§ 6.14 p.m.
§ Debate resumed.
§ LORD SHACKLETONMy 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 1435 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 1436 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 ALDINGTONMy 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 SHACKLETONThe 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 1437 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 1438 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 HAILSHAMMy 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- 1440 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 STONHAMMy 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 CARRINGTONThe noble Lord was extremely critical of what 1442 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 1443 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 1444 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 1445 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 1446 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.1447 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.
1448 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 STONHAMMy 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 CARRINGTONThis, 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 COLERAINEMy Lords, may I ask my noble friend what are the terms of reference of the Powell Committee?
§ LORD CARRINGTONI 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 ALDINGTONMy 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 CARRINGTONMy noble friend is quite right: my talk with the Minister of Power did take place before 1450 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 HAWKEMy 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 CARRINGTONYes, my Lords, that is what I said.
§ 6.56 p.m.
§ VISCOUNT HAILSHAMMy 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 1451 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, 1452 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 1453 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 COLERAINEMy Lords, I must, I think, feel flattered that two such powerful sledge-hammers have been put 1454 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 1455 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 HAILSHAMMy 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 COLERAINEMy 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 HAILSHAMI 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, 1456 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 COLERAINEMy Lords, forgive me, I did not follow. What is in the public interest?
§ VISCOUNT HAILSHAMThat 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 COLERAINEMy 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. 1457 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.