§ Viscount Hanworth asked Her Majesty's Government:
§ If projected gas-fired generating stations are constructed, what proportion of natural gas overall will be used in running them and whether this is a sensible use of a limited resource which is likely to become increasingly expensive.
§ The Minister of State, Department of Trade and Industry (Lord Strathclyde)My Lords, the Government's policy, as stated in the Coal White Paper, is to create a fully competitive energy market in which decisions on fuel choice for power generation are best left to the generators answerable to their customers.
§ Viscount HanworthMy Lords, I thank the Minister for that reply. Does he agree that the commercial incentive to produce more power from gas turbines, and so on, is rather extreme and that, in the long run, that may not be in the national interest? Will he take some steps to control future developments in the industry? Finally, the Minister has not answered my Question at all. My own information—if it interests him —is that the amount of energy used by nuclear power stations would be at least 20 per cent. of our national gas requirement.
§ Lord StrathclydeMy Lords, I am sorry that the noble Lord does not feel that I have answered his Question. I always come to the House with the greatest intention of doing justice to any Questions that are put to me. I do not agree with the noble Lord. I believe that my Answer is the correct one to give. It is central planning that has failed. The market is in much the best position to decide which kind of fuel to use in terms of power generation.
§ Lord SkelmersdaleMy Lords, is not the premise behind the noble Viscount's Question somewhat at fault? Did not the Department of Trade and Industry very recently produce figures showing a 16 per cent. rise in the output of gas in the last quarter as compared with the previous quarter?
§ Lord StrathclydeMy Lords, my noble friend's question is very helpful. It demonstrates that it is not very useful to use forecasts of available fuel. I understand that in the United States of America the forecast for the use of natural gas has been set at some nine years—and that has been the case for the past 20 years!
§ Lord Stoddart of SwindonMy Lords, if the market decides, why do we have the nuclear levy?
§ Lord StrathclydeMy Lords, that is an entirely different question from that set down on the Order Paper.
§ Lord EzraMy Lords, in connection with the Question that was asked by my noble friend, can the Minister indicate to us what progress is being made in the concept of a gas interconnector with the Continent? That could obviously materially affect supplies.
§ Lord StrathclydeMy Lords, that will be a decision for the market to take in due course.
§ Lord ShepherdMy Lords, the Minister referred to the market. Can he help the House in regard to the report on the proposals that the regulator has in mind? When can the House expect that report, which I believe has been delayed for some time?
§ Lord StrathclydeMy Lords, announcements will be made shortly about the role of gas, the report of the gas regulator, and so on.
§ Lord ShepherdMy Lords, what does the noble Lord mean by "shortly"?
§ Lord StrathclydeMy Lords, "shortly" in this case means very shortly.
§ Lord PestonMy Lords, the answers are getting better by the minute. I take it that the Minister is really giving his usual answer to all questions on energy; namely, that the Government do not have an energy policy and that the free market will do the job. Does he accept that the premise that lies behind that position is that the price of gas on the free market reflects its true value and that the objection to that is that it is widely believed that the free market is unable to price correctly the value of an exhaustible resource such as gas? Does he agree that that is the central point? Do the Government believe that the price of gas on the free market, no matter what it is, is always the correct price?
§ Lord StrathclydeMy Lords, I refute what the noble Lord said about the Government's lack of an energy policy. We do have an energy policy and it is a very clear one. The policy aim is to ensure secure, diverse and sustainable supplies of energy at competitive prices. The competitive market is not always perfect, but it is still the very best way that anyone has found to trade sensibly on a long-term basis.
§ Lord PestonMy Lords, we do not want to bandy words about, but there is absolutely no doubt that the Minister's reply was simply another way of saying that the Government have no policy in the sense of doing anything. Their policy is simply to stand back and let the free market do it. Will he at least confirm that he has said that to me at least six times this year?
§ Lord StrathclydeMy Lords, allowing the market to make these decisions is very much a positive policy and a positive decision that has been taken by the Government.
§ Lord Hailsham of Saint MaryleboneMy Lords, if the free market is not always right when it predicts or seeks to fix the price of a commodity, is there any reason to believe that central planning, which has so often failed in the past, will be any better?
§ Lord StrathclydeMy Lords, this is where my noble and learned friend has such an advantage over me—his historical perspective. His great knowledge of what socialism and central planning have done to this country over decades is tremendously useful in making the point.
§ Lord MolloyMy Lords, does the Minister appreciate that what he has just said and attributed to his noble and learned friend is, in my view, wrong and will cause great consternation to those who rallied to the country when public ownership was the only way in which we could reassert ourselves before and after 1945? Does he further agree that some acknowledgment ought to be made of that? Will he give this House an assurance that in the event of a threat to this great industry the Government will immediately take precautions to protect it, not on behalf of the Labour Party, Tory Party or any other party but on behalf of the British people?
§ Lord StrathclydeMy Lords, in the event of a national emergency things may well change. But we are not faced with a national emergency. We have a clear and concise policy that currently is working.