§ Mr. Geoffrey Johnson Smith (East Grinstead)
I beg to move,That this House seeks a better understanding by the public of the nation's future energy needs, of the various threats to the nation's ability to meet them adequately, and of the strategies that are open.Despite popular opinion, this House has been capable over the years of reaching a wide measure of agreement on many issues. On energy, we have shown over the years that we are capable of reaching a sensible agreement and one that I hope will give much heart to the Ministers responsible for these matters.
Since 1973 we have recognised that our country depends far too heavily on imported oil supplies. Any vestiges of hope that 1973 was a momentary hiccup in an otherwise stable situation of dependable and abundant supplies of oil at reasonable prices were rudely shattered by the events of 1978–79. In one year, oil prices have doubled and depletion policies have been introduced—I make no complaint about that, since we have such policies ourselves—by countries such as Iran. The world therefore is burning more oil than it is producing and it is producing more oil than it is discovering.
Oil is therefore too valuable a fuel to burn indiscriminately. It is needed by industry, and will be increasingly needed as the years go by, for more productive purposes. We in the West—not just this country—have had to recognise that our supplies of oil come from areas of considerable political instability. That is why President Carter recently warned that any act of aggression from an outside Power—he had principally in mind the Middle East—would be met by force.
Despite our oil reserves, it is widely agreed on both sides of the House that they are small in relation to world demand and can help us to become self-sufficient for only a brief period during the coming decade.
We must also recognise that Government can protect the future of our industrial society—that is, our standard of living—only by developing other sources of energy, and that involves taking decisions now. There can be no grounds for delay, for such is the scale of the 956 investment that is needed that it takes a long time before any decision that we take now is fulfilled.
I am not suggesting that those views are not challenged. Many hon. Members on both sides of the House will be aware that there are those who question the official forecasts of future energy demand. They think that the amount of energy that will be required is exaggerated, but there are others who argue that we have underestimated our capacity to meet that demand. There are also those who argue that rather than pay what will be a heavy bill for investment in this country, both coal and nuclear, we should change our way of life and opt for a more modest style.
Whatever we may think about the reliability of forecasts—and we have lived through a few in our time, including a few the particulars of which I have with me—we must recognise that we are talking about energy forecasts that leave only 20 years or so for us to discover whether we are right or wrong. That is not long in terms of an energy cycle. In the end, the House can act only on the best information that is honestly given to it. I believe that we would be failing in our duty to the nation if we did not accept the energy forecasts that are before the House.
I think that the Opposition Front Bench accepts those forecasts just as much as the Government Front Bench does. I believe that that is why the majority of hon. Members have concluded that despite the problems connected with our kind of industrial society—and there are plenty—the overwhelming majority of our citizens would rather have such a society, problems and all, than go back to a pre-industrial age. The illusion—and we must persuade the public that it is an illusion—is that one can have the obvious material benefits of an industrial society without a sound energy base. We cannot. I have no wish to consign future generations of this country, starting with my own children, to a life as it was lived 150 years ago by the mass of our people, and as it is still lived by millions of men and women throughout the world—a life that we can describe as nasty, brutish and short—because we funk making important decisions.
There is also a wider and moral reason for urgent action. The report of the 957 Brandt Commission, whose membership consisted of some of the most distinguished world politicians and statesmen, including a former Prime Minister of this country, emphasised the great need of the nations of Asia and Africa for energy. It pointed out that a small percentage of the world's population, principally in Europe and the United States, could not continue to gobble up the world's finite fossile fuels. Fortunately for us, who live in an advanced industrial nation, there are many options open, which is more than can be said for those who live in the so-called developing world.
We do not have to go back to a nineteenth century coal economy, with all the miseries that that involved, not only for those who worked in it but also for the wider environment, with the risk of carbon dioxide pollution. In any case, as those hon. Members who represent coal mining constituencies know, it will not be too long before coal will be used for more valuable chemical purposes and as a substitute for natural gas. It will no longer be tolerable to burn it on open fire grates.
I am grateful to see present my hon. Friends the Minister of State and the Under-Secretary of State who is responsible for the coal industry. The strategy, which was accepted by the previous Government just as it has been by my right hon. Friend, is a strategy based on coal, conservation and nuclear energy—the so-called co-co-nuc strategy. It is the last of those three strands that causes most confusion and controversy. If the need for an expanded nuclear contribution were not accepted by the public, I believe that would pose a very serious threat to the success of the strategy as a whole. That is why I believe that this House should back every effort to help public understanding of the limited but vital role which nuclear power has to play. I say "limited role", because there is no evidence so far as I know—though I stand to be corrected—which suggests that our future must be wholly dependent on nuclear power.
There are other technologies, such as wind and tidal power, and solar energy, whose potential needs to be assessed. Research is now going on in this country, on a European basis, and in the United 958 States, into nuclear fusion, which if successful could provide man with an infinite source of pollution-free power. But a coal, conservation, nuclear strategy can give us time to search for alternative energy sources as well as time to develop them.
In my view, it does not make sense to suggest, as some people do, that we can do nothing without nuclear power altogether. Nor should we be frightened away from using nuclear power. Much of the public resistance to nuclear power is based on fear. I do not want to make light of that, because in the minds of some people there is a genuine fear of nuclear power However, there in an irrational aspect to that fear. The irrational fear is that the nuclear reactor will blow up just like an atom bomb. But, as I am sure hon. Members on both sides of the House will realise, that could no more happen to a nuclear reactor than it could to a bag of chips.
There is the more rational fear of the delayed and unseen dangers of radiation. All hon. Members are trained to think in terms of thresholds. We believe that once a limit has been exceeded we get into trouble. That applies not only to radiation but to other matters. There are some who argue that radiation is an exception; that there is no such thing as a threshold; that any amount of radiation is bad; and that we should do nothing whatever to increase radioactivity in the world. They may be right. I do all that I can to avoid unnecessary X-rays. If as the distingulished scientist, Sir Fred Hoyle, writes in his book "Commonsense in Nuclear Energy", the amount of radioactivity experienced by those in the area of the Three Mile Island incident near Harrisburg was less than the amount which was experienced in a two-week holiday in regions of abnormally high radiation—he gave examples of Dartmoor and the Scilly Isles—we, as planners of energy policy, should not be deterred by risks of that order.
The United States National Academy of Engineering put the risk in the following way:The exposure to radiation of those living within 50 miles of the plant"—that is, the Three Mile Island plant—has been estimated to average 1 millirem. That is the amount normally retained from 959 natural resources after three days of living, or perhaps one-third of that received on a jet flight across the country.No one in the House or the country would suggest that we should be deterred from flying by jet. I dare say that a jet-setting business executive would be thought pretty eccentric if he turned up at London Airport wearing a lead suit. We accept that sort of risk when we fly, and we accept rather greater risks when we get into our motor cars, but somehow, when it comes to nuclear energy, risks of that order of magnitude—which are less—become grossly exaggerated.
§ Mr. Nigel Forman (Carshalton)
Does my hon. Friend accept that in this tricky area there is an important distinction between voluntary and involuntary risk? Many people, not only in Britain but abroad, are worried about the voluntary and long-lived nature of some aspects of nuclear power.
§ Mr. Johnson Smith
I respect that point. However, we have come to live with involuntary risks, with the development of the chemical industry, which has its own forms of pollution, and with the coal industry, in respect of carbon dioxide. Obviously we would not wish to live in a society in which there are too many involuntary risks, but my argument is that we have come to live with a certain measure of involuntary risk. I see no great distinction in making an exception in the case of nuclear power.
We of all people should not expect power to be produced without any risk. We in Britain, with our long-established coal industry, should know that. By any statistical yardstick, the nuclear industry heads the list in safety, and its effects on the wider community stand more than favourable comparison with the coal industry.
I agree with Sir John Hill, the chairman of the Atomic Energy Authority, that the rate at which the industry can progress will be determined not by the speed of technology but by public acceptance of what the industry is trying to do. It will also be determined by the public's perception of there being no unacceptable rate of accident. It must also depend, in a democracy such as ours, on the willingness and ability of the media to treat the subject objectively and in an understandable manner.
960 Over the years, the media, unwittingly on occasions, have contributed to an unbalanced presentation, because of their emphasis on disaster. That is not the only area in which the press concentrates on disaster. Bad news, so I am told, is news. There is no such thing as good news; it is always bad. We must learn to live with it in nuclear power. There is an emphasis on disaster, and too frequently—this is an area in which we should expect something better of the media—articles confuse possibility with probability.
Those shortcomings can arise and have arisen because the presentation of the facts by scientists and nuclear engineers has often been confined to specialist groups. We have heard them speak at specialist meetings, and they attend Committee proceedings in the House. They are very impressive. They have a difficult communications problem, but it is gratifying to note that recently they have become more aware of the need to communicate with the wider public, and to speak directly to them.
