been the planning of the consortia, including that about which he and the noble Lord (I know him as a Member of Parliament better than as a Member of your Lordships' House), Lord Aldington, spoke They expected this contract and came together in a consortium with Richardsons Westgarth who, I gather incidentally, are going to participate in some way—a generous and possibly also not unastute move by the Central Electricity Generating Board—
LORD ALDINGTON: My Lords, I want to be very careful not to have arguments put into my mouth which I did not use. I said nothing about the letters of intent. I refused either to adopt or reject what my noble friend said, because I did not wish in this House to be involved in the argument. I deliberately did not state to the House my attitude on the letters of intent and I hope that the noble Lord will take that from me.
LORD SHACKLETON: My Lords, the noble Lord was very careful to disassociate himself from the remarks of his noble friend, though the only ones that bore on it seemed to agree with him, certainly in regard to the matter of price, which is a very important issue. It is argued on the other side that the Central Electricity Generating Board, as a dutiful public body, decided not to give the contract, presumably because they thought the product was not technically good enough and the price was not right. It is impossible for us to choose between these two points of view. We know that the contract has been given to another consortium, the English Electric Group; that they will now build a 1,000-megawatt station, which is much more sound economic sense; and that the U.P.C. are out in the cold.
The consequences, of course are not confined purely to a simple commercial decision. They have not only an effect on the employment of those in this particular industry, but a tremendous effect on our potential export trade. I visited, in the early stages, the power station which this particular group, and G.E.C., in particular, were building in Japan;

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and, whatever else may have been the prospects of the Magnox reactor, I should have thought that this particular episode has killed what remaining prospects there were of its being of value to our export trade. It may well be that they had already gone; it may well be that the smaller reactors, boiling-water reactors and so on, will hold the field. I think we need to know what has happened on this particular issue, bearing in mind (and this is why I think noble Lords on both sides of the House are concerned) that there is this great power which we maintain ought to be exercised by the Government.
This brings me to the point with which the noble Viscount, Lord Mills, was dealing, and where I think he knew he was on delicate ground. The real issue is, how far in this matter the Central Electricity Generating Board have acted with the agreement of the Government. Perhaps I should ask the noble Viscount the Leader of the House whether I should now break off. I do not know how long we need before the Royal Commission. I am about to embark on a rather intricate argument.
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, if the noble Lord wants to break off now, I am sure the House will defer to his judgment. We do not know what he is going to say, and this may be a convenient moment in his speech. But the Royal Commission is not until six o'clock, and if he can employ the next five minutes usefully, then by all means let him do so.
LORD SHACKLETON: I will employ them, whether usefully or not. I am sorry to have to make this judgment for the House. I realised that I was embarking on a difficult part of my argument. I was dealing with the amount of influence that the Government have exercised in this matter.
VISCOUNT HAILSHAM: My Lords, perhaps I may interrupt the noble Lord. I am told that I made a mistake of judgment a moment ago. Someone who is wiser about these things than I am came in and was evidently much worried by the answer that I gave to the noble Lord. I think it would be convenient if we were now to adjourn during pleasure in readiness for the Royal Commission.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
6.0 p.m.
The following Bills received the Royal Assent:

Protection of Depositors,

Town and Country Planning,

Stock Transfer,

Local Employment,

Remuneration of Teachers,

Education (Scotland),

Sheriff Courts (Civil Jurisdiction and Procedure) (Scotland),

Forestry (Sale of Land) (Scotland),

British Museum,

Glasgow Corporation Order Confirmation,

Ministry of Housing and Local Government Provisional Order Confirmation (Bolton),

Universities of Durham and Newcastle upon Tyne,

British Waterways,

Marine Society,

Saint Dionis Backchurch Churchyard,

Saint Nicholas Acons Churchyard,

Mersey Docks and Harbour Board,

London County Council (General Powers),

British Railways.

House adjourned during pleasure.

House resumed.

THE NUCLEAR ENERGY INDUSTRY AND THE C.E.G.B.
6.14 p.m.
Debate resumed.
LORD SHACKLETON: My Lords, as I was saying—and this part of my speech is mainly directed at the noble Viscount, Lord Mills, and the noble Lord, Lord Carrington—the main issue with which I

