HL Deb 10 June 1964 vol 258 cc894-904

3.15 p.m.

LORD COLERAINE

rose, to call attention to the White Paper entitled The Second Nuclear Power Programme (Cmnd. 2335); and to move for Papers. The noble Lord said: My Lords, nearly a year ago, to be exact eleven months ago to the day, I opened a debate on nuclear power at I am afraid inordinate length. I hope this afternoon that I shall not trespass upon your Lordships' patience and kindness as I did on that occasion, and certainly I have no intention whatever of traversing again the ground I covered then. So far as I am concerned, all of that is water over the dam.

Your Lordships may remember, however, that the two noble Lords who wound up the debate for the Government successively made great play with a mysterious body called the Powell Committee, of which the membership was hidden, of which the terms of reference were secret, but which was to dispel, when it reported to the Government, all the doubts which that afternoon troubled your Lordships. The Committee has now reported to the Government and the conclusions of the Committee, or at any rate the Government's view of those conclusions, have been released in the White Paper, The Second Nuclear Power Programme. The Powell Committee deliberated for something upwards of three years, and I cannot help feeling that so monstrous a gestation can rarely have produced so very insignificant and puny an infant as this. Unfortunately the infant may grow in size to become a very dangerous adult.

In the debate to which I have referred my right honourable friend (as he now is), the Lord President of the Council, explained that while he could not give the terms of reference of the Powell Committee he could explain why it had been set up; and he told us that it had been set up, broadly speaking, to reconcile differences—that is differences between two nationalised authorities, the United Kingdom Atomic Energy and the Central Electricity Generating Board—on the economics of nuclear power in general, and in particular on the economics of different reactor systems. I am afraid that the purposes which the Lord President had in mind have not been realised, because the White Paper does nothing to reconcile those differences; it only re-states them.

I do not this afternoon want to go into the whole field of the gulf, which has been wide and deep, between the Atomic Energy Authority, on the one hand, and the Generating Board, on the other. I want just to concentrate on this question of the type of reactor which is to succeed the existing Magnox reactor, which is embodied in the nine nuclear power stations now either in operation or in course of erection. As your Lordships probably know, the Atomic Energy Authority strongly favoured its own Advanced Gas-Cooled Reactor—commonly known as the "A.G.R.". The Generating Board wanted to import under licence an American design of water-moderated reactor. The White Paper has something to say for both. It says that the A.G.R. is a most promising development; it says that perhaps the water-moderated reactor is promising, too; and it comes to the conclusion that the Generating Board should be allowed to shop around for both. That may sound like a judgment of Solomon. It is not a judgment of Solomon; it is the judgment of Tom Fool, because nothing could create more uncertainty, cause more delay, add more Greatly to the confusion which already exists in the nuclear industry than the proposals outlined in the White Paper.

I would ask your Lordships to refer just for a moment to paragraph 6 of the White Paper which deals particularly with this matter. Paragraph 6 tells us that The Central Electricity Generating Board will issue an inquiry for tenders for an Advanced Gas-Cooled Reactor station. They will also be ready to consider tenders from British industry for water-moderated reactor systems of proved design. I should like your Lordships to notice the words "water-moderated reactor systems of approved design", because that means of American design or, it might be, Canadian design. It cannot mean of British design, because there is no water-moderated reactor that I know of proved design in this country. The implications of that seem to me to be immensely serious, and if your Lordships will allow me I will develop them a little later. However, the Board is to receive tenders for both systems. Then, the final line of paragraph 6 says: They will ensure that these tenders are judged on a comparable basis. That is a far more difficult point than it seems on the surface. On the surface, it seems perfectly reasonable: if you are to compare the merits of one system with another, then obviously they must be judged on a comparable basis. What worries me—and it worries me deeply—is that, as things are going, I do not believe that they will be judged on a comparable basis. I do not believe that they can be judged on a comparable basis. I think that the Generating Board, perhaps for technical reasons which seem good to it but which are certainly not good and sufficient, is already "loading the dice" against the British A.G.R. and in favour of the American water reactor.