It is therefore all the more regrettable that during the past few weeks open verbal warfare has broken out between the deputy chairman of the Atomic Energy Authority, Dr. Walter Marshall, and the science editor of The Guardian. When the editor of Nuclear Engineering also appears to have problems with The Guardian one begins to wonder what hope there is for a sensible rational discussion.
The editor of Nuclear Engineering writes:In his enthusiasm for blaming everything from the common cold to the rate of inflation on nuclear power, Anthony Tucker"—the science editor of The Guardian—has excelled himself.However exaggerated that stricture may be—I do not wish to make any judgment —there appears to be no excuse for that newspaper publishing an article claiming that a report by the Nuclear Installations Inspectorate rejected the report of a study group headed by the venerable Dr. Marshall. It was not the Nuclear Installation Inspectorate. The science editor of The Guardian got it wrong. There is little wonder, therefore, that Dr. Marshall should say in his reply to The Guardian:Factual and avoidable errors should not form part of major articles on nuclear issues.961 Dr. Marshall is right. The Guardian is also right when it states that:There is not one body of received nuclear opinion.There is all the more reason, therefore, why the press and the scientific world should ensure that debate is conducted at the highest possible standard. I understand that the BBC is also not without its critics from the nuclear fraternity.
We can do something about that. We should take a leaf out of the book of President Carter's commission on the Three Mile Island incident—the Kennedy Commission. It made a number of recommendations. In essence, it called upon the media, regardless of size, to hire and train people who would familiarise themselves with the nature of reactors, and with the language of radiation. In particular, it recommended that resporters should educate themselves to understand the pitfalls in interpreting answers to "What if?" questions. It stated that reporters covering an accident should have the ability to understand uncertainties expressed by sources of information and probabilities assigned to various possible dangers. According to one view that was put to the Kennedy Commission, too much emphasis was placed on the "What if?" rather than the "What is?" question. As a result:the public was pulled into a state of terror, of psychological distress.It is as though we were constantly asking the airlines "What if a jumbo jet crashed on central London or on Wembley Stadium on Cup Final day?" It is possible that that could happen, but the possibility is remote. We have now given up putting that type of question.
I suggest, therefore, that the nuclear industry, the media and the Central Electricity Generating Board should arrange a series of conferences at national, regional and local levels so that they can get into one another's minds and understand the true nature of the problem. I ask the Government to consider what they should do to inform citizens who are likely to be affected by the building of nuclear sites. There are a number of areas in Cornwall where it is proposed to build nuclear sites. Often people acquire knowledge during a public inquiry. I suggest that there should be meetings that precede public inquiries.
962 Another threat to the understanding of nuclear power is the manipulation of information by anti-nuclear groups. The Flowers report, the sixth report on environmental pollution, got it about right when it observed:We have no doubt that some who attack it are primarily motivated by antipathy to the basic nature of industrial society, and see in nuclear power an opportunity to attack that society where it seems likely to be most vulnerable, in energy supply.I am not referring to Friends of the Earth or the Council for the Preservation of Rural England, which have genuine reservations and motives.
I should like to comment on an important but no doubt less controversial aspect of the Government's energy strategy—conservation. We are told that the investment required to increase the production of coal by 50 million tonnes a year is around £10,000 million. The 12 nuclear reactors that the Government feel should be built will cost a few thousand million pounds more than that. It is a prodigious investment.
In the United States—it is probably also true in Britain—it has been worked out that it is now a better investment to save a British thermal unit than to produce an additional one. Half the energy in Britain is wasted, and therefore the opportunities for saving are enormous and rewarding. If the required investment in coal and nuclear power is prodigious, it only underlines the importance of conservation. I hope that the public will understand that by conservation we mean something more than switching off an appliance, insulating a loft, or wearing an extra sweater. Conservation means making more effective use of our energy and it involves the introduction of a whole range of new technology.
Thanks to microprocessors, we now have new control systems that, while still maintaining industrial objectives, reduce energy use as well as comfort conditions to an acceptable level.
I hope that the Minister will be able to tell us what progress this country is making on energy conservation. The EEC has set targets. What co-operation have we with the EEC? How well do we compare in that respect with our European friends?
963 I am associated, in a most humble capacity, with a company that is involved in demand management. I have a non-executive role and I am not even paid. But at least it puts me in a position to assess the reaction of some companies. There are too many companies in this country that show a distinctly apathetic attitude towards investing in conservation technology.
The head of the conservation technology unit in my hon. Friend's own Department said last year:We have the inconsistency of investing with a pay-back period of 10, 15, 20 years in energy production, yet when we look at energy conservation we use a two or three-year period.I ask my hon. Friend what is the scope of the conservation programme in his energy strategy, bearing in mind that his Department has announced that conservation grants are to end in June? If he intends to rely on the price mechanism to encourage economy, I make no serious complaint about that. When people are considering whether to waste a product, price can concentrate the mind wonderfully.
Will my hon. Friend also consider introducing cash repayments for schemes that show definite savings? This is done in France. What consideration has my hon. Friend given to introducing legislation to ensure that approved energy demand systems are installed in all buildings, with penalties for non-compliance?
In that interesting and provocative report "A low energy strategy for the United Kingdom", the author, Gerald Leach, may have gone overboard for conservation at all costs, without paying sufficient regard to economic feasibility and the social acceptability of it all, but he illuminated the opportunity and benefits of conserving energy, and we are very much in his debt. What makes conservation policy so attractive is that it is a policy in which the citizen himself can play a part. He can make his personal contribution and he can benefit from that.
I should like briefly to sum up my argument. It is that this whole conservation and nuclear strategy is the best that we can devise, given the state of our technology. We are living in an age of transition. Procrastination, in the hope that the problem will go away or that 964 there is some perfect solution, will only make things worse. There could be nothing more dangerous than having to depend on a crash nuclear programme at the end of the century precisely because we have neglected now to adopt a more steady and orderly programme of nuclear development.
The strategy adopted by the Government, supported by the Opposition, will give us time to look round and develop other sources of energy. The American National Research Council's committee on nuclear alternative energy systems put the matter in this way:The problem is in effecting a socially acceptable and smooth transition from gradually depleting resources of oil and natural gas to new technologies whose potentials are not fully developed or assessed and whose costs are generally unpredictable.That, in effect, is the message that we have got to get across to the country.
§ Mr. David Penhaligon (Truro)
The hon. Gentleman, in the course of making some good points, referred to Cornwall. My constituents would like to know why it is proposed to build 1,350 MW nuclear reactors in far-away places such as Cornwall, when, clearly, sites could be found much nearer to areas of population, such as at Battersea, in London. Why must the sites be in areas far from the centre?
§ Mr. Johnson Smith
I am sure that the Minister, with his detailed knowledge, will be able to reply to that question. My own reaction would be that we already have nuclear reactors in other parts of the country. There are two in semi-urban areas. The one at Dungeness is very close to my constituency. My hunch is that there is probably a shortage of electricity in the western part of the country and that there is need for power development there.
§ Mr. Arthur Palmer (Bristol, North-East)
It may help the hon. Gentleman if I point out that the national grid network badly needs a boost in that part of the country.
§ Mr. Johnson Smith
That is what I was trying to say, but the hon. Member for Bristol, North-East (Mr. Palmer) put it much more succinctly and accurately than I was able to do. I am much obliged to him for his intervention.
965 I was saying that the age of transition gives us time in which to find alternative energy sources. It is not just a question of science or economics. Far-reaching decisions are involved, affecting the future of our country. That is why I believe that it is the most important political question that we in this Parliament will have to face.
§ 4.5 pm
§ Mr. Arthur Palmer (Bristol, North-East)
The whole House is much obliged to the hon. Member for East Grinstead (Mr. Johnson Smith) for raising this subject this afternoon. It is no reproach to him if I say that he has not said anything that is particularly new, because the whole ground has been gone over so many times. But there is no reason why good arguments should not be repeated, and I found myself generally in agreement with him.
The hon. Gentleman is right when he says that energy is fundamental to civilisation at all levels. Whether we are talking of past water mills and windmills, or the former power of animal muscle or human muscle, or these days' nuclear reactors, civilisation always needs energy.
It is also true that without energy supplies in massive quantities, modern Western society would collapse. It can be convincingly argued that without the cheap and abundant oil of the period from the 1950s to the early 1970 the great post-war jump in Western living standards would probably not have taken place. The new political and financial limitations on those cheap and abundant oil supplies are causing today's stresses and strains on both sides of the Atlantic. Many of us would argue that higher energy prices have been the major contributor to the inflation of the currencies in the West.
But now the harsh truth about our material civilisation in the West is emerging. It is that our civilisation is based on taking from the earth nature's own store of coal, oil and gas; that those resources are finite; and that unless alternative sources are found and used, Western civilisation—or, indeed, civilisation generally—will last only as long as the fossil fuels last.
