§ 7.31 p.m.
§ The Earl of Halsbury rose to ask Her Majesty's Government what commitments have been made by the CEGB with respect to the proposed power stations at Sizewell in advance of the report and recommendations of the inquiry being held there and in advance of the Government's decisions whether to accept the report and recommendations and to choose between the PWR and AGR as alternative designs for construction thereat.
§ The noble Earl said: My Lords, in rising to ask the Question which stands in my name on the Order Paper, by leave of the House, may I correct three slips of the tongue that I made when addressing your Lordships' House on a previous occasion recently on a Motion put forward by the noble Lord, Lord Ezra? The hour was late; I was in a hurry to help the House get through its business and I was speaking from notes and not from a prepared manuscript. I attributed the Oyster Creek breakthrough announcement to Westinghouse instead of to General Electric; I coupled the use of mixed oxide fuel to the new Mitsubishi-Westinghouse redesigned AGR, there being no such necessary coupling; and, worst of all, I opined that the electrical base-load of this country would be based on coal for a long time ahead. I meant, of course, the non-base-load. I shall try not to score any more "home goals" in the course of my Question this evening.
§ I put this Question down in order to try to elucidate what on earth the CEGB is up to in behaving in an unprecedented fashion, apparently jumping the gun and risking bouncing the Government into an enforced decision which on earlier occasions it has declared to be an open one pertaining to itself alone.
§ Some three years ago, a public inquiry was set up into a proposal by the CEGB to install a power station 733 at Sizewell to be fuelled by a Westinghouse-type PWR nuclear reactor, re-engineered to British Safety Standards, alongside the existing Magnox station there, known as Sizewell A. The new station was to be known as Sizewell B. In his announcement of arrangements for the inquiry the inspector said that he would be considering the available alternative designs for thermal reactors.
§ The inquiry listened to what was, in my view, an unprecedented conflict of evidence between the Central Electricity Generating Board and the South Scotland Electricity Board as to the merits of an alternative design based on their experiences of two sister stations of identical design built by the same consortium, the Nuclear Power Group: one operated by the Central Electricity Generating Board at Hinkley Point and known as Hinkley B and the other operated by the South Scotland Electricity Board at Hunterston, known as Hunterston B.
§ The consortium that built them was forced by ministerial and industrial pressure into a shotgun marriage with its competitor, the BNDC, to form the National Nuclear Corporation—a consultant designer for the CEGB, where TNPG was a turnkey contractor. It is the old TNPG designers who are currently in charge of the two successor designs for Torness and Heysham II. They are now just about complete and soon to come on line, probably within the next 12 months.
§ In evidence to Sub-Committee F of the Select Committee on EC affairs of this House, which is currently engaged on a study of nuclear power in Europe, the CEGB described Hinkley B as an expensive disappointment. By contrast, the SSEB described Hunterston B as a world leader in nuclear station performance during the course of the Sizewell inquiry and elsewhere. Is this not an unprecedented situation, with two national bodies, one in England and the other in Scotland, taking up adversarial attitudes to the same identical design, each of them having one of two indentical twin sister stations?
§ I must at this point emphasise that the abbreviation "PWR" in this context stands for a Westinghouse design, serially ordered worldwide and particularly in France. On the other hand, the letters AGR stand for three, or, if you distinguish between two of them, as you may, four different designed prototypes: Dungeness B, a disaster; Hartlepool and Heysham I, unsatisfactory so far but perhaps remediable, subject to spending another hundred million on them; and Hinkley B and Hunterston B, very successful but as to whose merits the CEGB and the SSEB are at loggerheads. It is therefore essential to emphasise that nowhere can you point to an AGR as if it were a member of a species, all of which are identical and of which any particular station was typical.
I must at this point ask your Lordships to backtrack over questions in this House relating to a situation in which the inspector at the Sizewell inquiry will express a preference for a re-engineered PWR or a re-engineered AGR, already represented by the two stations nearing completion at Torness and Heysham. In the first case, the Government will have either to accept or reject the inspector's recommendation. In the second case, they will have to make a decision. 734 Either way, the last word must be with the Government.
Let me therefore take a look at what they have said so far. Let us take the 25th February last year. Following a Starred Question by the noble Lord. Lord Ezra, the following exchanges took place on a supplementary question. I quote from col. 812 of the Official Report. I asked:
will the noble Lord confirm that, in the event of the inspector preferring the AGR, the Government will approach his recommendation with an open mind and not feel themselves in any way bound by the earlier preference of the CEGB?".
The noble Lord, Lord Gray of Contin, who was replying for the Government then, as he will be replying this evening, said:
My Lords, yes, I can give the noble Earl the assurance that the Government will approach the report of the inspector with the open mind which Governments traditionally use on such occasions".