The Generating Board either has issued or has declared its intention to issue an inquiry for an A.G.R. with a net output of around 460 megawatts. The designed output of the American water-moderated reactor, the reactor of proved design, is of 600 megawatts. So unless the Government take some action, we are going to be faced with the position in which somebody will have to compare the merits of a station with an output of 460 megawatts with one with an output of 600 megawatts. In this field as we all know, efficiency and economy are so much a function of science. The higher the output, the more efficient and the more economic; the lower the output, the less efficient and the less economic. So that if comparison is to be made between an A.G.R. of 460 megawatts output and an American reactor of 600 megawatts output, the American reactor is almost bound to win.

I should like to ask my noble friend who is going to reply for the Government, this question: can he give the House an assurance that, when this comparison between the two types of reactor is made, it will he between two reactors having the same output? Unless he can give that assurance, the undertaking in the White Paper is meaningless and, I think, quite definitely misleading.

It seems to me that there arc two questions which we ought to ask ourselves arising out of the proposal to import an American design. The first question is this: why has the Generating Board been pressing so strongly for an American design rather than a British design? I suppose that the answer is, and can only be, that the American design is considered to be more economic. It is difficult to prove, because so far no big nuclear power station is in operation in the United States. But there is a strong presumption (to put it at its lowest) that American types of water reactors are far more economic than any Magnox reactor which has been proved in practice in this country. That presumption is based on the fact that American electricity supply undertakings are ordering nuclear power stations in quite considerable quantities. The nuclear programme there is now about comparable in size to ours here—and not on any highfalutin grounds of national purpose, but simply on cold calculations of profit and loss: in other words, in the United States nuclear power is already competitive with conventional power. It is not so competitive here.

That brings me to the second question which I think we should ask ourselves. Ten years ago—even five years ago—we had a commanding lead in this field. Now we have lost it to the United States, and lost it handsomely. What is the difference? What is it that has produced these great economies of scale, this greater degree of efficiency, in the nuclear industry in the United States, compared with that in this country? I do not believe that it is the fault of the manufacturer in this country, nor do I believe it is the fault of our nuclear physicists. I believe that the fault lies in the organisation of the nuclear programme, which is far less efficiently organised in this country than it is in the United States.

Let me explain what I mean. In this country the design of a nuclear power station is virtually dictated by the Generating Board. In the United States the design is left to the manufacturer so that he can make the best use of his own plant, his own skills and techniques to get the most economical methods of production. What I mean can be most vividly expressed by an example of the differences in the method of tendering. When the Central Jersey Light and Power Company issued an inquiry for a nuclear power station at Oyster Creek, New Jersey, the inquiry was contained in three sheets of notepaper. When the Generating Board issues an inquiry it is contained in five volumes, each of them an inch thick. That shows pretty concisely the difference between the two methods of approaching the problem.

There is another difference. There has been no dramatic breakthrough in nuclear technology in the United States. The water-moderated reactor is substantially the same animal as it was ten years ago; it is bigger in size, just as Wylfa is bigger than Bradwell in size, but it is essentially the same animal. What the Americans have done is to use the design they have got to the full and to repeat station after station to the same design. The result of that, of course, is that they get the economies of scale-production, almost, one might say, mass production, and costs come down. Not only do costs come down, but with experience the design becomes more efficient. That has not happened in this country. In this country every new power station has been a one-off job, because the Generating Board has insisted that each new power station must represent a technical advance on its predecessor and must be a new design. Each power station carries an enormous load of research and development charges, which again add greatly to the cost.

There is still another reason for the difference in the United States. In the United States private industry has made a vast capital investment in the development of new plant simply to get more economical production of reactors and more efficient reactors. I know of one company which invested more than 10 million dollars simply to fabricate a larger pressure vessel than had been fabricated hitherto. The American company can do that because they know that if they get the price right, if they guarantee the required output and if they satisfy the Atomic Energy Commission on safety requirements, they will get the order. In this country no firm knows that. The price can be right, the output can be right, the Atomic Energy Authority may be satisfied with safety regulations; but because somebody or other somewhere or other dislikes the look of the design the firm does not get the order. If any British firms invested in nuclear power on the same kind of scale as firms do in the United States it would go bankrupt and the directors would go to jail or, more probably, to a lunatic asylum.