It is always possible to contend—the hon. Gentleman dealt with this—that our 966 present mode of life in the developed world is rotten and corrupt and that, by some means unspecified, we should return to a simpler and materially poorer way of living. That is only another way of saying that we should abandon the fight against poverty and let deprivation spread itself as widely as possible. But what would we do then about the ever-growing populations that have been made possible as a result of abundant energy applied to industry and agriculture? This question applies not only in our own country and much of the Western world but in the world generally.
It is, therefore, fundamental that we should develop the alternative sources of energy. It may be that the fossil fuel sources—coal, oil and natural gas—will last considerably longer than is now anticipated, but, in the very nature of things, once they are taken they cannot be replaced.
A point that is not often made is that among the alternative sources of energy one must place nuclear power first and foremost. There is a tendency to see the wind, sun, waves and tides as alternatives to nuclear power. They are nothing of the kind. Nuclear power and the others are all alternatives to fossil fuels, and some might say that they are coming along just in time. I am not arguing that the wind, waves, tides and sun cannot all play their part as new sources. They can; but they are not opposed to the uranium source; they are complementary to it.
The biggest question of all is quantity, or "How much energy?" I have one or two figures that may meet with general assent. These figures may help us to calculate our energy needs over the next couple of decades. One can work on similar equations for other Western countries.
In 1977 the energy consumed in the United Kingdom for all purposes, including transport, expressed in terms of coal or its equivalent, was 360 million tons, give or take 1 million tons. About one-third of that energy was provided by coal, a little under two-thirds came from oil and natural gas, and about 4 per cent., which makes 100 per cent., was shared between nuclear and hydro power—about 14 million tons of coal equivalent. So the nuclear contribution to our energy equation is small at the moment. It is about 4 per cent., and we could probably 967 throw in about 1 per cent. for hydro power, mainly in the North of Scotland.
What is likely to be the demand for energy in 20 years from now, at the turn of the century? Taking the lowest possible realistic annual growth of 1 per cent. or 2 per cent.—which is low indeed when one considers the industrial growth of this country since the War—a rough and ready estimate gives an energy requirement of 500 million tons of coal equivalent by that time. How is that demand likely to be satisfied, allowing for improved energy conservation? I agree with all those who say that it is essential to conserve energy and that we must work on that, but I believe that most people will accept the forecast, even remembering how fallible prophecy is, especially in connection with fuel and power, and keeping our fingers crossed.
The expected contribution of fossil fuels by the end of the century will be about 300 million tons of coal equivalent. Estimated savings from improved conservation—this would be a considerable improvement—would be about 30 million tons of coal equivalent, and the development of renewable sources, which is a more exact term for the tides, wind, waves and sun, will be 25 million tons of coal equivalent. Again, that is possibly a little optimistic.
From that calculation it will be seen that there is a shortfall of approximately 145 million tons of coal equivalent that can only come from nuclear fission, because there is nowhere else from which it can come, allowing for technical, economic, political and social restraints in a free society.
Naturally, if we produce more coal than at present seems possible; if we could afford to use more oil; if the wind, the waves and the sun give forth their abundance in double-quick time; if the public have a change of heart, drive at half the speed—of which there is little sign on the motorways at present, in spite of the price of petrol constantly rising—insulate their lofts and wear thicker underwear in winter, the increased nuclear contribution could conceivably be smaller.
But the electricity generating authorities—I speak with some knowledge and declare my interest in that industry—cannot proceed on the basis of "ifs". New power stations take up to 10 years 968 to plan, obtain consents for, build and commission, so the electricity authorities are not in the position of thinking about what will happen next year, the year after, or in five years from now; they must look 10 or 15 years ahead and plan accordingly. There was a time, not so long ago, when the country was suffering from load shedding and cuts of electricity supplies, which does not help industrial productivity.
In addition to the time taken to plan, design, develop and build power stations, worn-out and inefficient plant must be taken out of service according to planned schedules of redundancy arranged well in advance. Indeed, the overall thermal efficiency of the British electricity supply system is not as it should be, because too much oil and inefficient plant is still in use.
Whatever our views on nuclear power—we may feel that it has dangers different from anything else that we have so far known—we must accept its use. The hon. Member for East Grinstead went into the question of risk. I will add another figure to his collection that might interest the House. It is generally reckoned that under normal operating conditions there is more radioactivity from a coal-fired power station than there is from a nuclear station. That apart, and judged by the safety records so far, surely there has never been an industry in the history of new technology that has had the safety record of the nuclear industry over the past 25 or 30 years.
As the hon. Member for East Grinstead said, anything might happen in future. We can judge only on the basis of probability. Therefore, I say to the Government and to the Minister that I think that we are right to proceed with a moderate nuclear power programme. I shall not go into the question whether we should favour the pressurised water reactor in future or whether we should continue with the advanced gas-cooled reactor. At the moment the Select Committee on energy, of which I have the privilege of being a member—I see that the hon. Member for Havant and Waterloo (Mr. Lloyd) is present; he is the Chairman of that Committee—is looking into these questions in great detail.
I have never been especially enthusiastic for PWRs, but in the end I do not 969 think that the House, or even the Select Committee on energy, can choose a reactor for the generating authorities. That is something that they must choose for themselves if they are to have free and independent management responsibility. We in the Select Committee can draw the attention of the House to the alleged risks and the dangers that might arise. We can take evidence from such eminent men as Sir Allan Cottrell—as we did in Committee last week—who, without any hesitation, said that he would not be in favour of a PWR. He is an AGR man, and wants us to go on along that road. However, in the end, having appointed, through the Minister, a body of experts to run the electricity supply industry, Parliament cannot politically go against their honest technical and industrial judgment and do their job for them.
I hope that we shall proceed with caution and understanding with nuclear power and shall listen tolerantly to every other point of view that may be expressed. But overriding everything is the responsibility of the present Administration—as it would be of any Administration—to safeguard the energy supplies of this country over the next four decades in sufficient quantity, because without that being done the standard of life of the people of our land will go down and down.
§ Mr. John H. Osborn (Sheffield, Hallam)
The hon. Member for Bristol, North-East (Mr. Palmer) ended his speech by saying what I can only reiterate. He spoke about the next four decades. He has outlined the importance of a nuclear programme and has summarised from his experience the alternatives.
First, however, I should like to congratulate my hon. Friend the Member for East Grinstead (Mr. Johnson Smith) on winning the ballot and choosing the subject of energy. He has done a service to this House and to the country by reminding us of our dependence on oil and the small reserves of this country. He has set out to achieve a better understanding by the public of the nation's future energy needs, the threat to the nation's ability to meet them, and the strategies that are open. I should like to touch on that matter later.
970 The value of this debate at this time is the opportunity to ask the Minister of State to summarise the factors that that have changed the situation since general election and to outline in greater detail the difficulties that have to be faced and the pitfalls to be avoided by the Government. This afternoon the House has discussed the work of the party committees, and the evidence which the Select Committee on energy has already taken. There is the all-party energy studies group, which has just been set up, including representatives of the House of Lords, the House of Commons and outsiders, under the chairmanship of my hon. Friend the Member for Canterbury (Mr. Crouch). There is the material study group, under the chairmanship of my hon. Friend the Member for Bedford (Mr. Skeet), which last week had a fascinating presentation from Sir Denis Rooke, the chairman of the British Gas Corporation. Then again, there is the parliamentary scientific committee, which has continuously been looking at these matters.
But these committees, as has already been discussed, tend to examine the alternatives in detail, and not enough thought is being given or can be given by such committees to the political, economic and industrial strategy which is essential if the nation is to choose the right course over the next decades and well into the next century.
I have always objected to Christian Democrat and Social Democrat colleagues in Germany, let alone Opposition Members, asking for an energy policy, whether in the European Parliament or in this House, because the variables are so great. The factors of constancy are limited, and there must be flexibility for individual industries and corporations to operate within broad guidelines that are established from time to time. However, I agree with my hon. Friend the Member for East Grinstead that there are decisions that must be taken now, and I hope that we shall learn more of them.
I had hoped to speak in the debate on the EEC energy objectives on 5 February. I would have hoped to put various views on the European policy at that time to the Secretary of State. But since then I had the opportunity of attending a number of meetings about energy and I have had time to crystallise some of my own 971 thoughts. I have been asked what I should like the British Government or the EEC to do, and in public meetings I have had to admit, in the end, that the strategy can be only an Osborn domestic strategy or an Osborn European strategy.
My hon. Friend the Member for East Grinstead referred to co-co-nuc, which is another strategy. I thank him for bringing that in. But I hope that those strategies will appeal to the Secretary of State for Industry and to my hon. Friend and the Conservative Party and to Members of Parliament in the European Democratic Group, as well as elsewhere in the appropriate industries and in the county.