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am concerned is the extent to which the Government participated in these decisions and the extent to which they ought to participate. I did ask the noble Viscount, Lord Mills, but perhaps it was unfair to do so because he was not really in a position to answer. I therefore do not for one moment accuse him of being evasive. But I hope that the noble Lord, Lord Carrington, speaking for the Government, will be able to answer my question—that is, to what extent consultation between the Minister of Fuel and Power and the Central Electricity Generating Board has taken place in regard to the phasing and planning of this particular programme.
We have already had experience in other nationalised industries of Government influence of a kind which has been decisive in the policy that the particular Board has followed, and yet the Government have slid from under and have failed to back up those decisions. We should like to know—and this is very important to the judgment of the Central Electricity Generating Board—whether, in fact, the Government backed these decisions, or whether they were told about them and acquiesced, but made no representations one way or the other. If it is the latter, as I suspect it is—in fact, there has been information that the Government have themselves not sought to influence the decisions—then I can only echo the comment of my noble friend Lord Stonham: that it is a national scandal, because these decisions are of much wider importance than the cheap and efficient supply of electricity, important though that may be.
We know that in the case of B.O.A.C., the Minister of Aviation has had some very hard things to say when B.O.A.C., following what they believed to be their duty in regard to national policy, have done certain uneconomic things in following that policy. Here we have the Central Electricity Generating Board—and the noble Lord, Lord Geddes of Epsom, would support this—pursuing ruthlessly a policy designed to give the country the best electricity at the cheapest price. This would seem to be a very proper thing for them to do; but is it right that they should do it regardless of other factors? How far, in fact, has the Minister responsible for atomic
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energy, the noble Viscount, Lord Hailsham, who, unfortunately, is not with us at the moment, been consulted? How far has the President of the Board of Trade, who is concerned with the prospects for export of nuclear installations of the kind that the General Electric Company and U.P.C. have pioneered, been consulted? In fact, the first nuclear power station in Asia is now being built by one British consortium—indeed, the consortium whose affairs we are discussing to-day. The view, I think, of many noble Lords—and the noble Lord, Lord Hawke, said as much—is that these decisions ought not to be left to a single man or a single Board who are charged with a narrower responsibility.
I should like to look at the phasing of this nuclear power programme, and I would relate my remarks to some of the remarks made by the noble Lord, Lord Aldington, about cost. It is, of course, perfectly true that while we conduct our nuclear power development on a limited scale the cost will never be able to match that of conventional fuel. Whether, in fact, it can ever match it is still to be decided. On this point, impressed though I was by the figures given by the noble Lord, Lord Aldington, which I followed very carefully, I must say that I have a horrid feeling that other figures could be produced. Indeed, I have seen other figures which would suggest that for a number of years, anyway, with the present scale of production of atomic energy plants, they cannot compete with the conventional fuels. We are now committed to this Magnox development and, clearly, these Magnox stations will continue to be in use for the 25, or maybe 30, years that the noble Lord, Lord Aldington may expect.
LORD ALDINGTON: My Lords, the noble Lord referred to "other figures". Certainly, there are other figures, and I said there were, but I hope he will do me the kindness of examining the figures I gave and seeing whether they are false. My case was that we have been tied too long to the other figures. The noble Lord is a man with a fresh mind and I ask him to have a fresh look.
LORD SHACKLETON: The noble Lord's figures were very similar to figures that I had been given by a different source, but on the same sort of side. But the fact is that they depend upon a

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number of imponderables. First of all, there is the load factor; and the noble Lord may say one thing and the Central Electricity Generating Board another. There is the rate of depreciation; and there is, of course, the interest rate—again an important factor where there is very high initial capital investment. Against that there is a possibility of further developments—for instance, the advance gas-cooled reactor; and we may move in due course on to some of the other reactors. It seems to be highly desirable that there should be more development of these at the moment.
Clearly, if you are trying to gear your nuclear power programme into a general power programme it is not possible to do too much experimentation. It has been argued that experimentation in this matter is very costly. But we are discussing not merely the future of the electricity supply industry; we are discussing the future of what may be one of the important national (for want of a better word) growth industries which may in the future bring in very important resources in the way of foreign exchange. At the present moment the signs are bad; we are in danger of not competing in the markets of the world with the right sort of equipment. This is where the views of the noble Viscount, Lord Hailsham, would be extremely interesting.
I realise that we cannot, here and now, discuss all the different types of reactors. It may be that we shall move on to a type of Canadian heavy water reactor—I do not know. There are many views. In due course the Dounreay type, the fast breeder reactor, may put us in the lead. But, meanwhile, those parts of British industry which have developed know-how and have knowledge must be kept going. This, in effect, is a form of subsidy to private industry, and it is one that I think we inevitably have to accept. There is a further element of subsidy, which I think the noble Lord, Lord Aldington, did not take into account, and that is in the price of fuel elements. If he were to look at the Third Report of the Public Accounts Committee he would see that the Atomic Energy Authority were somewhat taken to task in regard to presentation of their losses and urged to put up prices of their fuel elements—and these are the Magnox elements; he will see there are other charges to be
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taken into account. There is not time to discuss all the implications of atomic energy.
I did not think so at first, but I feel that the noble Lord, Lord Coleraine, was right to raise this subject because it is a matter of great national importance. With certain points that he made, admittedly, I do not agree. However, I do not propose to go into those. But the fact remains that these consortia have lost money in this matter and are likely to continue to lose money. There is a wide national issue involved, and the Government have lamentably failed to co-ordinate their efforts in the direction of a national fuel policy. It must stand out a little from to-day's debate that some form of Government co-ordination is necessary. If this is not to happen there will be dissatisfied people in industry; there will be a tax on a nationalised industry whose efficiency in regard to the Central Electricity Generating Board is not much under dispute, although I must point out to the noble Viscount, Lord Mills that the Report from the Select Committee on Nationalised Industries had some rude things to say about their forecasting and did suggest, rather pathetically, that there was no reason why the securing of electricity supply in this country should be inferior to that of the United States and Canada and France. But we accept that the Board miscalculated in the past and that the present leaders are calculating in the right way. But there are criticisms that could be made.
Where is the Minister of Power in all this? What has he said? He has said nothing in the Commons. There is the complaint that the Central Electricity Generating Board issued a statement of their policy the day before this debate. I do not know how far this debate triggered this decision and whether it was right. But I would defend their right to do it, in view of the total silence of the Government. Most of us on this side would support an Inquiry. It can be argued that the Powell Committee will be reporting, but we are confronted with a failure which this particular incident has brought very clearly to mind. It is necessary that these relations should be clarified; that reasonable prospect should be given to those in the industry, both on management and on the investing side, and,