If the situation as expressed in this House by the Government is entirely open, how can the CEGB possibly justify its commitment to the PWR in advance of the decision by placing contracts for components to the tune of £190 million (as stated in answer to Parliamentary Questions previously), together with cancellation clauses adding another £10 million, as stated in a Written Answer to a Question of mine on this matter?
§ It has been defended elsewhere as a normal commercial risk. It is nothing of the kind. I have never heard of risk-taking on this scale. Its consequences, however, are foreseeable. Whatever the merits of the case, we may be bounced by the sheer magnitude of the expenditure into a decision which may be the wrong one or which may not be what we would prefer because of the large-scale commitments made in advance of a decision which we have been assured is still an open question. Does this not amount to positive misbehaviour by the CEGB, and is not its board collectively answerable for a situation in which it may be bouncing us into backing the wrong horse?
§ I most earnestly entreat the Government to perpend upon what I might call the quintuple banana skin on to which they will be dumped in such a case. Let us look at what people will say. The environmental lobby will protest that the AGR is "user-friendly" in a way which the PWR never can be. The features making for its safety are intrinsic: monophase coolant which cannot boil dry and high thermal inertia with a long time in hand to cope with any incident that may arise. There are low radiation doses to plant operatives. All those are in contrast to features making for safety in the case of the PWR, which are extrinsic and dependent on a lot of clever engineering devices paid for by complexity leading to more things being able to go wrong. In evidence before Sub-Committee F, Mr. Gustaffson of the Swedish State Power Board told us that he would not want a Sizewell-type re-engineered PWR for Sweden as it was too complicated.
§ I come next to banana skin No. 2: the employment lobby will protest that the AGR, being more capital-intensive overall, will be more labour-intensive during the constructional phase and will give more employment, particularly where it is wanted most.
§ Banana skin No. 3: the anti-French, anti-European and anti-American lobbies will gang up in alliance 735 with one another and protest against the high percentage of manufactured components that will have to be imported—30 per cent. of the manufactured components, so they will argue—whereas it is precisely in manufacturing industry that our unemployment problems lie.
§ Banana skin No. 4: those of the engineering fraternity who are familiar with the pros and cons of the subject, are strongly polarised in favour of the AGR and make no bones about it. Comments to the effect, "Why buy a Ford when you have a Cadillac in the garage?" are in wide circulation. Men of the eminence of Sir Francis Tombs, chairman of Rolls-Royce and earlier chairman of the SSEB and the Electricity Council in turn, have come down publicly in favour of the AGR. An article in the current number of The Scientific American describes the Westinghouse—Mitsubishi effort to produce a safer PWR with a lower fuel rating. What will the CEGB end with, according to what people say? Just one more obsolete, overcomplicated prototype by the time that it is built. All those adverse judgments by engineers will be quoted adversarially in the context of banana skins 1, 2 and 3.
§ I come now to the worst of the lot: political banana skin No. 5 will act as cement to wrap up the aggregate represented by Nos. 1, 2, 3 and 4. Staking £200 million at evens is not a normal commercial risk. In no other context can I think of it ever being done. It could only be justified if the odds are not at evens. If the CEGB, having privately decided on a PWR, has been privately assured that the choice is not a choice but a certainty and always was from the beginning, the time-wasting Sizewell inquiry was a fudge from the word "go"—from beginning to end in fact. Whose fudge? That is what will be asked and that is what must be answered.
§ I ask the Government for straight answers to three straight questions. First, do they confirm, as previously, that the final decision as between those two reactors is still in their own hands and that, although they may take them into consideration in coming to a decision, the wishes of the CEGB and the recommendations of the Sizewell inspector are not binding on the Government until they have made up their minds? Secondly, if the answer to my first question is affirmative, as it ought to be, how can they justify the CEGB's expenditure on PWR components as a normal commercial risk? Thirdly, will they categorically deny that the level of expenditure on a putative PWR at Sizewell risks bouncing them into a loss of choice which they, I hope, will confirm to be still free today? My Lords, I beg to ask the Question standing in my name.
§ 7.45 p.m.
§ Baroness Airey of Abingdon
My Lords, I thank my noble kinsman for introducing this important subject this evening. I speak with great humility in view of the vast knowledge of other Peers who will speak this evening. I can speak only from my personal knowledge, I had the privilege of sitting on Sub-Committee F, to which my noble kinsman referred. Last week we heard evidence about Sweden. I found it enormously interesting, because Mr. Gustaffson told 736 us that it was the accident to the PWR at Three-Mile Island which so politically influenced the Swedish Government that they decided not to build any more nuclear power stations. When the ones that they have come to an end they will be without one.