There are, however, two issues that have worried me and others. First, the general public in the Western world—and I am certain that this is true of the United States of America and maybe Japan, as it is certainly for Western Europe and this country—do not see an energy crisis at present. They may complain about rising costs of gas and electricity, and, above all, of petrol. But to talk about a crisis and the immediate threat of a crisis is almost meaningless to them, and this has been proved in opinion polls time and again. Obviously, this was apparent with the British motorist last summer, when he could not find petrol at the pumps. The United States of America became a little more violent, with one or two instances of queue jumping at gas stations resulting in shooting incidents because some impatient motorists had the temerity to jump the queue. But the political uncertainty in Iran has highlighted the insecurity of supply from the whole of the Middle East.
Therefore, it must be a national as well as a European objective to obtain a degree of security of supply, and this means obtaining that security at higher costs because of the uncertainty of overseas suppliers. This has been one object of EEC policy since 1973—greater dependence on own resources and less dependence on external resources.
The second issue that has worried me has been the impact of increased gas prices on the general public and, perhaps, a failure on the part of my right hon. Friend the Secretary of State and his Ministers adequately to explain the issues 972 to the public. I am not being critical. It is hard enough to explain a price rise, anyhow. But in the United States of America the fact that the price of gasolene has doubled in the last year or two—although it is still well below European prices—has been regarded as a conspiracy between the oil companies and the United States Administration. Certainly the recent statement about the rise in gas prices has been put to me, even by industrial users, as a conspiracy between the British Gas Corporation and the British Government. To some it makes nonsense to talk of a need for a rise in gas prices when the profit record of the British Gas Corporation has been so good. I can understand that view. But Sir Denis Rooke, privately, in a Committee of the House, reinforced the view of Members who study these energy issues that a rise in prices is essential for the long term if new exploration and production are to be put in hand, and if it is to be made worth while to supply industrial as well as domestic consumers in five, 10 or 15 years' time.
Already the increase in the gas price will mean that the British Gas Corporation will be able to pay more for its gas to ensure that producers meet the demands of its consumers of tomorrow. This will justify, perhaps, the new gathering line for Strafjord and Cromarty. I hope that my hon. Friend the Minister will touch on this matter because it affects his constituency.
It will justify less flaring of gas, with a greater development of alternative methods of utilising this wasted gas, perhaps by freezing it near the rigs, and bringing it to this country, and, if necessary, selling it elsewhere. It will justify exploration in what have hitherto been considered uneconomic areas for gas or oil. Therefore, this gives the country a greater degree of security over the next four decades—and security is important.
Reference has been made to nuclear energy. The House will know that, nearly 40 years ago, I did quantum physics. Just over 30 years ago, I was working with scientists at Harwell. I learnt then that an atomic energy programme could be developed only on a time scale of at least half a century, and I have lived through most of that time scale already. An energy strategy to save the civilisation of the Western world must be conceived as 973 a strategy not lasting 15 or 20 years—as the Community and the British Government are doing—but as a concept of what is needed in the next 50 years or even for a century hence.
To too great an extent, market forces, and the relationship between poilticians and their constituents, demand jam today and not tomorrow. The challenge of today is that Parliaments and, inevitably, Governments, have not the chance of developing these strategies over such a time scale.
At the weekend I met two groups. One was the Sheffield group of Friends of the Earth, whose president, I believe, is Arthur Scargill, who supports coal. That meeting was attended by members of the Conservative ecology group. I stressed the value of their work in so far as it drew attention to possible alternatives and the need for safety on a nuclear programme. They stressed systems and the use of small water wheels and generators on every stream and considered whether the output from such small generators could be fed into the grid with the possibility of supplying electricity to local users. We discussed combined heat and power schemes. I still think that the heat pump is all important. Of course, there is the cost of solar energy installation and the need for incentives for it. These are alternatives on which I hope the Government will elaborate as time goes on and will provide the incentives to people to take advantage of them.
Of even greater interest was a conservative European meeting in Coventry last weekend. I addressed that meeting on a European energy policy with Mr. Madron Seligman, the chairman of the energy group of the European Parliament. The guest of honour was Gerhard Kunz, the chief whip of the Christian Democrats in the Bundestag. That meeting brought home to me the need to co-operate and work with other members of the Community at this time. A visit to Coventry cathedral after a decade, plus the fact that I had witnessed Coventry being blasted to pieces 40 years ago at the beginning of the war, brought home to me the need to work together on a European and international scale. In March 1978 Canon Kenyon Wright, according to a note in the cathedral, had referred to the fact that generations ago there were 974 divisions within Europe and then went on to talk about divisions between north and south. I feel that there is now a danger of divisions within Europe emerging and resulting in an inability of the north to help the south.
My right hon. Friend the Member for Sidcup (Mr. Heath), a former Prime Minister of this country, recently spoke about the —17 thousand million increase in the cost of oil to the Community and the need to talk of broader issues, including energy, together. The Government have done that.
Last week, at the Fuel luncheon club on the world nuclear energy scene, the Secretary of State made some interesting points. He said that the days of cheap energy had gone for good; that the security of supply was of increasing importance; that the United Kingdom as an oil producer and consumer could help influence political forces; and that the United Kingdom was doing a great deal for the EEC. That is not clearly recognised. Last year we exported 28 per cent. of our production, and well over half our exports went to the Community. I hope that our Community partners realise that.
The confidence of the oil companies is increasing. Yet, despite these good signs, there is a need to develop coal, nuclear power and energy conservation. I could go on to reiterate what my right hon. Friend said, but I now come to the domestic strategy.
Mr. John Feilding of the Bow Group has cirticised the Government on their disappointing progress in returning public enterprise to the private sector. The House has considered proposals for the reorganisation of the electricity industry. Obviously there must now be new arrangements for distribution and a new arrangement for production input, especially from free enterprise power sources.
The first essential is that the monopoly powers must be altered to allow wider private generation, and it would be wise to sell individual power stations to private companies. However, that must be done gradually. Of course, there should be local distribution.
Gas must also be considered. Exploration and production should surely be under the auspices of free enterprise. The creation of the BNOC has been a disaster. 975 This matter needs looking at logically. I do not want a Conservative Government to make any drastic changes, but I should like them to consider these two issues.
In the 1970s the National Coal Board wanted money for oil and gas exploration. I suggested that it should sell a coalfield and use the money for exploration, thereby becoming an energy company, and bringing about other such companies.
I should like to see European and British energy companies extracting gas, coal and oil—including coal from the North Sea, if necessary—generating electricity, whether nuclear or conventional, and selling it to common carriers of gas and electricity. The British Gas Corporation, according to Sir Denis Rooke, is not at all keen to buy Norwegian gas, unless to supply this country's needs, and he is less keen to sell it to our European partners. But he could buy gas from elsewhere. Britain could use its technology and scientfic knowledge for advance in this area. If there were to be the concept of individual energy companies, their field of interest could be Europe. If I had time I would have liked to develop those concepts further, but I will do so on another occasion.
Two factors seem certain. One is that electricity will be the energy carrier of the next century. That means that the electric vehicle will come into being, particularly in urban areas, and there will be greater electrification of transport, including rail transport.
It is interesting that the Friends of the Earth and the electricity consumer bodies are complaining of excess electricity capacity now. The nation may have excess capacity in 1980, but it is a matter of doubt. There is only 25 per cent. or 28 per cent. at the height of a rough winter. With a few breakdowns, the country could have been in difficulties. If the country could count on a European strategy it would be possible to sell electricity to Britain's friends on the Continent—France, Germany, and the rest of the EEC.
On 14 January I asked the Secretary of Statewhat consideration he has given to the concept of building up a surplus energy capacity, whether electricity, coal, gas".—[Official Report, 14 January 1980; Vol. 976, c. 1189.]976 I asked in a written question for figures on the export and import of all energy sources in Britain and the Community as a whole. I was in touch with a member of the European Parliament—Mr. Madron Seligman, chairman of the energy group—and told him what I was doing, because I thought that Britain could be the powerhouse for Europe.
In a Conservative journal called "The European", published by the Young European Democrats, under the heading "A Powerhouse for Europe" I found a reference to a speech that I made on this subject. This article was written by Madron Seligman, and covered much of what I put forward at the Conservative conference in Coventry. Therefore, there is co-operation between the Conservative energy committee in the House of Commons and its opposite number in the European Parliament.
I promised to be brief, as others wish to speak. The Osborn strategy—I hope that the Government will accept it—is a personal strategy. I believe that hon. Members on the Conservative side, with industry and the power industry, must look at the alternatives. I should like to see a build-up of nuclear and alternative sources of electricity supply and preparation to use it, even if it is a vehicle for bringing in hydrogen—as a possible energy carrier. The Government and the EEC—Council of Ministers, Commission and Parliament—must evolve a flexible long-term strategy with industry to allow new technologies to provide the energy and energy carrier of tomorrow. But security of energy supplies is a priority.