I have referred to the implications of ordering an American reactor system. There has been a lot of talk—most of it idle, foolish talk—in the last few days about the wickedness of the Chrysler Corporation taking an interest in Rootes. I do not myself think that it was wicked. I feel that it was entirely sensible. But even if it was wicked, it was a very minor wickedness. It was only an American firm getting a minority shareholding in one element in the motor industry. This proposal is different indeed. It means that American technology will in fact control the whole of the nuclear industry in this country. It means that we are in effect opting out of the nuclear industry, and I cannot believe that that is a good thing to do. It is not even as if British firms here, which will have to manufacture under licence from American firms, were going to operate under licences from the United States Government or the Atomic Energy Commission in the United States. That would be one thing and might be tolerable, but that is not what is going to happen. They will have to operate under licences granted by commercial firms in the United States, firms which are fiercely competitive with British industry in every part of the world.

I should like to ask my noble friend this question. If these licences are granted by American firms, will they cover export markets as well as the United Kingdom market? I very much doubt if they will. Even if they did cover the United Kingdom export markets, I would very much doubt whether American firms would go far out of their way to help British industry to compete with them in the export markets of the world. No doubt, if this proposal goes through, we shall he taught how to make the American type of reactor, but it will be only the existing type of reactor, which is already obsolescent. American industry is already feeling ahead to the next type, and I would think it is far too much to believe that American commercial firms, in competition with firms in this country, are going to let us into the secrets of the future. For my own part, I just do not believe it. If, therefore, this proposal is carried through and we import American designs, at best the British nuclear industry will be a kind of Chinese copyist and will for ever be a lap behind the Americans.

My Lords, in spite of the smooth words at the beginning of the White Paper, I think we are bound to admit that the nuclear programme in this country has failed. If it has not failed, how can there be any question whatever of importing American designs in preference to British designs? As I say, I do not believe that that failure is to be laid at the door of the heavy engineering industry in this country, or at the door of British science. It is simply a matter of organisation, and I suggest to the Government that we must take a good hard look at the organisation of the nuclear programme as it has been till now, and, in particular, take a good hard look at the position of the Generating Board in all this.

Why is it that the Generating Board has been pressing for a policy which so clearly seems to run counter to British interests, which is bound to weaken the nuclear industry here, and which is bound to destroy our export potential? —an export potential which in ten years' or even five years' time may be very great indeed. I think the answer is that there is inside the Generating Board a conflict that cannot be reconciled. I do not mean a conflict of views or a conflict of personalities; I mean a conflict of function. It is the function of the Generating Board to provide the consumer in this country with adequate suppliers of cheap electricity, and it seems to me that that function cannot conceivably be combined with pioneering a new, a highly expensive and a highly complex industry. I think it just cannot be done.

Let us look for a moment at the area of this conflict. The development of any new reactor system entails an immense expenditure on research and development. That is inevitable and it is not something to be afraid of, because unless you make that expenditure you are not going to make any progress whatsoever. But as things are now, that expenditure is paid for by the consumer of electricity, and, therefore, the Board as an entity is divided between safeguarding the interests of the consumer of electricity and promoting this new and very expensive development. That is why the Chairman of the Generating Board, in his evidence to the Select Committee, suggested that the taxpayer should subsidise the Board because of this added expense. That, I should have thought, was an entirely valid suggestion, although it carries with it the corollary that if the Board no longer pays the piper, it is no longer entitled to call the tune.

Then there is the question of export markets to which I have already referred. The Generating Board has no concern with the export markets. Its concern is cheap electricity in this country, and in furtherance of that purpose it wants to use American designs of reactors, even if that destroys any hope we have of developing a worthwhile export trade in this heavy engineering field. From the constitutional point of view the Generating Board is absolutely right. That is its job—to get cheap electricity. But from the national point of view it must surely be very wrong indeed.