I thought that strange because Sweden is an advanced country and uses a great deal of electricity. Apart from the institutions which use electricity, a great deal is used in the home because in nearly every home there is not just a refrigerator, a washing machine and a washing-up machine, but a computer. Their electricity needs will be great.
The members of the Sub-Committee wondered what the solution would be. I understand that Sweden is prepared to import electricity from nuclear power stations in other countries. However, that does not give one much independence. I found that point of great interest.
I have visited Heysham II and Torness in construction. I have discussed the performance of the British AGR with scientists and technicians and I was assured that during the recent miners' strike the AGRs which were working contributed largely to our lack of problems at that time. I have also read the SSEB's report to which my noble friend has referred.
I cast my mind back to an earlier debate which took place on 25th February 1985. My noble friend the Minister, in answer to a question which I will not quote, said:At the present time we do not want to close options".—[Official Report, 25/2/85; col. 812.]If that is so, has the CEGB—pre-empting the decision of the inquiry and presumably the debate which I imagine will follow in both Houses—committed the consumers to the contracts about which we heard in my noble friend's speech for components for a PWR which would commit us to at least £190 million with a cancellation fee of £ 10 million, making a total of at least £200 million? Will my noble friend the Minister comment on that and tell us whether the consumers will be paying for that?
§ 7.48 p.m.
§ Baroness Robson of Kiddington
My Lords, perhaps I may add my thanks to the noble Earl for raising this subject. The Question relates merely to the Sizewell inquiry. It is not a Question about whether or not we believe in nuclear power. I intend to confine myself to the Question that has been raised.
In my view, the Sizewell inquiry was presented with an impossible task. It was asked to look at the possible development of Sizewell B in the context of British energy policy. So far as I am aware, we have no energy policy in this country. The inquiry started by looking at the various aspects of the type of energy policy that we might have. As a result of the inquiry, an enormous amount of documentation has been put together which, if built upon, could create an energy policy for this country. But that was not really what the Sizewell inquiry was supposed to be about. As a result of that elongation of the inquiry, even major national organisations, and individual local people certainly, have run out of money to make their representations when it comes to the point of deciding what type of nuclear power should be installed at Sizewell.
737 This all gives us enormous food for thought. Are we running these major public inquiries and major planning inquiries the right way, so that the input can be meaningful to the nation? I suggest that major inquiries of this kind should be run in two stages. There should be an original inquiry to examine the need for the proposed development, including alternatives, and that inquiry would prepare a brief for the second stage of the inquiry. The second stage would only proceed once the need had been established and it would be concerned with specific site aspects, with environmental aspects and with all the other input that goes into a public inquiry. I believe that if Sizewell had been handled in that way we might have had the answer by now.
Such a system would also have enabled the CEGB to place the order for the primary circuit with some assurance that the expenditure would not be wasted, because the original decision about the proposed development and the need having been established, it was then a question for the second stage as to the environmental input. I believe that this would have avoided the position in which we now find ourselves, and it would also have avoided what went on in the other place on 9th February, 1984, when, in answer to a question, the Prime Minister said at col. 1018 of the Official Report:If there is to be any chance of the project going ahead it is vital to order those component parts now. If the decision eventually is to let the project proceed, it will turn out to have been a very economical move. The project might not go ahead for a long time. If it does not proceed it will be necessary to dispose of those parts elsewhere".In other words, resell them.
But where are we as a nation to resell those parts now? Most countries are cutting down their PWR programmes and some of them, like the United States, have cancelled them altogether. Where are we to find the customers for these parts that we have contracted to buy? The noble Earl, Lord Halsbury, has asked "Are we therefore committed already?" If so, it seems to me an enormous tragedy, because we have heard both the noble Earl and the noble Baroness talk about the alternative place of the AGR, and particularly the submissions made to the Layfield inquiry by the SSEB chairman, Donald Miller. He proved—I think to his own satisfaction and certainly to mine—that the new AGR can produce electricity at 1.99p per unit, whereas the PWR costs 2.07p per unit.
In addition, one of the attractions of the AGR is that it can be positioned much nearer conurbations and can contribute to the energy conservation of this country by providing district heating. I think that the Government are in honour bound to answer quite clearly the questions asked by the noble Earl, Lord Halsbury, and to satisfy this House that we are not committed to something that most of us would not like to accept.
§ 7.55 p.m.
§ Viscount Mersey
My Lords, I am grateful to the noble Earl for raising this Question. I must confess that I am quite blinded by his expertise. However, unlike the noble Baroness, Lady Robson, I took this Sizewell PWR question to be symptomatic of the great nuclear debate and I was planning to speak generally for a very short time—around four minutes. But if noble Lords 738 feel that even that is too long then, if they will just shout out, "Shut up and sit down" that is exactly what I shall do.