Great Britain, vis-a-vis the Community, needs to import food. If the EEC is to have greater interdependence, it must come from the Community. The EEC has to import raw materials. The geographical and economic circumstances of the EEC mean that they must come from other countries. Britain could pay for these imports by becoming the powerhouse of Europe. That would provide employment, which the country will need to an increasing extent for our people, and would provide the energy carrier for tomorrow.
The Secretary of State is aware, as he said in his speech, that Britain can take the lead. I believe that time is running out. It is possible for Britain to extend a hand to our European partners, and 977 together the Community can solve the problems of Europe and achieve greater independence.
§ Mr. Dick Douglas (Dunfermline)
I join other hon. Members in congratulating the hon. Member for East Grinstead (Mr. Johnson Smith) on raising this topic for debate.
The hon. Member for Sheffield, Hallam (Mr. Osborn) will not be surprised that I disagree with him fundamentally on the basis of his analysis. No issue divides us more in terms of market straategy than meeting future energy needs. No issue shows the fallacy of the market-orientated Friedmanite policy of the Government more than the meeting of future energy needs for this nation and for other nations. The oil companies do not believe in the free operation of the market. They never have done, and it is unlikely that they ever will.
I had some regard for the Secretary of State for Energy until I heard him speak at an Institute of Petroleum dinner. At that gathering he dished up—in some respects he spoilt an excellent meal and an excellent occasion—a lecture on the virtues of the Government's market-oriented policy, saying how good it was for us all to accept the dictates of the market. The right hon. Gentleman said that it would do us good, because we should all suffer. He may be a masochist, but consumers are not necessarily masochistic.
It is right for the Government and the Opposition to try to bring home to the electorate the severity not of our position in particular but of the world's position, our relationship to that position, and the relationship of our oil industry to the world's oil prospects.
Oil is an example of the fallacy of the market strategy. The world is faced with the operations of the OPEC cartel. For good reasons or for bad, we have to face the operations of that cartel when it is operating in a declining market or in a market of stringency. Western industrial nations suffered in 1973. More recently they have suffered because of the Iranian crisis. We have suffered increased oil prices. The Government have reacted by suggesting to the BNOC that it should follow the market and not be market 978 leaders. That has been reflected in pricing and taxation policies. There is the potential for huge revenues to be enjoyed by Her Majesty's Government. That will give the Government the potentiality to relieve much of the public sector borrowing requirement problem. That is not the operation of the market; that is the operation of intervention.
The Labour Party has suggested other instruments, and the Labour Government created other instruments of intervention. The hon. Member for Hallam does not like one of those instruments, namely, the BNOC. Would we as a nation have been able to know as much as we now know about the operations of the oil companies if we had not created the BNOC?
§ Mr. John H. Osborn
The BNOC is a regulatory body, and I accept that we need regulatory bodies. They are needed even in the United States and in Britain. In that respect the BNOC has an important role. No doubt my right hon. Friend the Secretary of State will be making a statement about that. However, the fact that the BNOC is involved in regulation and production and is in competition with others has curtailed the interest of other parties. They have been less ready to share their interests with a body that has advantages because of its regulatory privileges. The BNOC as a concept has been a disaster. I hope that my right hon. Friend will reverse the concept. However, I accept that regulation is important.
§ Mr. Douglas
There is no evidence on which to base the hon. Gentleman's assertion. However, if I accept the assertion, the Government's policy of removing the advisory role, and partly the regulatory role, from the corporation has removed some of the criticism that he advances. If the Government privatise the exploration and production side of the BNOC they will meet with the wholehearted opposition of my right hon. and hon. Friends and of others outside the House.
§ Mr. Douglas
We are not moralising about right and wrong; we are trying to indicate a future energy policy. If we are to take the people with us we shall have to accept that the people require some information, some safeguards and some security. There is no point in Conservative Members accusing the Opposition of being doctrinaire and embarking on policies for doctrinaire reasons when in government. They cannot make that accusation when the suggestion is that they are to dismantle an important public arm of information and the searchlight of public accountability. If they do that they will do it for no reason. No oil company desires that course of action.
Is there a Conservative Member who can name one oil company that thinks that the corporation should be privatised now? I am willing to give way to any Front Bench spokesman or to any Back Bencher. It seems that no one wishes to intervene. As I have said, if the Tories embark upon that dismantling they will be embarking upon an extremely doctrinaire policy, which the Opposition will resist. I shall be in favour of bringing the corporation back into public ownership.
The British people demand some assurances about the exploitation of an important and finite resource I turn to the importance in the short term—not in the longer and medium terms—of the Government's depletion policy in our consideration of future energy needs. We shall shortly reach self-sufficiency in oil. In a few years' time we shall be producing in excess of self-sufficiency. However, present prospects indicate that that will be for only a few years. Present forecasts indicate that self-sufficiency will account for about two and a half years of United Kingdom internal consumption. What is done during that period will be crucial. Self-sufficiency will be crucial in buying time with the swing fuel, namely oil. We shall have to buy time to cater for future energy needs. We shall have to buy time for wind and water power, and perhaps solar power. We shall have to buy time for a future nuclear energy strategy. We shall have to buy time for conservation. It is important to obtain answers from the Government.
§ Mr. Penhaligon
Would the hon. Gentleman like to see the policies that he is advocating pursued by the Government of Saudi Arabia? If the Saudis adopt that policy, what consequences does he envisage?
§ Mr. Douglas
That is a good debating point. If the Saudi Arabian Government decided to reduce oil production from about 10 million barrels to 5 million or 4 million barrels we should have something in hand. If we pursue maximum production we shall have nothing in hand.
I have suggested throughout that we should do deals with the producing countries. We are in an extremely favourable position as an honest broker. That does not prevent our leaning on the oil companies, and having an instrument to employ to enable us to lean on the companies, to ensure that our depletion policy is implemented. If the Minister suggests that we should do nothing about a depletion policy—that we should accept various assurances and do nothing about pushing the hump in the curve into the future—I shall be extremely disappointed.
I turn to another example of the fallacy of relying on the market strategy. We are about four years behind in the gas gathering system. We have flared gas unnecessarily. I am aware of the production and technological constraints. However, we are about four years behind our competitors because of the difficulties in bringing competing oil companies together. The Government have been laggards in persuading those concerned that it is in the national interest to create a transmission system spinally to link the smaller fields in the northern section of the North Sea.
§ Mr. Peter Rost (Derbyshire, South-East)
Does not the hon. Gentleman accept that the real reason why we do not have a gas gathering line is that Governments have been too reluctant to allow the market price of gas to rise so that it would have become worth while for the gas to be brought ashore and marketed rather than burnt?
§ Mr. Douglas
No matter which way we take it, that is Government intervention. I am in favour of a Government intervening in terms of the price of energy. The trouble with this Government is that they do not intervene in 981 market terms only; they intervene—not for the sake of energy—to suit their PSBR arrangements. Perhaps the hon. Member for Derbyshire, South-East (Mr. Rost) is delighted to have it both ways, but it would not be right for me to allow him to have it both ways. In order to meet our energy needs the country requires substantial Government intervention and underwriting. An important ingredient in terms of future energy needs is to know our reserves of North Sea oil and gas. We are about three years behind in the deep drilling programme. Again, it would require Government intervention to step up the programme.
§ Mr. Douglas
Perhaps it is the previous Government's fault. I do not deny that. Government intervention is required to get that done.
§ Mr. Douglas
Does the hon. Gentleman believe that the oil companies would go ahead and do it on their own? The oil companies would require to know the licensing system and the conditions that will apply if and when the blocks are allocated. The whole matter requires Government intervention to put it together.
There is no point in arguing that we can solve our future energy needs on the basis of the market. The Friedmanite analysis does not work here. We are trying to call into creative knowledge an area of demand that the consumer cannot demand now because the creation of it will be X years ahead.
§ Mr. Douglas
I have no doubt that the hon. Gentleman has a good point, which the House will hear when he makes his own speech.
I turn to the subject of another swing fuel. No doubt hon. Members will have noted the speech made by Mr. Peter 982 Baxendell of Shell, when he was talking about coal. Particular attention should be paid to that speech, not just because of our indigenous resources of coal on land but, as the hon. Member for Sheffield, Hallam indicated, because there are possibilities, far into the future, of exploiting coal from the North Sea. I do not know what the Government's policy is on this matter. I know that there are constraints of time and the Minister of State said that he would write to me on several issues. I have not had a reply so far. If we are to conserve oil for particular requirements that cannot be met by other fuels, we will need to gasify coal for petrochemical and other products. That is far into the future and, with respect to Conservative Members, the decisions have to be made by the Government setting down the broad outlines of the strategy—not every detail—intervening and giving back. If we had taken the market mechanism system to the extreme we would have closed virtually every pit in Scotland in the 1960s. We came near to doing that under Governments of both parties.