1439
above all, the technicians and workers. Until we have some signs of an approach to a national fuel policy in this matter, and some recognition of Government responsibility, I do not see that there is much hope of getting it, and we shall suffer in the future in regard to an industry on which we will depend very greatly in the export trade in maintaining this country's economic place.
VISCOUNT HAILSHAM: My Lords, although my noble friend Lord Carrington is, of course replying to the debate, which I very much regretted I was unable to do myself, I propose to say a word or two afterwards, if the House will bear with me, because I may be able to say one or two personal things which will assist noble Lords opposite and my noble friend below the gangway.
6.28 p.m.
THE FIRST LORD OF THE ADMIRALTY (LORD CARRINGTON): My Lords, the use of nuclear power for the generation of electricity is in one sense a major revolution in technology, and its introduction into the existing systems of generation inevitably produces a number of difficult problems. I think it is therefore very useful that we should have had a debate on this subject, and I am grateful to the noble Lord, Lord Coleraine, for giving the House the opportunity, though I will confine myself mainly to the larger issues involved in his Motion. The Government are grateful, too, for the constructive speeches and suggestions made by other noble Lords in the debate.
Perhaps it would be helpful if I were to start by sketching very briefly the history of the nuclear power programme. It was ten years after the explosion of the atomic bomb at Hiroshima that the Government prepared the first programme for civil nuclear power. The 1955 White Paper, to which the noble Lord referred, proposed only the construction of some 1,500 to 2,000 megawatts capacity of nuclear power stations to be installed over a period of ten years. For comparison, the size of the whole electricity supply industry to-day is about 30,000 megawatts. The White Paper stated that the stations would be built by private industry for the electricity gene-
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rating boards—the Central Electricity Generating Board in England and Wales, responsible to the Minister of Power, and the two Scottish Boards, responsible to the Secretary of State for Scotland. Four industrial groups, known as consortia, had been formed in 1954, each embracing great firms engaged in civil engineering, boiler making and electric plant manufacturing, so that each nuclear power station could be ordered as a whole—that is, under a turn-key contract. A fifth group was formed later.
The Atomic Energy Authority, as the only body with the necessary experience at the time, were to be responsible for providing the necessary technical advice to the electricity generating Boards and for training the consortia in the technology and design of nuclear power stations. The first orders for power stations were placed in October, 1956, when Bradwell and Berkeley were ordered for the Central Electricity Generating Board, and Hunterston soon after, for the South of Scotland Electricity Board.
Your Lordships will recall that in March, 1957, the Government announced that it had decided to adopt a much expanded construction programme which amounted to the installation by the end of 1965 of 5,000 to 6,000 megawatts of nuclear generating capacity. This decision was taken because at that time it was expected that a serious shortage of fuels would occur within a few years, and supplies of oil seemed unreliable. My noble friend Lord Mills drew your Lordships' attention to this. But by October of the same year, when the future outlook had somewhat changed, the Government decided to stretch out the programme over a slightly longer period of time and to reduce the rate of installation of nuclear stations. Apart from orders placed by the Generating Board the consortia also obtained two overseas contracts, one for Latina in Italy, which began operations in December last year, and the other Tokai Mura, in Japan, which is due to start up in 1964 or the following year.
By 1960 the strain on our coal supplies had eased, and the prospects for oil supplies had increased. The need for a large nuclear power programme for reasons of the possible shortage of coal and oil, had therefore receded. At the same time the cost of generating electrical power from coal and oil was falling

1441
faster than had been expected because of the development of larger generating sets and stations and the use of higher steam pressures and temperatures. In the outcome, the Government decided to revise the programme again to provide for the installation of about 5,000 megawatts of nuclear power by 1968, and this was announced in the White Paper of June, 1960, on the Nuclear Power Programme.
As part of this revision it was also planned to order nuclear power stations at the rate of about one a year. For reasons doubtless similar to those affecting the programme of nuclear power in this country—the increased supplies of coal and oil, and the falling costs of ordinary power stations—export prospects for nuclear power stations proved disappointing and the consortia did not obtain any further export orders. With these changes in the demand position the consortia began to re-group themselves into three organisations. In January, 1960, the A.E.I.—John Thompson Group announced that it had joined forces with the Nuclear Power Plant Company to form the Nuclear Power Group, and towards the end of the same year, G.E.C. and Atomic Power Constructions joined up to form the United Power Company. The English Electric Group continued unchanged.
The noble Lord, Lord Shackleton, asked me how the Minister of Power came into this. My right honourable friend was informed, but was not consulted about this. The noble Lord, Lord Coleraine—and the noble Lord, Lord Stonham, in the more moderate passages of his speech—claimed that the Government have no nuclear power policy; and the noble Lord, Lord Stonham, claimed that it had no power policy at all—well, I understood him to say so. If he likes to get up and say that he does not agree with that, I shall be happy to accept it from him.
LORD STONHAM: My Lords, I quite agree that the Government have no nuclear power policy; but I made no other statement about their having no power policy at all. I said—and it is demonstrably true—that the present policy for the production of power does not satisfy the demand, and will not do so for some years to come.
LORD CARRINGTON: The noble Lord was extremely critical of what
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happened last winter, and I think rather unjustly so, because he did not mention the fact that it was probably the coldest winter that we have ever had, or certainly within living memory. But if I may just go on from there, and agree with my noble friend Lord Mills—and my noble friend Lord Hawke also made the criticism—it is true that, in the face of urgent demand for investment resources in years past, the capital going into the electricity supply had to be controlled by the Government. But this was never done in such a way that there was any significant reduction in the amount of generating capacity installed.
The nuclear policy is part of the wider energy policy, but the emphasis placed upon it has naturally changed with changing circumstances and expectations. During 1955–60 the stress was laid on the urgent need for alternatives to static coal production and uncertain oil supplies. For 1960–68 the programme concentrates on the development of nuclear technology and construction capacity against the needs of many years hence, when the constant rise of energy demand may make coal and oil increasingly scarce and expensive. The scale and pattern of the nuclear programme after 1968 is the subject of a more detailed study of the economic and technical factors and prospects. This study, or inquiry, was put in hand last year in co-operation with the electricity supply industry and the A.E.A. What the conclusions will be I cannot of course tell. But one thing is quite clear, that there will continue to be a British nuclear power programme, for the reasons that I have given.
There has been some criticism during the debate of the division of responsibility between the Board and the Authority, and I think it might be helpful if I were to describe for one moment the division of this responsibility. Basic research and development of reactor systems are the responsibility of the Atomic Energy Authority, which has a statutory remit to develop atomic energy and is itself responsible to my noble friend the Leader of the House. The Authority also advise the Generating Boards on the performance and safety aspects of the designs of nuclear power stations which have been submitted in