Then there is the question of the Generating Board and the effect of its activities on industry, and particularly on the heavy engineering industry. In ten years' or five years' time I think it is as certain as anything can be that we shall not be able to meet the electricity demand in this country without a massive development of the nuclear programme. But in ten years' or five years' time what is going to happen to the nuclear industry, when we are ready to call on it and when we must call on it? I do not see how a healthy nuclear industry can conceivably survive simply on the basis of copying designs. I do not see how, on that basis, you are going to hold together the very brilliant teams that the consortia now have. We talk about the "brain drain". If there is one way of stimulating the "brain drain", I suggest that the proposals in the White Paper are that.

It seems to me, my Lords, that there is this conflict within the Board; a kind of schizophrenia for which it is not responsible. It seems to me there is only one escape from the dilemma, and that is that all responsibility for the pioneering of commercial reactor systems should be taken away from the Generating Board. Unless you do this, I do not see how you are going to avoid this conflict and escape the dilemma which I have tried to describe.

When the nuclear programme was first started ten years ago, the idea was that the Atomic Energy Authority should develop the new system and the Generating Board should own and operate it. Unfortunately, nobody ever defined where development ended and where ordinary commercial operation began; and that has been one of the great difficulties. But because that has been the pattern, we have, all of us, tended to assume—I think unnecessarily—that the Generating Board must operate all and every generating station, whether nuclear or conventional, that supplies power to the consumer. But there is no reason why this should be so. There is no reason why the Generating Board should not buy electricity from somewhere else and sell it to the consumer. Indeed, that is what it does now. It buys electricity from the Atomic Energy Authority, from their pilot plants, and in the aggregate it must be a considerable amount of electricity. It buys electricity, I think, from France at peak hours. There is no difficulty, constitutional or practical, or of any other sort, in the Board's buying some electricity instead of generating it.

I should like to make a suggestion to your Lordships and to the Government, and I hope that the Government may consider it seriously, though I cannot imagine that my noble friend will be able to give me a considered reply. The suggestion is this. Why do we not in this country adopt the system which is used in Canada? In Canada the Government build the first commercial type of a new series of reactors. The Government operate it until it is proved, and then the Government sell it to the undertaker, not at an economic price but at the same price that the supply undertaking would have to pay for a conventional power station, allowing for the lesser running costs of a nuclear power station. Is there any reason, my Lords, why we should not adopt the same system here? Let us have the Atomic Energy Authority carry on development until the first commercial station is in operation and is proved; then it can sell it to the Generating Board at a price which would meet the subsidy for which the Chairman of the Generating Board asked. The Generating Board could then repeat the same design, with all the consequent economies, until the next new power system came along.

I cannot see why that system should not operate here; and if it were to operate here, it would have immense advantages. In the first place, it would end this feud, which really has bedevilled the nuclear programme, between these two nationalised Authorities. In the second place, it would fix responsibility firmly upon one pair of shoulders. As things are now, if the Magnox station has not fulfilled everyone's hopes it is possible for the Board to say, "That is because the original conception was wrong", and for the Authority to say, "That is because the execution of the programme was mismanaged", Under my proposal, on the other hand, respon- sibility would be definitely fixed on one pair of shoulders, and that, I think, would be a tremendous advantage. This is the only way that I can see whereby we can escape from the dilemma, presented by the Generating Board as it is to-day, of their carrying these two functions of generating cheap power and developing new and highly expensive pioneer systems of power generation. It is the only way I can see in which we can escape from that dilemma.

My Lords, I do not think I have exaggerated the dangers of this proposal to import American designs. It is surely folly and defeatism, after all the millions of pounds of public money—and, indeed, the millions of private money—that have been poured into research and development here, to accept the position that we are incapable of original work ourselves and can only follow the American lead. I would ask the Government most earnestly to think again about this proposal, to think afresh about the whole organisation of the nuclear programme, and to see whether we cannot make a greater success of the second nuclear power programme than we have of the first. My Lords, I beg to move for Papers.