I think I have one claim to be speaking in this debate, which is that I believe I am at the moment a greater radioactive hazard than Sizewell. Last July, not only was I submerged in the Firth of Clyde in HMS "Spartan", which has a pressure water reactor—that did not make me at all radioactive—but I went up to 18,500 ft in the Himalayas. I have since learned from the noble Earl, Lord Halsbury, that I positively soaked up alpha, beta and gamma emissions. So noble Lords sensitive to radioactivity should certainly stay clear of me and also of my noble friend Lord Ridley, who has been up to the Everest base camp, but, above all, of the noble Lord, Lord Hunt, who went up to 23,000 feet on the South Col of Everest.
Strangely, I claim that we irradiated Peers are among the most hale and hearty around. I am a reasonably fit Peer, though not in the same league of fitness as the noble Lord who gallantly steered Hilary and Tensing to victory way back on Coronation Day in 1953. But I feel sure the noble Earl, Lord Halsbury, would agree that the radiation dose to which I was exposed hugely exceeded any dose that I might receive from eating fish from the Irish Sea or even bathing off Sellafield beach.
The problem is, of course, that that would not be the general view of the British public, for we all live nowadays alongside a gut phobia about radioactivity. The Sizewell inquiry took three years, I understand from the noble Earl—I thought it was only two-and-a-quarter—and cost millions of pounds. I wonder why it took so long.
I was appreciative of an article written by Woodrow Wyatt in The Times of last Saturday, and with respect to my noble friend Lady Airey of Abingdon, he pointed out that even in the accident on Three-Mile Island no one was killed and no one felt any aftereffects. He contrasted that with the thousands killed in coalmining. I understand that Sizewell—this is very dangerous, because I have no expertise here—is of a different and safer design than the Three-Mile Island plant.
I think the basic diffculty is that we are dealing with an emotive, irrational fear, and where emotion is involved reason does not work as a counter-argument. I believe we should recognise the existence of the emotive fear and produce equally emotive counter-arguments. In the House of Commons environmental reports on radioactive waste, it emerges, curiously, that our predecessors were terrified of electricity. That fear no longer persists and I wonder how people ovecame it. People are still frightened nowadays of flying. I certainly feel more frightened in a 'plane than when I am driving a car. Should someone quote statistics at me that flying is a million times safer than driving, that does not diminish my fear. Naturally it does not, because it is a rational argument trying to counter what I might call gut panic. The airlines recognise our fear of flying, they play us soothing music, they ply us with relaxing drinks, they show us comic films like the "Prime of Miss Jean Brodie" or "Educating Rita"; they never show "Psycho" or "Airport" or "Jaws". So I ask: should not the CEGB be taking the same action? Should they not be 739 producing palliatives? To those who say, "What palliatives? There are none", I would ask another question: how have the French managed to sell their PWRs or the Belgians or the Taiwanese?
Cost could be a good palliative. I understand that Frenchmen living near nuclear power stations get cutprice electricity. In Scotland too, which is 40 per cent. nuclear, I think AGR, electricity is cheaper than it is in England.
My Lords, we have a real problem here. According to a Gallup Poll taken on 16th March, 65 per cent. of us think nuclear power should stop altogether. Yet it is the safest power source known to man, be it Magnox, fast breeder, AGR or PWR, and it is cheap.
So far as concerns the issue of AGR versus PWR, and with which this whole Unstarred Question is concerned, I hesitate amid such expertise. I have understood that there are problems concerning very high temperatures in the roofs of some types of AGR. I also cannot help but notice that the French have an awful lot of PWRs and I would have thought that the rest of the world seemed to have chosen numerically the sort of genus of PWR as opposed to the genus of the AGR, though I stand to be corrected here.
I think my Question could be reduced to a set of intitials, as it were, and it would be this: would not my noble friend on the Front Bench agree that there is nothing wrong with the CEGB's PWR. But there is a lot wrong with their PR? On that PR front, I have one useful item for the CEGB which was suggested to me by Dr. John Hemming, who is director of the Royal Geographical Society. Many noble Lords will have seen car stickers which read: "Nuclear power? No thanks." Dr. Hemming suggests the following alternative car sticker: "Stop acid rain. Go nuclear".
§ 8.2 p.m.
§ Lord Sherfield
My Lords, I rise to intervene briefly in support of the pertinet Question of the noble Earl, Lord Halsbury, about the Sizewell B nuclear power station. It raises what is at this stage a very simple point. For what reason and on whose authority has the CEGB committed resources to the proposed project before the inspector's report has been completed, published and considered?
