HL Deb 09 December 1974 vol 355 cc412-21

3.1 p.m.

The Earl of LAUDERDALE rose to move, That this House takes note of the Fifth Report of the Select Committee (Session 1974) and the Third Report of the Select Committee of this Session on a new energy policy strategy for the European Communities (R/1472/74). The noble Earl said: My Lords, I beg to move the Motion standing in my name on the Order Paper. The two references therein are to one document which was studied by successive sub-committees of your Lordships' Select Committee on European Proposals on two occasions and, if I may briefly explain, the Third Report from the Select Committee in the current Parliament and Session relating to Annexes to the previous subject matter, giving the "teeth", as one might say, to the policy there propounded. If I may ask the indulgence of the House straight away, I should like to explain a slight misprint that has crept into the Third Report from the Select Committee (that is, the current one relating to these Annexes), due entirely to faulty handwriting on my own part. Perhaps those of your Lordships who have the document in their hands will be good enough to look at page 3 of the Report where they will see that in Annex II under the heading "Timetable", it states that the document is "unlikely to be adopted in any form" at the forthcoming meeting of the Council. The phrase should read: "in its present form".

My Lords, may I start with a tribute to the noble Lord, Lord Champion, who presided over the sub-committee that produced during the last Parliament the principal Report now before the House. He chaired that sub-committee, if I may say so as one who sat at his feet, with the quiet aplomb and distinction that we expect from him; and, without seeking to break the rules of discretion by suggesting who was the source of which particular telling phrase, may I invite your Lordships to look at Question and Answer No. 103 in the Minutes of Evidence where it will be seen that the noble Lord, Lord Champion, put his finger on the whole matter at the end of our hearing of evidence and elicited the short point that Europe wants the energy and Britain has it. It is in that context that he set the framework of our Report in terms, as one might say, of Real-politik. I have been invited to move this Motion simply because I happen to be the chairman of the successor subcommittee appointed by your Lordships in the present Parliament; and may I say that I propose to be as neutral and sparing of controversy as your Lordships would expect of me.

My Lords, the Member of Parliament for my constituency, Berwick and East Lothian, canvassing one day, visited a stately home—not my own—and announced himself as the local Socialist Member of Parliament. The butler who answered the door bell said, "My Lord is non-political. I am chairman of the Conservative Association. You might find some support in the kitchen." In my non-political role, as chairman of this subcommittee, I shall do my best to approach the matter in an anodyne and peaceful fashion. This debate is not an exercise in "bashing" the European Community; this is not a crusade against the well-fortified pornography of power. As to the substance of our Report, noble Lords will have different views and will express them in different ways. If I may, I will submit to your Lordships that we need straight away to draw a critical distinction between vetting any proposals that the European Commission put up to the Council in order to discover (whatever our viewpoint may be) whether any points raise matters of policy or principle; and the quite different operation of eliciting the British Government's view upon them. I think a sort of warning on this occasion would be to beware of any "pop thinking" on energy to which they might be tempted.

My Lords, the Motion I move invites the House to take note; and, included in "the House", is the Government Front Bench. We therefore invite the Government as well as the House to take note both of the Reports and of the views of your Lordships' House upon them. There will be little point in this operation unless in due time Her Majesty's Government confirm to the House the assurance already given in another place, that the Government will not take part in the endorsement of Council decisions before there has been a Parliamentary debate on matters which the Select Committee refer to your Lordships' House for debate. We shall look for an unequivocal assurance on that count.

Briefly, my Lords, the sub-committee found several matters of note. The first of these was that the Community Commission propose a supranational energy agency with (I quote) "legal personality and financial autonomy "under the control of the Commission—something which on the face of it we, as a sub-committee of your Lordships' Select Committee, judged would seem to threaten United Kingdom sovereignty. It raises a fundamental issue between harmonisation in the sense of a guide to the formulation of national policies, between harmonisation of national energy policies still kept under national control, on the one hand; and, on the other hand, the pooling of sovereignty in an area which is critical to the economic and social organisation of our society.

My Lords, the Annexes point in the direction of this second interpretation in the sense that Annex I relates to the use of natural gas in power stations and proposes, so the Commission suggests, that its use should have to be justified subsequently to the Commission; Annex II applies almost the same requirement in the case of the use of oil in power stations, this time not requiring the term "justification", but admittedly under the surveillance of the European Communities Commission; and Annex III relates to the exports of oil and natural gas from Britain to countries outside the Community. This would be subject to the Commission's approval.

My Lords, those of us who have been trying to catch up with the subject in recent months and days were much educated by a speech given in Oxford last week by M. Simonet, the Commissioner who is particularly concerned with energy. He seemed to point in a slightly different direction when he promised that under the Commission's energy programme Britain would always retain full sovereign rights to determine the rate of exploration and production. He insisted, however, that an effective energy policy in Europe could not simply be limited to, as he put it: a simple sum of narrowly based national policies",

So much for the supranational energy Commission which the Commission proposed in this document. The document then goes on to propose a series of answers to the general problems of likely shortage of energy coupled with the high cost of the importation of crude oil from the Middle East. The Commission proposed that the Community's nuclear power programme should be expanded during the next 10 years in the sense of raising nuclear power station generation capacity more than 18½rom a total capacity of 12 gigawatts to 200 gigawatts. For those of your Lordships who are unfamiliar with that term, may I say that a gigawatt is a very big watt.

