HL Deb 18 January 1990 vol 514 cc737-9

3.15 p.m.

Lord Hatch of Lusby asked Her Majesty's Government:

What estimates of the total cost of Sizewell B have been submitted to them by the CEGB.

Viscount Ullswater

My Lords, the most recent estimate of the cost of Sizewell B was that which the CEGB advised to the Hinkley Point C Inquiry in the autumn of 1989. The board then said that the estimate was likely to increase by 10 per cent. This gave a total of £1.86 billion at 1987 prices.

Lord Hatch of Lusby

My Lords, I thank the Minister for that Answer. Is he aware that the figures which were given to the Hinkley Point Inquiry represent an 11 per cent. increase over the original cost at gross prices and a 25 per cent. increase at real prices taking inflation into account? Are not the costs of building Sizewell B escalating out of all proportion? Would it not be much cheaper either to scrap Sizewell B altogether or to transform it into a gas-fired station?

Viscount Ullswater

My Lords, the CEGB's statement also identified that the extra costs were mainly the result of developments in design, including additional requirements to meet safety commitments, and the increased costs were those of establishing a first-of-a-kind design in full detail. On the noble Lord's second supplementary question, the Government are firmly committed to the establishment of this station in order to secure the supply and the diversity of supply that the nuclear power station will give.

Lord Williams of Elvel

My Lords, is the noble Viscount aware that the CEGB evidence to the Hinkley Point Inquiry was submitted before the Government's decision to cancel the three other PWRs? Is he further aware that as a result of that decision between £200 million and £400 million in extra costs—that is the estimate of the University of Sussex —will be loaded onto Sizewell B rather than spread across the four PWRs?

Is the noble Viscount also aware that the cost of the Hinkley Point Inquiry incurred by the CEGB and the cost of other PWRs that have been cancelled is an extra £44 million which again now has to be considered as part of Sizewell B? Who will pay for that? Will it be the taxpayer or the electricity consumer?

Viscount Ullswater

My Lords, I cannot go further on the costs than I have already. Those are the figures that the CEGB has prepared. There are no other figures available. I do not think that I should comment on the costs that the noble Lord has put forward. The Hinkley Point C Inquiry has been brought to a conclusion and the report is awaited.

Lord Stoddart of Swindon

My Lords, will the noble Viscount confirm that the country, the Government and the consumer have already been victims of slipshod accounting, to say the least, on the part of the CEGB? How can we be sure that the figures that have now been given to the Government for the total completion cost of the PWR at Sizewell are any less slipshod? Will he now give an estimate of what the cost to the consumer of electricity produced by Sizewell will be?

Viscount Ullswater

My Lords, the CEGB has undertaken to carry out a review of the costs of Sizewell B. The board expects to complete the review in two to three months' time. The present expectation is that there will be a single price for all nuclear output, and that is currently the subject of commercial negotiation.

The Earl of Lauderdale

My Lords, does my noble friend agree that the escalation of costs for Sizewell B is in line with those for the Channel Tunnel and that it is common for large enterprises to be involved in such escalations?

Viscount Ullswater

My Lords, yes. Safety considerations are an important factor. Thus the increase in civil works costs was affected by detailed safety analysis of seismic requirements. The increased costs to the nuclear steam supply system excluded expenditure to meet additional safety requirements agreed with the Nuclear Installations Inspectorate.

Lord Stoddart of Swindon

My Lords, is it the Government's intention to make a Statement to the House after the review has been carried out by the CEGB?

Viscount Ullswater

My Lords, we should wait and see what the review has to say.

Lord Jenkins of Putney

My Lords, as it is most important that we should know, will the Minister assure us that when the review has taken place the Government will come to both Houses and give Members the opportunity to assess the real question of whether in all the existing circumstances the project should proceed at all?

Viscount Ullswater

My Lords, I shall pass on the noble Lord's comments to my right honourable friend.

Lord Hatch of Lusby

My Lords, the Minister's figures show that the cost of the nuclear power station will be at least £2 billion. Is he aware that according to the Government's own figures an investment of £3.8 billion in energy efficiency could reduce the cost of the United Kingdom primary energy used by nearly 20 per cent., reduce the carbon dioxide emissions which cause the greenhouse effect by 30 per cent. at current levels and save the consumer £12 billion? Would that not be a better investment than continuing the wasteful expenditure on Sizewell B?

Viscount Ullswater

My Lords, the Government believe strongly in increasing energy efficiency. However, as I have already said, there is no prospect of higher investment in energy efficiency rendering it unnecessary to build new generating plant.

The Earl of Halsbury

My Lords, will my noble friend confirm that it is useless to try to compare the capital costs of anything built today with something of a parallel character built 10 years ago? It is just not possible.

Viscount Ullswater

My Lords, I tend to agree that the figures are incomparable.