It is easy to understand the frustration of the CEGB and the nuclear power industry as they watch the progress of the Sizewell inquiry resembling, as it does Pope's "Needless Alexandrine … that like a wounded snake drags its slow length along." It is really maddening for them to see the creeping obsolescence of the Sizewell B design as Westinghouse and the Japanese move on to new and presumably improved designs, and new concepts for reactors are developed.
How infuriating it must be for them when they observe that since the Government announced the setting up of the Sizewell public inquiry in January 1982, the French have commissioned no fewer than 17 PWRs, thus continuing to bring down industrial fuel costs in France yet further, to a point, as brought out in reply to questions in the House last week, some 25 per cent. below industrial fuel costs in Britain, and putting Framatome in a strong position to pre-empt whatever international markets there may be for 740 PWRs. The noble Baroness, Lady Robson of Kiddington, had some pertinent remarks to make on the prospects in these markets.
So the temptation to jump the gun must be, or must have been, almost irresistible. Moreover, since leaks are the order of the day, it may well be that the tenor of the Layfield Report has already reached some important ears. It must, after all, be extremely irritating for the Government too when, in the midst of their endeavours to stimulate British industrial revival, they see an important section of heavy industry held in baulk. So there is a temptation for the Government also, but it must surely be resisted. The hand was called when the inquiry was set up, and in spite of these maddening delays, it must be played out straight.
The real culprit in all this is the system of mammoth public inquiries on which again the noble Baroness, Lady Robson of Kiddington, had some pertinent remarks to make. How unfortunate it is that we have become saddled with this system. It may seem democratic, but it is certainly, in many cases, against the national interest. It has come about partly through the weakness of successive governments in grasping nettles, in failing to take firm decisions in large technological questions and to get on with it. In saying this, I shall doubtless be regarded as something worse than a hidebound anti-democratic reactionary, but I think I can stand that.
The situation is also due to the passions, the entrenched irrationality, of the anti-nuclear movements. This might be less serious if, having had their say, they were prepared to accept a tribunal's or an inquiry's conclusions. But in practice, if they do not like the outcome, they continue with the campaigns harder than ever. After years of inquiry, nothing for them has changed. One may mention here the rejection of the painstaking Windscale inquiry. Public inquiries do not seem to settle issues, although that is presumably their purpose.
For some reason this attitude to nuclear power seems to be prevalent only in Anglo-Saxon societies, and the noble Viscount, Lord Mersey, touched on this point. The Latin races are not infected: not the French with their huge and highly successful nuclear programme; not the oriental races; not the Japanese who have some reason for feeling emotional about nuclear matters, but nevertheless have a large programme; not the Chinese either on the mainland or in Taiwan; and of course not the Slavs.
These are obiter dicta, and I shall not pursue them any further but will come finally to the main point. It is not my intention tonight to discuss the merits of the CEGB's decision to go for PWRs as against AGRs. I do not have the expert knowledge of the noble Earl, Lord Halsbury, on the rival systems. All I have learned over the years is that there are as many ways of assessing rival nuclear reactor systems as there are of skinning a cat. In any case, the inspector may put in a negative report or recommendation, in which case a new situation will arise. So I shall resist the temptation to try and anticipate the Layfield Report, and I shall not add to the number of Lord Halsbury's potential banana skins.
In conclusion, I shall simply frame my questions to the Government, which I think are essentially the same as those put by the noble Earl, as follows. Did 741 they know about the decision of the CEGB to pre-order, and did they approve it? If they did, what were their reasons? If they did not, why have they not intervened to correct the situation? Whatever the answers to those questions may be, I feel sure that the House will want an assurance this evening that until the Layfield Report has been published and officially considered, all options will remain open. We do not want a situation to arise in which we are told that it is too late to consider an alternative programme because of the prior commitments that have been entered into. In short, we do not want to be told that the pass has been sold.
§ 8.11 p.m.
§ Lord Stoddart of Swindon
My Lords, I too should like to thank the noble Earl, Lord Halsbury, for raising this important matter and for the clear way in which he explained the problem that exists concerning expenditure on the PWR in advance of the inquiry report.
As he said, the inquiry was set up three years ago and its report is still awaited. Millions of words were spoken and written in evidence and comment to the inquiry and virtually every issue ralting to nuclear energy was raised. The inquiry did not turn out to be one into the desirability of building a PWR at Sizewell but became a forum for every point of view on civil nuclear power, not only from interested parties in this country but in every part of the world. The whole question of whether there should be a future programme of nuclear power stations at all was raised, giving rise to a greater public awareness of the problems associated with the nuclear industry and, in my view, increasing public opposition to the building of further nuclear power stations in Britain.
