Electricity Privatisation and AGRs (Hansard, 7 November 1989)

§ Viscount Ullswater
My Lords, negotiations are taking place with all parts of the electricity industry on the future arrangements for the supply of nuclear power.

§ Lord Hatch of Lusby
My Lords, is the Minister aware that during the debates on the Electricity Bill, some of us pressed his predecessor, the noble Baroness, Lady Hooper, to inform the House whether all the costs of nuclear energy were being taken into account? Has it not become apparent since then that that was not done? Do the Government agree with the estimate made by Large and Associates, the engineering consultants, that the decommissioning of AGRs would cost between £50 billion and £60 billion? If the Government do not agree, what is their figure for the cost of decommissioning?

§ Viscount Ullswater
My Lords, the Government have never denied the fact that nuclear power is more expensive than fossil-generated power. However, nuclear has a vital strategic role to play in security of supply. It is because of these additional costs that we need the non-fossil fuel obligation. Electricity customers benefit from diversity of supply that nuclear provides.

§ Lord Hatch of Lusby
My Lords, will the Minister answer my question? Does he agree with my figure of £50 billion to £60 billion for decommissioning the AGRs? If not, what is the Government's figure?

§ Viscount Ullswater
My Lords, the costs mentioned by the noble Lord, Lord Hatch, are still subject to negotiations between the generating companies and the supply companies.

§ The Earl of Lauderdale
My Lords, will my noble friend inform his right honourable friend the Secretary of State that as the Government have already agreed to take back into the public sector 27 Magnox reactors they may as well take back the other five reactors which are AGRs?

§ Viscount Ullswater
My Lords, my noble friend may have the number wrong. I believe that we have only eight Magnox stations although we may have more reactors. However, I take his point and I shall pass on his comments to my right honourable friend the Secretary of State.

§ Lord Mason of Barnsley
My Lords, does the Minister recall that the paper prepared by the 545 Department of Energy, and submitted to a sub-committee of Cabinet on the privatisation of electricity, stated that the cost of nuclear-produced electricity will be roughly double that of coal-fired stations? Will the Minister confirm that assessment? Secondly, will he confirm that before Her Majesty's Government can go ahead with the privatisation of electricity they must seek exemptions from the Common Market competition law?

§ Viscount Ullswater
My Lords, I shall not comment on every speculative figure which is bandied about. Many of the figures which are quoted and requoted in the press—

§ Lord Mason of Barnsley
My Lords, they are in the paper.

§ Viscount Ullswater
My Lords, they are wild guesses and others certainly manifest errors and inaccuracies. The level of fossil and non-fossil fuel prices, and as a consequence the rate of any levy, are the subject of negotiations now taking place.

§ Lord Molloy
My Lords, what information does the Minister have to support the statement that some articles appearing in responsible sections of the British press contain wild calculations or statements? What information does he have on which to base that statement?

§ Viscount Ullswater
My Lords, I said that what is quoted in the paper may be one thing but I am not prepared to speculate on it.

§ Lord Hailsham of Saint Marylebone
My Lords, is it not the case that the Question relates to taking out of the privatisation programme certain gas cooled reactors and are we not straying wildly beyond that Question when we start arguing about the merits of coal and the relative costs of decommissioning? If those questions are to be asked, would it not be better if they were put down on the Order Paper?

§ Viscount Ullswater
My Lords, I am always grateful to my noble and learned friend for his wise counsel.

§ Lord Williams of Elvel
My Lords, would the Minister care to explain to his noble and learned friend that it is a question of putting together a prospectus for National Power, that the costs of decommissioning—whether £7 billion, £10 billion or more—are substantial and that they must be properly verified when making out a prospectus for National Power? If the AGRs are taken out of National Power the prospectus is relatively easy to write. If they are not taken out of National Power then, in my view, the prospectus is impossible to write and I said so in this House on Second Reading of the Electricity Bill. Will the Minister therefore explain to his noble and learned friend that questions on the costs of decommissioning and the Government's precise figures are supremely relevant?

§ Viscount Ullswater
My Lords, I have already said that negotiations are taking place on the future 546 supply of nuclear power. I really cannot pre-empt their outcome.

§ Lord Hatch of Lusby
My Lords, is the Minister aware that the figures that I gave came from a company whose representatives gave evidence to the House of Commons Environment and Energy Committee and that they are not figures thrown about in the press? He has still not answered the question as to whether the figures are accurate. If they are, does he agree that privatisation of the nuclear programme becomes totally impossible?

§ Viscount Ullswater
My Lords, I have already said to the noble Lord that the figures which he quotes may contain some truth. However, what is important is that there is nothing which I shall say to confirm or deny them. They are subject to negotiations between the power generators and the suppliers.

§ Viscount Hanworth
My Lords, for a long time many of us have thought that the only sensible answer is to retain the nuclear power stations temporarily under Government control. Can the Minister say why the Government are not prepared to take that sensible action?

§ Viscount Ullswater
My Lords, I can only repeat what I have already said; negotiations are taking place and I cannot pre-empt their outcome.