Finally, let me attack the bogus view of the market. The best miners are miners' sons. They are not created overnight by the market mechanism. People are not inspired to go into mining by the destruction of the sociological pattern of villages and communities. That is a vital ingredient, which cannot be assessed in market terms. If any Conservative Member wants me to give way on that issue I shall do so. Miners go down into the bowels of the earth because they are part of a team, and the sociology of that is not measurable in pounds, shillings and pence—I talk in the older currency.
Therefore, if we are looking for an energy strategy we must convince our people that the world is constrained. The OPEC countries in particular are saying "You will not get our oil on the previous basis. We are suspicious of the operation of the multinational oil companies and, therefore, deals must be done Government-to-Government." We must persuade our people to conserve energy. Again, that means Government intervention in terms of insulation, and so on. We have to persuade our people that the resources are finite. We have to persuade not only our people but those in the European Community and in the United 983 States. Thanks to the misuse of the market mechanism in the United States, that country's use of energy has been profligate.
§ Mr. John Hannam (Exeter)
What has destroyed the energy equation in the United States has been the interference by Government in establishing regulations on pricing which have prevented the market from operating and lifting prices to the correct level.
§ Mr. Douglas
I have a certain sympathy for that argument, particularly in relation to natural gas. I concede the point. However, the intervention of the Texas Railroad Commission was a useful method of establishing a regulating authority. The plain fact is that the United States consumers take the view, in view of the history of that country, that there is an inexhaustible source of oil supply. We must try to dissuade them from that view, particularly in our discussions with the President of the United States. That requires an abhorrence of the market mechanism.
Therefore, we have to conserve, the Government have to intervene and set down a strategy and persuade the consumer that we have an energy strategy, part of which is to ensure at the end of the day that the rewards stemming from the natural resources will come to the people as a whole and will not be the profits of a few multinational companies.
§ Mr. Peter Rost (Derbyshire, South-East)
Those brave enough to forecast energy trends would do well to restrain their audacity and use a crystal ball. I regard myself as modest enough to offer only one assertion, and that is that there is no energy shortage, nor need there be, unless politicians meddle sufficiently to create one. There is no energy shortage, only a reluctance to pay the going price for what energy there is. There is no energy shortage, only a shortage of cheap energy. There is no, nor need there be any, energy shortage, but there is a great deal too much waste of energy.
We have the extraordinary scene in this country whereby millions of our people cannot afford enough energy to heat themselves to a decent standard and yet, within sight of their homes, we have a system of producing electricity whereby two- 984 thirds of the fuel put into power stations is thrown away as surplus heat. That surplus heat produces a thermal efficiency of about 30 per cent. That is evidence, if ever there needs to be any, that there is no energy shortage, but a great deal of waste of energy.
The short contribution that I wish to make to this discussion is to present the case that one of our primary energy options should be to do something to eliminate that waste. Waste is the result of misguided political intervention, of subsidised pricing policies, and of a monopoly of bureaucratic and over-centralised planning that results in vast amounts of public money being misspent. Meanwhile, the needy go without heat.
I hope that those who have heard me speak ad nauseam on this subject before will forgive me if I promote yet again the most important energy option available. We must eliminate enormous waste in our system of electricity production, by developing more combined heat and power. That energy option has the greatest potential. It has far more potential than new energy sources such as those of solar, wind, wave and tidal power. Such sources of energy remain in the future and their costings are problematic. Combined heat and power is far more cost-effective over a period of time than the building of more nuclear power stations. I am not opposed to the nuclear programme. However, that programme should be continued in conjunction with the far less wasteful use of existing sources of energy.
The development of combined heat and power should be the first priority when considering capital investment. At present we are at the bottom of the European league in utilising reject heat from power stations. There is an enormous saving to be made. Heat, rather than electricity, is in demand at present, and one must consider the heat loads that could be marketed. We are stupid deliberately to frustrate this source of energy. Combined heat and power will provide the quickest addition to our resources. It is also the cheapest and most cost-effective form of investment.
About 60 million or 70 million tonnes of coal equivalent are now discarded from power stations. That is enough to heat every building in Britain. After years 985 of study and deliberation we are now in receipt of Dr. Walter Marshall's report—Energy Paper No. 35—which was commissioned by the Government. It shows that combined heat and power is economical and technically practical, and it urges early action. It also shows that the rest of the world has been doing this for far longer than we have. We are botttom of the league, and we lag ever further behind because other countries are moving ahead at a faster rate. I know that my colleagues in the Department of Energy are more than sympathetic to the report. However, a memorandum from the Department shows that, in its estimation, combined heat and power will contribute only 2½ million tonnes of coal equivalent by the year 2000. That is extraordinary. That is to be compared with the potential 60 million to 70 million tonnes, and with the larger figure anticipated by the report.
If these issues are left to the Department of Energy, we shall remain at the bottom of the league. Millions of people will continue to suffer from lack of heat. Electricity and other forms of heating will price themselves out of the energy market. Heat will continue to be thrown out of cooling towers and into rivers. We should ask ourselves why we are bottom of the league, and why we have been so slow to develop combined heat and power. Some combined heat and power is used by industry because it realises that it is more economic to develop its own electricity and heat than to rely on that provided by nationalised industries.
About 8 per cent. of electricity and heat is produced by combined heat and power. In Germany, France and the Scandinavian countries about 20 per cent. to 40 per cent. of heat and electricity is produced in that way. Their progress has been more rapid. We are bottom of the league because there is a monopoly of electricity. The CEGB is not interested in selling heat. Why should it be? North Sea gas has also been a major restraint. It has been artificially underpriced. It is not sold at European market prices. It has therefore undermined the viability of the coal industry and the more efficient use of combined heat and power.
We lag behind also because politicians, those in charge of capital investment and those who give directives to nationalised industries have got their priorities wrong. 986 We hope that some rethinking is now taking place. A short-sighted attitude exists. It is all right to invest huge sums of money in providing new energy sources. We are now embarking on a masssive new nuclear power programme, and I support that programme in the long term. It is often held that it is respectable to allocate huge sums of money for investment to increase our energy sources, yet improper for huge—or even small—sums of money to be spent on energy conservation, even if it is more cost-effective than building new sources.
Governments, nationalised industries and our over-institutionalised system tend to regard investment in new power stations, coal mines or North Sea oil and gas as useful and essential. I do not quarrel with that. However, why do they not consider it equally useful and essential to invest in marketing heat? Any such investment is downgraded and is referred to as a subsidy. It therefore becomes unacceptable. I do not regard investment in combined heat and power as a subsidy. The Marshall report has proved my point.
No energy strategy could produce better results or be of more advantage to the economy over a short term than combined heat and power. However, the idea has not been put into practice because no one organisation is responsible for building up a system of heat distribution. We know that the gas industry has to produce pipelines in order to sell gas. The water industry has to build and lay pipes in order to sell water. The telephone system has to lay wires in order to sell telephones. The electricity industry has to lay a grid in order to sell electricity. But there is no co-ordinated organisation to produce a heat grid. As a result, heat is thrown away. It is not sent where it is needed, and where it could provide a cheap form of energy.
Combined heat and power is expanding rapidly in some countries, primarily because of co-operation between the electricity utilities, local authorities and Governments in providing a heat grid. In those countries it is accepted that investment in that form of conservation provides a new source of energy which is at present wasted and which is more cost-effective than investing in other new forms of energy. If combined heat and 987 power had been developed in Britain as part of our national energy strategy we should have had the co-operation of the utilities which are at present responsible for the energy industries. We should not then have had such a disproportionately unbalanced energy market. For example, the gas industry would not have taken such a large slice and the electricity industry would not have suffered as a result.
The arguments against combined heat and power come mainly from the vested interests, which refuse to look abroad to see what is happening there, and why. One of the arguments is that combined heat and power does not give the consumer a choice, that one would have to take hot water as a heating system or do without. That is nonsense. The consumer will always choose the energy which is the most economic for himself. That is why the consumer is switching to gas. If hot water is piped to a road, the consumer will take that hot water because it will be the cheapest form of heat. That will be the consumer's choice.
There are arguments about pollution, construction upheaval and the cost. Of course it is costly, as are most other forms of energy investment. The comparisons that are often made about the cost of harnessing heat from our power stations are totally misleading. The cost of piping the heat for district heating and industry should be compared with the costs of building new power stations to achieve the same energy benefit. Such a comparison is never made. A proper cost comparison would show that it would be more economical to convert some of the smaller city centre power stations which are being abandoned and scrapped as rapidly as the CEGB can manage. Those power stations are ideal for conversion. Examples can be found in York and on the Isle of Wight.
The other comparison that is never made is that which involves the cost of cooling towers, which would not be necessary under the system that I favour. What is the cost in ill health for that proportion of the population who suffer from lack of heat? What is the cost of the heating allowances which the State must pay to those who cannot afford adequate heating? What is the cost of damage to buildings from damp and other 988 problems that arise from inadequate heating? What is the cost of lost productivity from ill health and other problems caused by dismal standards of heating? Those costs are never taken into account.