The inquiry was due to report its findings last November. When that date was not met we were told in this House that the report was likely to be in the Government's hands by February 1986. However, the February date came and went and there was still no report. The Government indicated that it would not come forward until the spring. Spring has not quite come; not yet anyway, but we are living in hope. The latest information we have is that the report will not be ready until September 1986, nearly a year later than expected. Can the noble Lord, Lord Gray, indicate whether this new deadline will definitely be met?
I have said before, and I repeat it now, that had the CEGB and the Government not made a decision to scrap the AGR and to introduce the PWR there would have been no inquiry of this nature and an AGR would have been under construction and halfway to completion on the Sizewell site. I believe that they made a grave error in deciding to introduce a new reactor type into this country.
I seem to have been interested in and concerned with this issue from the moment that I entered Parliament in 1970. I took an interest in the deliberations of the House of Commons Select Committee on Science and Technology and agreed with its view that the PWR was not the correct option for this country and that the heavy water reactor route should be taken. As a Member of the House of Commons Select Committee on Energy, which considered the 742 Government's nuclear power policy, I not only heard a great deal of evidence but also visited many PWR sites, including Three Mile Island. What I heard and saw convinced me that the PWR option was not the correct one, and that if we must change our reactor type we should adopt the Canadian heavy water reactor (CANDU) and work with the Canadians to promote CANDU worldwide as an alternative to the PWR. If that could not be achieved, I, and indeed the Labour Party, had a preference for continuing to build AGRs if it was decided that a nuclear power programme should proceed at all.
But now let me come to the serious point raised by the noble Earl concerning the heavy expenditure being incurred by the CEGB and NNC on work on the PWR in advance of the findings of Sir Frank Layfield's inquiry. As we have heard, the total expenditure so far amounts to no less than £190 million and that amount is being added to each month that goes by. That implies an assumption on the part of the CEGB, the NNC and perhaps the Government that the inquiry report will come down in favour of the PWR.
If I may say so, such an assumption is not only discourteous to Sir Frank Layfield and his inquiry team but is bound to raise the suspicion in the minds of some that the CEGB and the Government have been given advance knowledge of the inquiry findings. But, having raised the suspicions, let me at once knock them down. Sir Frank Layfield is a man not only of the greatest ability but also of the utmost integrity. It is certain that he will have given no indication of the results of the inquiry, since he will not come to his conclusion until all the evidence has been properly sifted and evaluated and all the considerations taken into account.
I can only conclude that the CEGB is taking one hell of a gamble, and a gamble with the electricity consumer's money. As the noble Baroness, Lady Airey of Abingdon, noted, it is the consumers who will pay, and they will certainly pay if things go wrong and a PWR is not built at Sizewell. And things could go very wrong indeed. The situation in the energy market has changed drastically since the inquiry got under way. The basis for the CEGB's case for a PWR was its expectation that the real price of fossil fuels would not only be maintained at the historically high levels of 1980–81 but would continue to increase significantly in real terms in the future. That was the basis of the CEGB's decision to go for a PWR.
However, the price of oil is now about one-third of the price that it stood at in 1980–81, and I understand that the present price of internationally traded coal and natural gas is similarly only one-third of what it was in 1980–81. If this situation continues, as well it might, since the present prospect is that supplies of fossil fuels will exceed expected demand well into the next century, a PWR at Sizewell built before the end of the present century will be quite uneconomic compared with fossil fuel fired power stations.
These considerations may or may not be taken into account by Sir Frank Layfield, but whether they are or not, the Government and Parliament when making a judgment about the Sizewell PWR, following the publication of the report of the inquiry, will have to pay serious attention to them. If the judgment is that the PWR should not go ahead, the electricity 743 consumer and the country have lost a lot of money and the impatience of the CEGB will have served us all very badly indeed.
Finally, I want to return to the figures. We have already heard of the £190 million spent up to the end of March, but in a letter to me earlier this year the noble Lord, Lord Gray of Contin, indicated that there would be ongoing current expenditure of £4.5 million per month and, in addition, for each month's delay to the project a further cost of £3.4 million a month would be involved. On top of that, another £1 million per month would accrue in interest charges. If my interpretation of those figures is correct, there will be ongoing expenditure of £8.8 million per month, making £105.6 million in a full year. That is in addition to the £190 million already mentioned.
We therefore have a situation that worsens every month. By March 1987, a total expenditure of nearly £300 million—one quarter of the projected cost of the whole project—will have been incurred and, as I have already said, the whole of that expenditure could well be rendered abortive. I am sure that the noble Lord, Lord Gray, will agree that that is a very serious matter and will recognise that the noble Earl, Lord Halsbury, has done the House, the Government and the country a service in raising the subject.