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tenders by the consortia to the Generating Boards. In addition, the Authority operate Calder Hall and Chapel Cross nuclear reactors, which supply electricity to the national grid. The Generating Boards order and operate the nuclear power stations for use in the public electrical generating system.
Lastly, the consortia build the nuclear power stations under contract to the Generating Boards. Basic research, and the development of nuclear power systems were so costly and such a long-term operation that it would not have been undertaken except at public expense by a body such as the Atomic Energy Authority. An account for this expenditure has to be given to Parliament. On the other hand, a large programme of nuclear power stations must, to obtain maximum efficiency and economy, be designed and operated as an integral part of the public electricity supply system. The obvious organisations to own the nuclear power stations were therefore the generating boards.
The Atomic Energy Authority's relationship with the consortia covers, of course, more than the present construction programme. The Authority was originally closely involved in their formation and provided the initial training in a period of collaboration starting in 1954; but even after the consortia were fully trained in nuclear technology, and able to design the power stations, they continued to work closely with the Authority, collaborating and exchanging information on the more advanced development work on Magnox reactor technology and on nuclear fuel development. The Authority also closely associated the consortia with its development work on more advanced reactors, such as the advanced gas-cooled reactor. It does this by providing them with a full flow of information and by placing design and development contracts with them for suitable parts of the work. It can therefore be truly said that the consortia are brought in right from the beginning in new designs of reactors developed by the Authority which are likely to be ordered as power stations by the generating Boards or by overseas customers.
There are three distinct facets in the relationship between the Authority and the Generating Board. There is the purely commercial aspect of selling
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nuclear fuel to the Boards. Then there are the arrangements for consultancy on the performance and safety aspects of designs tendered for a new station. Lastly, there is the general consideration of the broad direction of the Authority's research and development programme for civil nuclear power, for which the Government are ultimately responsible.
At present the procedure for co-ordination—which has been criticised—between the various parties is on the following lines. An annual discussion of the Authority's reactor development programme is held with the C.E.G.B. and the South of Scotland Electricity Board. For this purpose an appraisal of the main reactor systems under development is prepared as the basis for discussion. In addition, a body known as the Reactor Policy Committee now meet much more frequently and regularly to discuss detailed papers. This policy Committee includes representatives of the C.E.G.B. and the consortia. In turn, the Reactor Policy Committee are supported by a number of joint committees drawn from the C.E.G.B. and the Atomic Energy Authority to consider the various detailed aspects of reactor design and operation.
My noble friend Lord Coleraine has referred to the observations of the Select Committee, in their recent Report on the electricity supply industry, about the relationship between the Board and the Authority. I do not, of course, suggest that the existing arrangements are perfect, but I do not for a moment accept everything the noble Lord has said about them, as indeed I do not think my noble friend Lord Aldington did. Perhaps I might outline some of the problems of these two authorities. The fact is that the two organisations are approaching these problems largely from different angles—which, given their different responsibilities, is natural.
Here perhaps I might emphasise, as did my noble friend Lord Aldington, that the calculations of the unit cost of generating electricity from nuclear power are exceedingly complicated and not entirely uncontroversial. I was very interested, if I may say so, in what I thought was a remarkably powerful speech made by my noble friend on this subject. These calculations have inevitably to be based upon a number of