I suggest that we should leave the energy debate unconcluded until a combined heat and power policy is considered to be a major option. We should convert older power stations and use the heat from the new power stations. The French are even planning to use the heat from their new nuclear power stations for district heating. Dr. Walter Marshall said that it would be grotesque to waste the heat from our nuclear power stations. It is not satisfactory for the CEGB to boast about being able to grow a few tomatoes with the hot water from Drax B power station. That is not good enough.
All over the world there are examples of combined heat and power being the most economical way to produce energy. It is almost always the most satisfying for the consumer. We should adopt the system here. We should take the lead from the EEC, which provides grants, and where progress is more rapid.
This is an urgent priority, because the scale of energy savings is so enormous and the investment could be so cost-effective. It could make an enormous contribution in the long term to saving oil burn. It could help to make us energy self-sufficient in Europe and provide relatively inexpensive heat for those who need it most and can afford it least.
Unless we convert our energy more efficiently we shall become less and less competitive as a nation, because the costs of production will increasingly be affected by the cost of energy. Above all, the vital argument is that of conservation. We do not know the solutions to our long-term energy stategy. We do not know whether the new energies will come, or at what price. We do not know whether the nuclear programme will succeed, be adequate or be safe. Until we know those answers, and until we can provide the alternative energies for when we have to phase out oil and gas, our only strategy must be conservation, because that will give us the time that we may need. For that reason, if for no other, it is time that the Government gave a serious lead. They should remove the disincentives and ensure that we move a little way up the league table.
§ Mr. David Penhaligon (Truro)
It is a pleasure to follow the speech of the hon. Member for Derbyshire, South-East (Mr. Rost). In the years that I have been a Member of the House, rarely have I listened to a speech with which I agreed so much. I hope that I shall not bore the Minister—if I do I shall not worry—but I intend to make a similar speech to emphasise the argument.
I congratulate the hon. Member for East Grinstead (Mr. Johnson Smith). He wants the Government to advocate a clear strategy which the British people can understand. Not many of us would vote against that, although we may argue about what the strategy should be. The hon. Member's argument boiled down to proposing a nuclear strategy. He paid lip-service to the alternatives.
I am not surprised that the nuclear solution appeals to the House, because it is the "grand solution." Politicians are always searching for the "grand solution", whether when controlling the money supply, amalgamating British Leyland or reorganising the steel industry. The "grand solution" for energy is the nuclear solution.
Several hon. Members have wondered why there is such opposition outside the House to nuclear power. It is interesting to reflect upon how many hon. Members are in the Chamber. In my experience, nuclear power is one of the few subjects which can attract substantial audiences in the hall and village. A discussion on nuclear power can attract 200 or more people. Few other subjects can achieve that. That was so in my constituency before the recent announcement. I suspect that we shall have some good meetings in the next few months. The announcement has served to concentrate the mind marvellously.
The House should not underestimate the fear. It is difficult to quantify the danger, but nuclear power stations have a jackpot potential. The Three Mile Island incident did not as far as we know cause deaths, but it was a near thing. I am an engineer and my training and background are technical. I once ran a research and development department and I learnt what I called Murphy's law: if anything can go wrong, it will—twice. That was one of the experiences of working with engineering products in an area 990 in which something new was being achieved.
I congratulate the engineers in America on preventing any deaths in the Three Mile Island incident. But we must take the obvious warning—that this was a desparately close call, and if we do not accept that, we are not being realistic.
My area is being considered, among others, for a nuclear power station. One cannot help but reflect on local opinion on this matter. People ask me why a station this size is being proposed in such an isolated area. That goes for all five sites in Cornwall and Dorset, which are all isolated. There may be a village near by, but there are no substantial pockets of population anywhere near them. I suspect that that is because those who have responsibility for drawing up the rules and regulations for safety standards know full well that there is a jackpot accident potential. Therefore, the feeling is that if these stations are located in Cornwall or Caithness, and an accident happens, it will not cause so much damage. That may be so. That may give great consolation to Ministers or to people who live in London, but it does not make the people who live in Cornwall feel one iota safer.
I must demonstrate to the House the peculiar recommendation that has been proposed for my area. It has been suggested that a 1,350 megawatt reactor should be built in Cornwall. That figure means little to most people, but it is probably more than three times the peak power consumption ever known in Cornwall on any night. Cornwall has never consumed more than 400 megawatts in one night, yet now we are talking about 1,350 megawatts. Therefore, it is rather ludicrous for hon. Members to suggest that the only reason for a station being built in Cornwall is the need for more local power generation. I accept that there is a need for more local power generation. I accept that there is a need for more power generation in the South-West, but not of the order of 1,350 megawatts. That is a ludicrous argument.
The House knows my view about nuclear power. Fears are constantly expressed to me by my constituents, and those fears will never subside until the Government have the courage to tell us 991 that these stations are so safe that one is to be built in Battersea, or, even more appropriately, in Finchley. The day that the Government are prepared to build a power station slap bang in the middle of one of the big built-up urban areas, I and others who represent rural areas will feel a great deal happier than we do now. However, I suspect that we are a long way from that position.
What are the alternatives? The most obvious is conservation, and this argument was brilliantly put by the hon. Member for Derbyshire, South-East. Clearly, by using the tax system, we can encourage people to use smaller cars. We should introduce a vehicle excise duty system which is inversely proportional to the car's fuel consumption performance. That would encourage people to buy smaller cars. Once a person has a powerful car, the way he drives it usually reflects his style of life, but if the car has not much power to begin with, clearly petrol will not be burnt up at such a rate.
Mr. Frank Hooky (Sheffield, Heeley)
Is the hon. Member aware that we have a rather daft system in the Civil Service whereby civil servants and local government officers are paid a bigger mileage allowance for a bigger car? What incentive is that to anyone to save energy?
§ Mr. Penhaligon
The hon. Member is absolutely right. Also, for reasons which I have never understood, Members of Parliament get the highest allowance of all, regardless of the size of the car. [An HON. MEMBER: "That is not true".] I am disappointed that someone gets even more than we do. I believe that we should question the sanity of all this.
It has been argued today that looking for massive energy savings by way of better insulation is not appropriate in a free society. It has been suggested that to force somebody to insulate his house is not part of the free society for which we all campaign. I fail to comprehend that argument. If the consequence of givng a man that freedom means that he must have an enormous nuclear power station in his back garden in order to maintain his freedom, it is ridiculous. The Government could take far more powers than they have in this area. In fact they could do far more than they 992 are doing without taking any powers of compulsion. All that they need are powers of encouragement.
Another way of ensuring some measure of conservation is to slow down our "throw-away" society. It has been said that we must save oil in order to manufacture plastics and other goods. Yet when I buy my son a present he has to remove three or four layers of plastic packaging material, which are all quickly thrown in the bin, before he can play with his toy. Is that the sort of production for which we are saving oil? Obviously there could be changes in the way we live which would reduce enormously the amount of fuel we use without substantially reducing our living standards.
I return to the point made by the hon. Member for Derbyshire, South-East. He referred to the thermal efficiency of our present system as being about one-third. That is true, and it is likely to remain so. Until the engineers and scientists discover a whole new generation of materials which can maintain their shape and size under pressures and stresses of which we have not previously dreamt, there is no way in which that efficiency can he increased. That is a basic engineering fact. We might take the average from 35 per cent. up to 38 or even 39 per cent., but no one can hope that the engineers can break through and achieve electricity generation of 65 or 70 per cent. unless they can produce a material with something like 20 times the maximum stress, strain and heat resistance of present-day materials. There is no obvious solution to that problem.
Therefore, we are stuck with a situation in which at least 6 tonnes of every 10 tonnes of coal mined will be thrown away or used to heat the rivers and the sky and keep the birds and the fish warm. We are spending more energy on keeping the fish and the birds healthy than on keeping ourselves healthy. Some people who write to me regularly would be in favour of that, but as birds and fish do not have the vote, there will not be many hon. Members who would take that line. If we could save half the energy that we are now throwing away we would have a heat saving equivalent of the total generating capacity of the CEGB. We would be talking about doubling the useful output of the CEGB.
993 I am worried that as a result of pressure from hon. Members the Government will come forward with a token scheme in which a few blocks of houses, or perhaps even one town, will be used for an experiment. Money will be invested so that the waste heat from power stations can be used to heat the houses, but only in a token scheme. I want to see a scheme which costs at least as much as one of these nuclear power stations which the Government are so keen to impose upon us. If they want to save money on one nuclear power station, they can save it on one which they propose to build in my constituency.
On the basic question of nuclear power, will the Minister bring us up to date on the problem of waste disposal? We should not build any more power stations until we have satisfactorily demonstrated that we have solved the waste disposal problems of nuclear energy. I have held that view for a considerable time and I am interested to know just how far we have come on this matter.