I feel confident that the noble Lord the Minister will do his utmost to deal with the important points and principles that have been raised in tonight's debate when he winds up. I hope also that he will feel able to assure the House that its concern will be expressed at the highest level of government.
§ 8.22 p.m.
§ The Minister of State, Scottish Office (Lord Gray of Contin)
My Lords, first, perhaps I may join with those of your Lordships who have thanked the noble Earl, Lord Halsbury, for giving the House an opportunity of discussing this subject again tonight. We are indebted to him, as we frequently are, not only for that opportunity but also for providing yet another of his extremely well-informed speeches and, on this occasion, his reasonable comments, if criticisms, of the CEGB. Indeed, I shall try to answer the questions that the noble Earl has raised.
We were fortunate also to have my noble friend Lady Airey of Abingdon taking part in our debate. Not for the first time did she return to the question of the AGR/PWR argument. I shall say a word or two about that subject later. The noble Baroness, Lady Robson of Kiddington, also touched upon that subject and expressed what I believe is a much shared view in her criticism of the public inquiry system. I believe it was Winston Churchill who once said of our democracy that it has many faults but nobody has found anything better. We might also apply that remark to the public inquiry system.
We heard also another extremely well-informed speech from the noble Lord, Lord Sherfield, who was penetrating in his criticism of the CEGB. I shall try to answer some of the questions that he raised. My noble friend Lord Mersey gave the House a very interesting combination of seriousness and lightheartedness in his speech. I feel sure that he will not find any of his noble 744 friends sitting that much further away from him because of the degree of radioactivity that he may emit.
I listened with great care, as I always do, to the noble Lord, Lord Stoddart of Swindon, because we went through some of the phases of our nuclear-power learning curve together. We entered the House of Commons at the same time in 1970 and I well remember that the favoured son at that time was the steam-generated heavy water reactor. We moved from that through a variety of phases to the present situation.
I am most grateful to the noble Earl for the points that he made and to other noble Lords for the serious comments they contributed. I should have liked to enter into more detailed consideration of the issues raised but I must request the forgiveness of the House if my comments on some of them are necessarily brief and uncommitted, for it would be entirely wrong of me, in view of the statutory role of my right honourable friend the Secretary of State for Energy in connection with the Sizewell inquiry, to comment either on the CEGB's application to build a PWR or on any of the many issues considered at that inquiry in advance of the inspector's report and of my right honourable friend's decision.
The noble Lord, Lord Stoddart of Swindon, reminded the House that my right honourable friend the Secretary of State for Energy announced in another place on 13th March that Sir Frank Layfield now hopes to deliver his report on the Sizewell B public inquiry in September. The noble Lord asked whether I could give an absolute guarantee that the report would be delivered by that date. I cannot do so; I can only hope, as we all do, that the Layfield report will be delivered by that time. We must bear in mind that the Sizewell B inquiry—the longest-ever planning inquiry in this country—dealt with an extremely complex set of issues and that the report is expected to contain more than 100 chapters. When the Secretary of State receives that report he intends to reach his decisions on it as soon as he possibly can. The Department of Energy has arrangements in hand to have available the resources that will be required for an urgent examination of the report.
Your Lordships must forgive me for the length of that introduction but I felt it was important that the Government's present position should be made quite clear in respect of the issues tackled at the Sizewell inquiry. The noble Earl, Lord Halsbury, requests information on the extent of commitments entered into by the Central Electricity Generating Board in respect of Sizewell B. A number of figures have been mentioned by various noble Lords who took part in the debate this evening.
I shall try to outline the commitments and to describe just how binding they are on the CEGB. The CEGB has advised that by the end of March the total cumulative expenditure chargeable to the Sizewell project amounted to £190 million. That expenditure covers, first, essential design work undertaken by the board's Sizewell project management team and by the National Nuclear Corporation; secondly, development work to prepare the safety case for the inquiry and enable a prompt start on site should consent be granted for the project to proceed.
745 In addition, the CEGB has placed contracts to date for the station amounting to some £440 million. Of that, less than £100 million is for preparatory design work that is proceeding. The balance of some £340 million is for manufacture and supply, which will proceed only if the project receives consent. It is pertinent to note that some companies would be in very considerable difficulties if design contracts for Sizewell had not been placed by the board. There has been only one firm manufacturing contract placed to date, for the reactor pressure vessel forgings valued at £12 million.
