HL Deb 19 October 1988 vol 500 cc1118-21

2.42 p.m.

Lord Ezra asked Her Majesty's Government:

How they propose to accommodate the costs of nuclear power within their plans for privatising the electricity industry.

The Earl of Dundee

My Lords, we are looking at a wide range of options on how best to ensure a continuing supply of nuclear power. The Government believe that there should be a significant nuclear component within the privatised electricity supply industry.

Lord Ezra

My Lords, does the noble Earl not agree that there is some concern among consumers at a possible increase in prices of electricity that might result from a fixed component of nuclear energy in the privatised sector? Will he not agree that if that is so, it is unfair to burden the consumer with the extra cost based on national policy and that if there is any extra cost that should be borne by the Exchequer generally and not by consumers of electricity?

The Earl of Dundee

My Lords, a range of options is certainly being considered to ensure that the new company will have an incentive to seek value for money in its nuclear capacity.

Lord Campbell of Croy

My Lords, when considering these costs, will the Government take into account that the nuclear industry is guiltless as regards the greenhouse effect and the ozone layer, while the coal industry—which was presided over with distinction by the noble Lord, Lord Ezra, who yesterday at Question Time was much concerned about the environment—causes serious damage to the atmosphere unless expensive extractive equipment is installed?

The Earl of Dundee

My Lords, I agree with my noble friend's remarks.

Lord Hatch of Lusby

My Lords, if the Minister agrees with his noble friend does he also agree that, even if nuclear power stations do not emit sulphur, they accumulate large amounts of toxic wastes which are at least as dangerous as the greenhouse effect, and that so far this Government have had no sustained policy for disposing of those?

The Earl of Dundee

My Lords, I cannot accept that the Government have not had a policy for controlling toxic wastes which may arise from nuclear power installations. As regards the future and privatisation, every continuing consideration will be given to make sure that this matter is tackled in the right way.

Viscount Hanworth

My Lords, does the Minister agree that the relatively small amount of nuclear and radiological waste from our power stations does not present any technological problem and that it is merely a question of finding the right sites and convincing the public that there is no problem?

The Earl of Dundee

My Lords, yes; I agree with the noble Viscount.

Lord Tordoff

My Lords, will the Minister tell us where the sites are?

The Earl of Dundee

My Lords, not without notice.

Lord Peston

My Lords, apropos the Question on the Order Paper, can the Minister clarify the problem? If nuclear power is economic, why must it be protected by statute? If it is not economic, why are the Government interfering with market forces?

The Earl of Dundee

My Lords, too great a reliance on fossil fuels would expose us to interruptions in supply and future price shocks. There is a vital strategic need for a non-fossil fuel contribution which can be made for the foreseeable future only by nuclear power.

Lord Williams of Elvel

My Lords, after privatisation, in the event of a serious nuclear accident—which heaven forfend—will there be some kind of insurance that private companies will meet the cost, which seems impossible? If the Government are to ensure and give an indemnity against the costs of any such accident, what will be the add-on to the consumer?

The Earl of Dundee

My Lords, in that very unlikely event the costs will be met in exactly the same way as they are now. The new company will be covered by the same nuclear insurance provisions as the CEGB currently enjoys.

Lord Grimond

My Lords, will the Minister remind the House of the relative costs? What are the relative costs of producing electricity by nuclear means and by other means such as coal and oil?

The Earl of Dundee

My Lords, I do not have the answer to that question. However, as I have already indicated, the relevance of continuing with nuclear power is not entirely economic. There are strategic considerations of having diversified fuels. Apart from that point, it is not necessarily the case at all that nuclear power is uneconomic.

Lord Stoddart of Swindon

My Lords, in the light of the problems arising from burning fossil fuels and of the possible dangers from nuclear plants—including explosions and the difficulties of disposing of long-term radioactive waste—would the Government not be better employed in ensuring that their policies work towards renewable sources of energy and energy conservation?

The Earl of Dundee

My Lords, the industry's safety record is second to none. There will be no question of privatisation resulting in a reduction in safety standards. As regards the relevance of encouraging non-fossil fuels other than nuclear, the matter is continually being given active consideration and pursuit.

Lord Orr-Ewing

My Lords, while we are waiting for the next generation of nuclear power stations will we be able to continue to draw nuclear power from France at economic prices? Is that a long-term contract which will carry on for some time?

The Earl of Dundee

My Lords, yes. There will be no restrictions on the possibility of importing nuclear power from abroad.

Lord Tordoff

My Lords, I refer to my noble friend's original Question. I understand that the Minister was unable to answer my earlier question and may need a thousand years to find the answer. Can he say whether the costs of decommissioning are being taken into account in the costing of nuclear power for privatisation?

The Earl of Dundee

My Lords, privatisation will not affect the basic responsibility of nuclear power station operators to undertake appropriate decommissioning operations within the guidelines on safety and environmental protection set by the regulators. The Government are looking at all options to ensure that the nuclear industry thrives after privatisation.

Lord Williams of Elvel

My Lords, can the Minister tell the House whether anyone knows how to decommission a Magnox reactor?

The Earl of Dundee

My Lords, all things are possible, and I believe we can agree that technology in the field is becoming better.

Lord Nugent of Guildford

My Lords, as we have now taken more than half the normal time for Questions on this first Question, is it not time that we moved on to the next Question?

Noble Lords

Second Question!

Lord Mason of Barnsley

My Lords, can the Minister explain to the House who, so far, has shown an interest in purchasing a Magnox or AGR nuclear reactor, and whether he is optimistic about a sell-off?

The Earl of Dundee

My Lords, with respect, I think that is a little wide of the Question.

Lord Molloy

My Lords, perhaps I may ask the Minister—

Noble Lords

Order!

The Lord Privy Seal (Lord Belstead)

My Lords, with respect, I believe that my noble friend Lord Nugent had a good point. Perhaps we can return to this subject on another day.