Witnesses from whom we heard expressed no fewer than nine times doubt about the difficulties and risks of such an expansion programme. They did so in reply to our persistent questioning, and if your Lordships would care to look at question and answer No. 55 in the Minutes of Evidence it will be seen that witnesses expressed doubts as to the desirability of this programme, even as an oil saver and even supposing the engineering and safety questions were settled. Perhaps it is not inappropriate to remind your Lordships that a Working Party set up by CEC—the Committee for Environmental Conservation, to which it may be that your Lordships will wish to refer later in this debate—under the heading, "Energy and the Environment", drew the public's attention in July 1974 to a very serious relationship between scale of nuclear power generation and inherent risk. It warned that a 1,000 megawatt nuclear plant in a single year produces and, normally, one would hope, contains, 1,000 times as much radioactive material as the Hiroshima bomb. On the other hand, I personally have heard Commission officials say that nuclear power—I refer now to officials who are concerned in the power programme and who are knowledgeable about it—is no more polluting than are large coal-fired power stations because radioactivity also comes from coal. I have also heard them argue that the hazards in this programme are no worse than the accepted risks of trunk road transport.

My Lords, that may or may not be so, and my purpose now is not to draw direct conclusions about the merits of the programme but to draw attention to our Report on it. However, we did make one interesting discovery. Perhaps I may remind your Lordships of an 18th century prospectus of around the time of the South Sea Bubble which invited persons to subscribe to: An undertaking of great advantage but none to know what it is. We found that the Commission in their programme for energy had completely ignored the possibilities of methanol, which is referred to in our Report, and I have since learned that they have excluded it from the research and development proposals in a document, Energy for Europe—a Programme for Research, which is available through the normal sources although I have a rather tattered copy if noble Lords care to look at it.

My Lords, I think one might go a stage further and say that our witnesses more than a dozen times questioned the figures on which the Commission had based its projected programme. But Commission officials have themselves said—and I have heard them say it—that the urgency of the problem was so great and the need for Europe to face the challenge of the energy shortage was so serious, that it was not possible during the early months of this year to conduct the consultations that they would have wished with experts from national Governments. Whether or not this is sufficient justification, one point is quite certain; that is, that today's debate is timely.

The Council of Energy Ministers, which is known for short as the Energy Council, meets next week on 17th December. This very day there is a Summit meeting in Paris. We have it from M. Simonet that the Summit will tackle disagreements over Community attitudes to the oil-producing countries and must also tackle disagreements as between the Community member-States on the corresponding conclusions which they should draw with regard to an energy policy in general. Although Mr. Varley has said that the Energy Council agenda is not yet fixed and the final text of the resolution relating to these matters is not yet available, we have it from M. Simonet speaking in Oxford last week that the Council must—and that was the word he used—adopt precise quantitative objectives to diversify supplies and reduce demand, especially, he stressed, in order to hasten a position where nuclear sources could account for about half the Community's energy supply in 1985.

My Lords, obscurity about the Summit and Council agendas might tempt one to query whether there is any value in having a debate just now at all. Will the Government pay heed to our debate? Are the Government already too far committed? Is this debate too late altogether? The substance of our Report was completed in July and, although thanks to printing delays it could be available only in a Rank Xeroxed form, copies were seized upon—almost like a bag of flour or a loaf of bread in recent days—by those specially concerned to have them. As to whether it is all worth it, and whether we serve a useful purpose in manning a sub-committee, in taking evidence and making our report to Parliament, and making these reports when they are debated only several months later, I cannot help being reminded of a fellow countryman of mine who was wandering home at one o'clock in the morning in Glasgow with a somewhat unsteady and zigzag step. He leaned against a lamp-post and observed opposite a doorway with a brass plate on it. He blinked and saw the surname, "Paul", which is not an uncommon name in Scotland, and then he noticed the initials "S. T." So as it was one o'clock in the morning he decided it was a good time to ring the bell. In due course the householder appeared, to whom he addressed these words: "That was a dashed good letter you wrote to the Ephesians, but you won't get a reply! "

The work of our sub-committee has to be conducted almost in total ignorance of proposals that may be coming forward. For example, we learned from M. Simonet's speech on Thursday that proposals we had never heard of were forthcoming regarding Community finance for British nuclear investment. We learned that proposals will be coming forward in respect of Community finance to help investment in offshore oil exploration in order to help the noble Lord, Lord Balogh, and his colleagues to deal with the multi-national oil companies. We learned that proposals would be forthcoming for Community guarantees to sustain a certain level of coal consumption, and officials have said that the Communities could take 20 million tons a year from this country over a long period. These are all uncertainties. We merely learn, largely accidentally, that these things are in the pipeline. I draw attention to them because they explain to some extent the context in which our report was prepared and in which we took evidence.