The Secretary of State for Energy and the Sizewell inquiry were informed in February 1984 of the board's intention to release that contract. The board explained that failure to do so would delay a start on the main foundations, if and when consent was received, by about two years, and would thereby result in a substantial increase in the cost of the station. The Secretary of State made clear to the board and to the inquiry at the time that it was for the board to exercise its commercial judgment on the risk of, on the one hand, incurring nugatory expenditure, or, on the other, facing lengthy delays and increased costs. He made it quite clear that there was no question of his eventual decision being influenced by the purchase of the forgings. I have dwelt on this point at some length but I hope it has been instructive. It demonstrates clearly my right honourable friend's determination to deal with the issue impartially and strictly on the merits of the evidence presented to the inquiry.
Finally, on the question of commitments, the noble Earl, Lord Halsbury, will also be aware, since he asked a Question on this point on 4th March, that specific cancellation charges and similar penalties of the order of £10 million will be payable by the CEGB in respect of its contractual commitments should consent not be forthcoming for Sizewell B. The amount already spent on design and safety work, the amount of design work under the contracts in existence, together with the £10 million I have just mentioned, add up to £300 million that the CEGB has directly committed to the station. I acknowledge that this is indeed a substantial sum to have committed before the outcome of the inquiry is known. I can confirm that the board will have to bear those costs should the project not proceed.
However, Sizewell B is little different from other large projects on which it is often necessary to spend large sums of money at the planning and design stage. As this would be the first PWR to be built in this country for electricity generation, a large proportion of the expenditure had to be incurred to establish the design and safety case for the purposes of the public inquiry and clearance by the nuclear installations inspectorate. The CEGB is right in believing that the greater extent to which detailed design work is completed before manufacturing commences, the more straightforward and economically construction will be carried out and the greater the assurance that operation will be trouble free.
The noble Earl asked for an assurance that the expenditure incurred and committed on a PWR for Sizewell will not sway the Government one way or the other. Other noble Lords raised the same point. I can give that assurance without reservation.
746 I now turn to other issues raised in the debate and I remind noble Lords that what I can say on behalf of the Government is strictly limited. I shall first say a few words about the AGR versus PWR debate to which my noble friend Lady Airey of Abingdon referred. The Government endorsed in 1979 the CEGB's proposal that the PWR should be established as a valid option for the UK and that the next nuclear power station should, subject to necessary consents and safety clearances, be a PWR. The CEGB's application to construct a PWR at Sizewell has been subject to thorough scrutiny at the recent public inquiry. Supporters of both the PWR and AGR have had a full opportunity to put their cases to the Sizewell inspector. We shall have to see what conclusions he draws on all these matters in his report in due course. I know that your Lordships will appreciate and accept that it would be inappropriate for me to comment at this stage. It has been suggested that PWR technology is obsolete, and it has been pointed out that no orders have been placed for PWRs recently in the United States. Again, these issues and others were aired at the inquiry and the inspector will no doubt give due weight to the evidence in his report.
The noble Lord, Lord Sherfield, and my noble friend Lord Mersey both referred to the safety record of the nuclear industry. I can only say that we all endorse what they said. The success rate of the nuclear industry over the years is one which is the envy of many other industries. It is to be congratulated on its achievement. It is unfortunate that at times there is confusion—perhaps sometimes not all that innocent confusion—over the nuclear industry for peaceful purposes and for defence purposes. It is quite wrong that the two uses of nuclear power should become confused. The more that we can highlight the success of the nuclear power industry for power generation in particular, the better. The success of the French mentioned by a number of noble Lords this evening highlights just what can be achieved in that area.
This has been a short but interesting debate. I know that these debates always attract those who are particularly interested in nuclear power. I am sure that we are all sad that there are not more of our number who are prepared to do their research and take part in debates on these occasions. I again thank the noble Earl for giving us the opportunity to debate this subject and I hope that I have satisfied him with the answers I have been able to give.
§ Lord Stoddart of Swindon
My Lords, I am sorry to come back to this, but before the noble Lord sits down may I raise one query? There is now some confusion in my mind about the amount which has been spent and the amount which is yet to be spent. I understood the Minister to say that up to the end of March a total of £300 million had been spent. Was I correct in the figures that I gave to the House of an ongoing expenditure of £8.8 million per month, or £105.6 million between now and March next year? I appreciate that the noble Lord may not be able to give that information tonight, but I should like to have it and perhaps other noble Lords would, too.
§ Lord Gray of Contin
My Lords. I am grateful to the noble Lord for framing his question in the way that he did. I cannot give that information without reference.
747 The noble Lord gave a lot of figures tonight and I have done so, too. I think we both probably want to read the Official Report tomorrow. I shall arrange for the information he wants about his figures to be sent to him. I shall also arrange for a copy of my letter to be placed in the Library of the House.
§ House adjourned at twenty-two minutes before nine o'clock.