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assumptions. Changes in one or other of these assumptions, as my noble friend has pointed out, can have a marked effect on the final answer. The period of depreciation has a considerable influence, in view of the high capital cost of these stations. The rate of interest to be assumed on the capital to be invested in the future is of much more importance with nuclear power than with oil or coal stations, again because of their high initial capital cost. Thirdly, technical assumptions have to be made both as to the availability of a nuclear power station for generating electricity over its working life and as to the extent to which the distributing system can make use of this availability. Lastly, assumptions have to be made both in regard to the price of uranium and to the period of time for which the uranium fuel can be burnt in the reactor. The longer the period of burning, the lower the cost of the electricity produced.
In short, my Lords, at the present stage of development, and of the relatively limited experience of nuclear technology, comparisons between the unit cost of electricity generated from nuclear power and from coal or oil fired stations can be made, as my noble friend said, only with a series of "ifs and buts". For oil and coal fired stations the estimated costs of generation are fairly firmly based on extensive past experience, though necessarily subject to some degree of speculation about the future price of coal and oil. But in the case of nuclear power stations the estimated unit cost depends greatly, for the reasons I have given, upon whether more or less favourable assumptions are adopted on each of the factors I have described. Naturally the operators of nuclear power stations carrying commercial responsibility for their construction and operation tend to take the more conservative assumptions. The organisation responsible for research and development equally believes for its part that much more favourable assumptions are justified.
My noble friend Lord Coleraine has referred to the Ministry of Power's acceptance of Sir Christopher Hinton's assumption that the present nuclear power programme will cost the C.E.G.B. an extra £20 million per year. It is evident from what I have just said that any such estimate has to be based on a
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number of assumptions on which very different judgments are possible. As a vital part of the study of the choice of a reactor which was begun last year the Government have been examining the factors to which I have referred in order to see to what extent these views can be reconciled. This is obviously an essential basis for considering the future scale of the nuclear power programme. It is not therefore, as my noble friend Lord Coleraine asserted, the Generating Board which is the arbiter of the nuclear power programme, but the Government.
The announcement made yesterday by the C.E.G.B. of its intentions in regard to the advanced gas-cooled reactor is, of course, subject to the outcome of the Government's consideration and was made, I am confident, to give the consortia an indication of the way in which the Generating Board's own thoughts are moving on this extremely important question. I can assure your Lordships that the Government will give the closest possible attention to the comments and recommendations of the Select Committee on the relationships between the Board and the Authority and of course to the speeches which have been made here this afternoon.
The Select Committee also recommended, in paragraph 405, to which attention has been drawn, that the Co-ordinating Committee, which is advising the Government on the choice of a reactor for the next phase of the nuclear power programme,
"should consider how the additional cost of making power by nuclear means under the present programme should be apportioned between the taxpayer and the electricity consumer."
A number of your Lordships have drawn attention to this recommendation. This is a matter for the Government to decide, and Ministers will of course give most careful consideration to the views of the Select Committee. As matters now stand, both the taxpayer and the consumer are sharing in the costs and in the risks of developing electricity from nuclear power. In view of the uncertainties in determining the costs of electricity so generated, which I have described earlier, there is little prospect that there can be an early decision by the Government which would make a final apportionment of costs between the two.