Turning now to questions for Her Majesty's Government, as distinct from what I would call a straight Parliamentary assessment, and taking note of our report on the Commission's proposals, I think we are entitled to ask the Government what else in this field is on the way. Is it true, for example, that electricity guidelines are coming? Is it true that tariff measures to ensure the optimum use of each fuel are on the way? Are we correctly informed if we heed the rumours that Tax proposals to the same end are being prepared in the Commission as proposals for the Council and for individual member-States to apply later? Is it true that what is called "an energy audit" is on the way? All these things are rumoured and are relevant to our consideration of this Report on the Commission's document. We are entitled to ask: where do the Government stand in regard to the nuclear programme outlined? Where do they stand in regard to the coal programme outlined? Where do they stand in regard to the Generating Boards' freedom to apply different classes of tariff in respect of different users? Where do they stand on these three annexes, particularly in regard to freedom to export energy sources such as crude or refined oil products to third countries outside the EEC? Above all, where do they stand in regard to the supra-national energy agency which has been proposed?

The form of government—and surely contemporary political life is showing us this more and more clearly every day—can never be a mere matter of choice. It is almost always a necessity, and the same must apply to the shape of the energy policy which we share. Whether that be so or not, however, surely this House is entitled above all to ask whether Her Majesty's Government will repeat to this House the assurance given to another place that on any matter which a Select Committee refers to Parliament there will be no Council decision until it has been fully disposed of in debate. My Lords, I beg to move.

Moved, That this House takes note of the Fifth Report of the Select Committee (Session 1974) and the Third Report of the Select Committee of this Session on a new energy policy strategy for the European Communities (R/1472/74).—(The Earl of Lauderdale.)

3.26 p.m.

Lord LLOYD of KILGERRAN

My Lords, I am sure that your Lordships will wish me first of all to congratulate the noble Earl, Lord Lauderdale, on his approach to this matter—I almost said "his characteristic non-political approach to this matter". I should like to congratulate him also on his chairmanship of Sub-Committee F, which deals, inter alia, with energy and to compliment him on the very businesslike and enthusiastic manner in which he has thrown himself into this work. As a full-time member of his sub-committee, I am fully conscious of the amount of work that he expects members of his sub-committee to undertake, sometimes at quite short notice, but very properly.

As the noble Earl pointed out, your Lordships are not being asked today to approve any of the proposals made in the Commission's proposals which are considered in these Reports. It is quite clear from the evidence which the sub-committees have taken that the Commission's proposals are in no way final. Many will be severely amended and many may be rejected entirely by the Government. But it is in my view most useful that documents of this kind should be considered. Whatever their content or source, and however much Members of this House may object to their contents or their source, they are worthwhile documents for this House to consider. And for this reason: it cannot in my view be over-emphasised that the Western economies, including our own, now have to face the prospect of total economic collapse very largely as a result of the energy problem. We are all in a phase where some miscalculation by experts, and even by politicians, in the West, can have the gravest economic consequences. That is why I submit it is so necessary to have discussions on a common energy policy, and that is why the documents issued by the Commission on energy and energy strategy are worth while considering, however much their contents may be criticised.

Of course, the EEC documents under consideration raise the issue of sovereignty and the importance of our control over United Kingdom energy sources. It is to some extent consoling to have heard what the noble Earl quoted from M. Simonet, and also what Mr. Commissioner George Thomson was reported in the Scotsman on 16th November as saying, as follows: It is absolutely clear from the Rome Treaty that oil and gas reserves belong entirely to the country concerned and that the country is completely free to derive the economic benefits by taxation or by nationalisation. How far his view is accepted by other Commissioners I do not know, but this does not exclude the position that if, along with the other Western nations, we are to protect our economy, we shall have to take some form of common action on energy policy and energy strategy.

The EEC documents referred to in the Reports are clearly optimistic in relation to their proposals for coal production and for nuclear energy production. As the Fifth Report points out in paragraph 2 on page IV: The Commission seems to have given insufficient attention to the possibility of the economic use of methanol in internal combustion engines", a field where considerable economies can take place. But whatever views noble Lords may have about the technical contents of these documents, I take the view that it is very useful to have emanating from such an international organ as the EEC proposals which can be considered by the various parliaments of the West in order eventually to lay the basis of a common energy policy and to make common international action effective.

This general view seems to be very much in accord with the view of the German Chancellor, Herr Schmidt, when he was speaking in London on 30th November. If I may quote from the text of his speech, he said this: How can our countries and parties work together to help us survive the world's structural economic and energy crisis and save our people from the twin evils of unemployment and inflation?". He went on to say: Unemployment and inflation today are not national problems. They have become world problems in the wake of the crisis of the structure of the world economic system—arising from the energy question and the balances of payment question. Then he said: … the industrial States have to establish a stringent energy policy by setting aside any seductive ideas of national prestige. We have reached a point where we have to create a formula which can integrate legitimate national interests and the very dramatic inevitable need for common action. That is my reason for presuming to intervene in this debate. Knowing the technical and other criticisms made of the EEC documents, I feel that they initiate a discussion on a common energy policy and that the production of an effective energy policy in the Community should be a first step towards economic salvation.

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