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A committee under the chairmanship of the late Lord Waverley had observed that the Authority's expenditure would be very heavy and that for many years to come their receipts would be relatively small. It was largely because substantial public funds would be needed to develop the new sources of power that a separate public corporation was set up. If development had been left to industry the expenditure involved and the remoteness of commercial financial return would have meant that the development could have taken place only very slowly, if indeed at all.
My noble friend Lord Coleraine urges the Government, among other things, to set up a Committee of Inquiry to investigate and report on the question of tendering, pricing and contracting. In the Government's view these matters are essentially for negotiation between the Generating Boards and the consortia. In their view there is no need to institute an inquiry into these arrangements. I find it very difficult (without wishing to appear in any way discourteous to my noble friend) to pursue the references that he has made in the course of this debate to the history of the intricate negotiations over the letting of contracts for the building of the station at Wylfa. These negotiations have been taking place over a period of many months and are known in detail only to the two parties concerned, and certainly not in detail to myself.
I think that most of your Lordships will agree with me that the Government should not intervene in what is essentially a commercial negotiation, but I can assure your Lordships that the Generating Board, in the announcement they made yesterday, have had in mind the problems which may be created at Hartlepool by the failure of the United Power Company to secure a contract for Wylfa. I think that Lord Shackleton in a way answered the question put by Lord Stonham. I understand that the Generating Board have made a condition of the order to be placed with the English Electric Group, that it should seek to negotiate with Richardsons Westgarth, Ltd., of Hartlepool with a view to giving that firm a substantial sub-contract. I am told that if necessary the Generating Board will themselves join in these negotiations with a view to ensuring their success.
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My Lords, my noble friend Lord Coleraine, and my noble friend Lord Aldington, made some remarks about the answer given by my right honourable friend the Minister of Power in another place the other day. I understand (and I have spoken to my right honourable friend) that in referring to the high price of the tender submitted by the United Power Company for the Wylfa station, he did not mean "high" in the sense of unreasonably large profits, but "high" in respect of a design which the Generating Board did not much like. As for what has been said about the present Chairman of the Central Electricity Generating Board, who was appointed by my noble friend Lord Mills and subsequently confirmed in office by the present Minister of Power, I would do no more than repeat what has already been said: that he is a most distinguished engineer, with a long and distinguished record of public service. He is a member of a strong, active governing body, the Central Electricity Generating Board. I think it would be recognised by all those with a knowledge of the industry, that the Board have played an outstanding part in the development of the electricity industry in this country.
My Lords, as I told you earlier, the Government are studying what nuclear power programme should be adopted after 1968, and the Minister of Power is very conscious of the importance of the decisions that have to be taken. But, of course, one decision has already been taken—the decision that after 1968 there will be a continuing nuclear power programme. These decisions which are very difficult and very complicated, and involve a very great deal of money, must be made, and a committee has been set up—a committee of inquiry, if you like—to advise on these matters; and I do not think it would be right to rush into decisions without careful thought.
LORD STONHAM: My Lords, would the noble Lord allow me to interrupt him? Is he going to answer the question I put to him about the Select Committee's recommendation for the appointment of an independent arbitrator to look into pricing and contracting arrangements? He has advised the House to reject the request by the noble Lord for a Committee of Inquiry. What about the proposal for an independent arbitrator?
LORD CARRINGTON: This, again, is one of the recommendations of the Select Committee which my right honourable friend will look into very carefully. But the noble Lord will realise that this Report has not long been published, and I think we must give my right honourable friend a certain amount of time to study it. I can say that the Government will give the most careful attention not only to what the Select Committee has reported, but also to what has been said by your Lordships this afternoon. I have no doubt, too, that the members of the Powell Committee, the Committee of Inquiry, will read the debate with great care.
So, my Lords, I hope that you are convinced that in point of fact the Government have already set up a Committee of Inquiry—set it up a year ago before this debate, and before the Select Committee reported. And since this Committee will be going into almost all the problems which have been worrying your Lordships this afternoon, I hope that my noble friend will find it possible to withdraw his Motion.
LORD COLERAINE: My Lords, may I ask my noble friend what are the terms of reference of the Powell Committee?
LORD CARRINGTON: I could not give them offhand. It has never been officially acknowledged, and it has never been publicly stated what the terms of reference are. I do not have them with me, but I can assure my noble friend that they are very comprehensive.
LORD ALDINGTON: My Lords, may I refer my noble friend to what he said about prices? Should I be right in saying that his discussion with his right honourable friend the Minister of Power took place before my speech this afternoon, and would he do me the kindness of passing on to the Minister of Power the points that I made? These damaging statements about high prices, made without comparing like with like, do great harm in international trade; and, if my noble friend will be kind enough to insist on a like-with-like comparison, I think he will be ready to withdraw his observation about the height of the prices.
LORD CARRINGTON: My noble friend is quite right: my talk with the Minister of Power did take place before
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my noble friend's speech. I do not think that it is really necessary for me to talk very loudly for my right honourable friend the Minister of Power to hear what my noble friend behind me has said.
LORD HAWKE: My Lords, could my noble friend confirm one thing which he said, which seemed to be most important; that is, that as a result of cuts in capital expenditure there has been no appreciable diminution of generating capacity? That is most important; and it means that any power cuts next winter fall fair and square on the Central Electricity Generating Board.
LORD CARRINGTON: Yes, my Lords, that is what I said.
6.56 p.m.
VISCOUNT HAILSHAM: My Lords, perhaps it is not for me to add anything to what my noble friend Lord Carrington has said, except personally to thank him for having undertaken to answer this debate, and to repeat my apologies to the House for not having done so myself—not because I could have done it any better, but because I should have been, I think, the appropriate Minister, from the point of view of nuclear power, to reply to your Lordships' debate. I should very much like to do so, because, so far as I remember, we have not previously had a debate on nuclear power in this House; and I should very much welcome any further debates on this subject that we might have. I can only explain to the House that my programme—I had intended to reply to this debate—was completely disrupted by the preparations for my Moscow visit, and I had at a relatively late time to ask my noble friend, an Assistant Deputy Leader, to take the debate for me. I hope, therefore, that the House will accept my explanation for what I think was an omission on my part which would otherwise have caused just criticism.
My Lords, I should like just to say a word or two personally, perhaps, to my noble friend below the gangway who initiated the debate, which I hope may help him to take the course that my noble friend Lord Carrington has asked him to take. Of course we cannot in this debate go into the kind of criticism which the noble Lord, Lord Stonham, was making about forecasting on the general energy programme. This is essentially

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a Motion about nuclear power, and it would be inappropriate to enter into that kind of discussion. Moreover, although I make absolutely no criticism of my noble friend for having either initiated the debate or taken the particular line in relation to the Wylfa contract which he did take, I would ask him, on the whole, to accept, as my noble friend Lord Carrington said to him, that although many of us, or some of us at any rate, have made it our business to try to ascertain what are the statements made by both sides in relation to it, it would be extremely difficult either for this House, or indeed for the Government, to drag out into public the full account of these negotiations without a request from the parties to the negotiations.
This is not, my Lords, because the Government do not accept responsibility for the investment of what must be about £100 million of public money—I fully accept that—but because, in relation to a commercial negotiation, there are limits, I think, to the extent to which the Government would be right either to reveal or to elicit facts in a commercial negotiation, without a request from the parties thereto. As your Lordships have heard this afternoon both from the noble Lord, Lord Geddes of Epsom, on the one side (and although it is not perhaps quite usual for members of public Boards to speak, I am very glad he did so, and I thought that he exercised his discretion in this case very wisely, and the House was very glad to hear him) and from my noble friend Lord Aldington, on the other, there has, I think, been a marked reluctance to discuss these particularly intimate matters in public at this stage—although, of course, it may well be that this will happen at a later stage. I hope, therefore, that the House, and my noble friend, will feel the same as I do about that side of the matter.
As regards the future of nuclear power, I myself have complete confidence in it. I was immensely impressed with the speech of my noble friend Lord Aldington, but, of course, it does not really depend upon the acceptance of his figures, powerful as they were, because these are figures based on the Magnox stations, which are already in commission—and one thing I think we are all quite clear about is that, whatever may be the value of that argument,
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the more advanced reactors of the future are going to be commercially much more attractive. Therefore, I think that the fact that he has given such powerful arguments in favour of the competitiveness of existing reactors of the Magnox type gives us every reason to be certain that the future is much more rosy than that which he paints, even of the existing reactors.
Now as regards the need for an inquiry into the economics of nuclear power, I fully accept this. The problem of the relationship between the Authority and the Generating Board in fact made a great impression upon me eighteen months or two years ago, and I think at that time there were considerable reasons for at any rate concern. These I took up with my right honourable friend the Minister of Power, and I think I can say that there has been a very marked improvement in the situation. I think, on paper, the arrangements are about as good as we can make them at the present time; and although I was, eighteen months ago, very much concerned at the divergence of opinion which was beginning to emerge between the Authority and the Generating Board (sometimes, I think, unwisely allowed to emerge in public speeches, as to some of which it would have been better had they not been made), the step I took with my right honourable friend and with the consent of my colleagues was to set up this Powell Committee. Although, like my noble friend, I should not like to recite its terms of reference, broadly speaking it is designed to reconcile the differences of view which are quite legitimately held about the economics of nuclear and of conventional power, and about, to some extent, the economics of particular types of reactor.
As regards the future of particular types of reactor, the House will not have failed to notice that we opened our prototype of the advanced gas-cooled reactor only two weeks ago at Windscale. Obviously, with a totally new technology you cannot give a definitive answer to the future orders for a reactor type until a prototype has been on load for a reasonable period of time. I have made it my business to advance as far as I could the progress of the advanced gas-cooled reactor, in which I believe, and I think the Central Electricity Generating Board

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could not have gone much further than they did in their announcement of their intentions two days ago on that field, at any rate before there was a little more experience of the way the thing works. As I say, I personally have great confidence in it, but I think it is perfectly right that the Central Electricity Generating Board should see an ounce of practice as well as a pound of theory. Therefore, my Lords, I think it is inevitable that we should postpone judgment, at any rate until the Powell Committee have reported on the general question of economics and on the particular reactor, until we have a little more experience of that.
Obviously, too, Dounreay will have a very marked bearing on the economics of nuclear power in the future, not only because one has great hopes of the breeder factor in the fast reactor, but also because the ability of the reactor (if it proves to be the case) to burn plutonium, which is a necessary by-product of all the uranium reactors, is going to be a most important factor in the economics of electricity generation by this method. We had the experimental reactor, which I think has had its earlier troubles but which is now doing very well, and we will, if the Government think it right and if the technical omens are propitious, in due course seek to authorise a prototype fast reactor which will enable us to have a larger scale experience of that. I do not think we can look further into the future than that; but I do not consider that at this stage, apart from the terms of reference of the Powell Committee, which deal with the absolutely crucial question of economics as between conventional and nuclear power and as between reactor types, a formal inquiry would be the way to approach the problem.
I am sorry to have spoken so sketchily and at the end of the debate, for the reasons I have stated, but I have personally derived a great deal of benefit from the speeches which have been made, and I am quite sure my right honourable friend the Minister of Power will take into account all that has been said in framing his future policy.
7.6 p.m.
LORD COLERAINE: My Lords, I must, I think, feel flattered that two such powerful sledge-hammers have been put
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into use to smash so modest a nut as myself, and I cannot take any exception to the manner in which they have spoken to my Motion. I should also like to thank those other noble Lords who have spoken in this debate. Not everyone who has spoken has agreed with me. Some of those who have spoken thought that I was misguided, but no one said anything to which I could possibly take any offence.
The Lord President and the First Lord have told us a little more than we knew before of the Powell Committee. Certainly, though it was not quite the kind of Committee I was looking for, I think it will cover some of the points to which I directed attention, but it does not cover them all. My noble friend Lord Mills, in the speech which he made, indirectly, I think, rebuking me, said that it would be wrong and absurd to have an inquiry every time a contractor failed to get an order. Of course it would be absurd; but it seemed to me at the time when I was speaking that what I told your Lordships about the course of the Wylfa negotiations made your Lordships feel that something was not altogether right, as I certainly believe myself. The circumstances of the Wylfa negotiations were so exceptional—the agreement to negotiate in the first place, the background for the negotiations, the course of the negotiations and then the result, the double result—that I felt, and still feel, that some inquiry is justified.
My noble friend the First Lord said that it was impossible for the Government in any way to interfere in what was essentially a commercial negotiation. That, to some extent, I think, is question begging, because when we are dealing with this field of nuclear energy it is not essentially commercial in the ordinary sense of the word. Other things come into it besides the provision of cheap power. What comes into it is the maintenance of an engineering industry that will be able to cope with nuclear power in five or ten years' time, when it really will come into its own. That is not a commercial consideration, and yet it is a very important consideration. What comes into it is the effect on the export trade for the nation and the engineering industry as a whole. A lot of things come into it that do not come into ordinary commercial negotiations, including

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the question of unemployment on the North-East coast. Although I may be wrong, it seems to me very remarkable if this concession, which I wholeheartedly approve and hope will be honoured, to Richardsons Westgarth, Ltd., in consideration of the unemployment on the North-East coast, was not given for political reasons. I should be surprised—and your Lordships will correct me if I am wrong—if no communication has been made to Sir Christopher Hinton or the Board on this subject.
VISCOUNT HAILSHAM: My Lords, I do not think I can refrain from answering that until I have given it consideration. As my noble friend probably knows, a number of communications were made to me; and although I do not communicate direct with Sir Christopher Hinton, owing to the nature of the Portfolios I hold, I made it known to my colleagues in the Government. I cannot say whether or not, or how far, this may have influenced the Board in their decision. I have no reason to suppose it did. Equally, I cannot assure noble Lords that it did not.
LORD COLERAINE: My Lords, I would think it is fair to assume that representations were made; in other words, to assume that the Government did interfere in an ordinary commercial transaction—which this was not. I do not see why they cannot equally interfere, not to reverse the decision that was come to about Wylfa, but to inquire into the accuracy of what I have said. And when I say "inquire", I mean inquire not merely into the position of Sir Christopher Hinton and the Board, but inquire into the matter from both sides: the Atomic Energy Authority and everybody else who could throw light en the subject. If my noble Leader would tell me that he would consider such a proposal I should be glad to withdraw my Motion.
VISCOUNT HAILSHAM: I am grateful to my noble friend. The point is this. Clearly, at the present stage the board of the C.E.G.B. have announced their decision, as a board, to ask for tenders from English Electric for both reactors (this has been announced, so far as I am aware), and to ask for tenders at a later stage, subject to certain conditions,
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for advanced gas-cooled reactors. I am bound to tell my noble friend that, though I suppose this did not enter into it, the advice I have received from the Authority is that they think, on the whole, that this is in the public interest from the point of view of simply giving the public the electricity supply it requires. I quite understand that this is not conclusive of the matter.
LORD COLERAINE: My Lords, forgive me, I did not follow. What is in the public interest?
VISCOUNT HAILSHAM: That the two reactors should be built by a single company at Wylfa; and that, having regard to the peculiar circumstances of the case, it is appropriate to place the contract where the Board propose to place it.
I realise that these are not the only considerations which ought to actuate either the Board or the Government. How far the Government would be justified, under the terms of the relationships which govern the Government and the nationalised Boards, in overriding a decision of the Board in that respect I am not myself at this moment absolutely clear. Obviously, it must depend, at least in part, upon such representation as the U.P.C. want to make, both to the Board in the first place—presumably, they are in contact with the Board—and, secondly, if they are not satisfied with what they get from the Board, to the Government. I would accept that my right honourable friend must take such representations into account in deciding what his own attitude would be. What has been announced is the decision of the Board, not the decision of the Government. Although I am not at all clear, nor can I promise, that my right honourable friend will not say at the end of it all that he must support the Board on principle, from his constitutional position, I am quite sure he would wish to take into account before coming to a conclusion any representations the U.P.C. might wish to make that they have been hardly or unjustly treated. And they might influence his mind as to whether that conclusion was the right one.
LORD COLERAINE: My Lords, I must thank my noble friend for being so explicit. Although I have nothing now to do with these matters, I hope that the U.P.C. will make representations.

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I hope that the Minister will meet them; that he will, if representations are made, seek to check them; and I hope the Minister and the Government will realise that if they allow this consortium to collapse, it will not only be the members and staff of the consortium who will suffer. I think the whole wide nexus of misfortune will spread from the slowing down of power stations in this country to their slowing down abroad and so on. If the U.P.C. do make these representations, I hope that the Minister will take them with very great seriousness indeed and chock what is said.
Had it not been such a late hour, I think, in spite of the kindness of my noble friend, that I should not have been willing to withdraw my Motion. But I feel that if I were to put it to the vote now it would not be a representative vote. And we should not really be any further forward. I still wish there could be an inquiry; but in view of the lateness of the hour and of what has been said about the U.P.C. and their functions, and in the light of the slender hope which my noble friend has held out, I ask your Lordships' leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

LOCAL AUTHORITIES (LAND) BILL
House in Committee (according to Order).
House resumed: Bill reported without amendment; Report received.

ANIMAL BOARDING ESTABLISHMENTS BILL
7.20 p.m.
Order of the Day for the Third Reading read.
LORD AMULREE: My Lords, before I move formally that this Bill be now read a third time there are two points that I should like to raise. Two questions were put to me on Committee stage by the noble Lord, Lord Saltoun, which I was not able to reply to then. The first question can now be answered. A local authority cannot itself cancel a licence granted for boarding animals, but a court can, upon conviction, withdraw a licence or, if it thinks fit, can disqualify the holder from applying for or holding a licence again.
The second point which the noble Lord raised was whether cats and dogs which were being transported for export by British airways or by the British Transport Commission were covered by any legislation if they were suffering unnecessarily. I am informed that the Protection of Animals Act, 1911, affords complete protection for them if proceedings are brought under it. I think that disposes of the two questions put by the noble Lord. It only remains for me to thank Her Majesty's Government and the noble Marquess, Lord Lothian, for the kindness they have afforded me in getting this Bill prepared and to thank the officials of the Home Office for the good work they have done in supplying me with material. I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a—(Lord Amulree.)
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

WILLS BILL
Report of the Amendment received (according to Order).
House adjourned at twenty-four minutes past seven o'clock.