As a result of this motion, which I know will be passed overwhelmingly, will it be possible to include some information about the plutonium economy and its risks, and about fast breeder reactors and how we hope to build up ever-increasing stocks of plutonium and succeed in denying them to terrorists and the Third world, while maintaining their security for ever and a day? That is obviously what is implied when it is claimed that plutonium can be kept safe from people.
As most hon. Members taking part in this debate will know—I worry about those hon. Members who are not here—plutonium is a raw material for making atomic weapons. One of the strongest arguments against a tremendous world expansion of nuclear energy is the problem of plutonium. When the Government issue their discussion document so that the British people may join in this great debate, I hope that there will be a substantial and early chapter on the problems of plutonium and how we will deal with them.
§ Mr. Jocelyn Cadbury (Birmingham, Northfield)
First of all I wish to examine the difficulties about making predictions about energy supply and demand. 994 Secondly, I wish to evaluate some of the arguments put forward by the so-called low energy school, and, thirdly, I wish to say why I believe that Britain has no option but to proceed with the nuclear programme recently initiated by the Government. I reiterate the importance of removing some of the popular misconceptions about nuclear power that were illustrated so effectively by my hon. Friend the Member for East Grinstead (Mr. Johnson Smith), who initiated the debate.
It is difficult to make estimates about the demand for and supply of energy. Predictions about demand for energy are based on assumptions about two factors. The first is the rate of growth of our economy and the second concerns the amount of energy that we require to achieve a given level of economic activity—in other words, the efficiency with which we use our energy. One can see at once that those are both dangerous factors on which to make assumptions. Is there an hon. Member who is brave enough to predict our rate of growth between now and the end of the century? I doubt it. Can anyone tell how successful we shall be as a nation in learning to use energy more efficiently?
There is a third area of uncertainty, and that is the world demand for energy. The prospect of India and China achieving economic take-off has daunting implications for world energy demand. There are those who argue that such underdeveloped countries will not be able to afford to buy increasingly expensive energy and will therefore be condemned to perpetual poverty while wealthy nations continue to enjoy high energy prosperity. I find this view extremely arrogant and unrealistic. It is not a view that is conducive to world peace.
There are also uncertainties about predicting the level of energy supply, including the geological uncertainty. Predictions about how much oil there is in the North Sea have fluctuated wildly. During 1979 the estimate was revised downwards from 4 billion tonnes to 3 billion tonnes. Similarly, we are affected by the worldwide oil shortage. It is difficult to be certain whether or not all the major oil-bearing areas have been found. There may be new reserves off Greenland or in Siberia, or there may not.
995 There is also the geo-politicial uncertainty about energy supplies. There is no reason to suppose that the current instability in the Middle East is likely to improve, and a coup in Saudia Arabia would make things much worse for the West. If we look at supplies of uranium we see that uranium sources are widely spread around the world. Countries such as Canada and Australia, from which we get our supplies, are reliable politically, but one of our sources of uranium is Namibia, and that country lies in the politically dangerous area of Southern Africa.
Is an energy policy possible in the face of all these uncertainties? I believe that we can and must make some cautious estimates. I would say that North Sea oil is likely to run down in the 1990s and to dry up by the end of the century, though gas will probably last a little longer into the next century If we examine world oil supplies we see that we can no longer rely on OPEC countries to fill our indigenous energy gap. It is probably the case that the West can never again expect to be able to import more oil from OPEC than it did in 1978, namely, 35 million barrels. In the long run, world oil supplies will begin to run down and some time early in the next century they will run out.
We have an ambitious plan for coal in this country. However, it is important to bear two points in mind. First, there will be strong environmental pressures against starting new pits. That will slow down expansion. Secondly, it may well become more difficult for us to persuade people to go down the mines. However, if we can raise production from 110 million tonnes to 155 million tonnes a year, as planned, we shall do well.
I have therefore come to the inevitable conclusion that after a decade of self-sufficiency during the 1980s an energy gap will emerge in the United Kingdom in the 1990s and we shall become a net importer of energy once again and we shall become an importer of energy in a world that is short of energy.
What are the alternatives? There are two main schools of thought. One follows the policy chosen by the Government, called the hard energy policy. In its simplest form this entails the use of coal 996 and nuclear power as our main sources of energy during the 1980s and 1990s, and conservation. On the other hand, there is the soft, or low, energy policy, which has been suggested by such bodies as Friends of the Earth, Dr. Gerald Leach and my hon. Friend the Member for Carshalton (Mr. Forman).
I cannot accept the validity of the low energy strategy, though I believe that its protagonists have made some important points and have drawn attention to certain fundamental weaknesses in conventional thinking. But there are also many weaknesses in the low energy strategy. First, that strategy assumes what to me is an unacceptable decline in the manufacturing base of the United Kingdom. Secondly, it asserts that nuclear power is both dangerous and expensive. It also asserts that the nuclear industry is somehow robbing the alternative benign sources of energy of their fair share of investment.
That is untrue, because the benign sources of energy are still at the research and development state and the money required to fund investment in research is very much less than with nuclear power, which has reached the stage of maturity. Thirdly, I believe that the low energy strategy is over-optimistic about the speed with which we can become a nation of energy conservationists. We cannot change behaviour patterns in a few years. It will take time.
The low energy strategy assumes the availability of much unproven technology and I believe that it does not face up to the fact that many of these alternative energy sources are only at the R and D stage and that there are enormous technical problems to be overcome.
Let us look at solar energy, the best proven of the benign sources of energy. As long ago as 1897, 30 per cent. of the houses in Pasadena, Los Angeles, had solar heating. However, a major disadvantage for the United Kingdom is that the sun does not shine very often in winter, which is when we most need the energy. In fact, after making many assumptions, the International Solar Energy Society has produced an estimate that solar energy might provide 12 per cent. of the United Kingdom's primary energy consumption by 2020. That would be a useful contribution, but it is a long way off and it may be optimistic.
997 As for tidal energy, the most promising project is the Severn barrage, but again there are formidable problems to be overcome in constructing this enormous structure—and one cannot build a small-scale prototype first. My hon. Friend the Member for Carshalton has written in one of his excellent publications, which I have here—"Towards a more Conservative Energy Policy"—that such a scheme could generate 5,000 megawatts, the equivalent of five large power stations. I cannot help thinking that that is a little optimistic, but no doubt my hon. Friend will want to elaborate.
We must continue to give all these projects the funds they need, just as we must press ahead with the CHP schemes, but the Government are right not to rely on alternative energy sources making more than a modest contribution by the end of the century. Thus, we have no option but to proceed with the nuclear programme to meet the energy gap in the 1990s.
I want to reply to those who claim that nuclear power is unacceptably dangerous. Other hon. Members have referred to the safety record of the British nuclear industry. We have been generating electricity from nuclear power stations for over 20 years.
The first generation of reactors, the Magnox reactors, have proved reliable and safe. There has been only one fatal accident since the programme began. In coal mining there are about 60 deaths and 500 serious accidents a year in this country. There are more than 30,000 cases of pneumoconiosis in the mining community. That is a terrible price to pay for one source of energy.
But there remains the theoretical possibility of what could go wrong with nuclear energy—the "what if?" questions. The nuclear industry and the Government have not yet succeeded in convincing the public that many of the claims of the anti-nuclear lobby are highly misleading and amount to scare-mongering. The biggest myth, perhaps, is that a nuclear reactor would go off like an atomic bomb. Lord Rothschild said:An explosion is no more feasible in a reactor than it is from chewing pickled cucumber.Such an explosion cannot happen in a nuclear reactor because there is no means 998 of bringing the sub-critical masses together, which is what must be done in an atomic bomb.
The second area in which public anxiety has been aroused is the long-term effect of low doses of radiation. This is a difficult subject, because medical experts disagree on the interpretation of the available evidence, but there are some important points. There is no evidence that the incidence of cancer among those who work in our nuclear plants is higher than the national average. Also, the increase in exposure resulting from working with nuclear power is less than the difference between the natural levels of radiation occurring in London and Aberdeen—which arises simply because Aberdeen is built on granite.
Third, there is a scenario that a terrorist organisation would steal plutonium from a reactor and use it to construct an atomic bomb. But to build an effective bomb, the terrorists would need a team of nuclear physicists and a highly sophisticated large-scale chemical plant to separate the isotope, plutonium 239, from the reactor plutonium waste. It is impossible to conceive of such an operation being mounted, not only without a Government being aware of it but without that Government's actual support.
Therefore, the real danger is not that a terrorist organisation could build a bomb under its own steam but that a foreign Government might build a bomb for a terrorist organisation for with which it sympathised. That is a genuine danger, but the British nuclear programme will not make the situation worse.
There is a misconception about the title "fast-breeder reactor". There is a widespread belief—not one, I am sure, that is shared by many hon. Members—that a fast breeder is some sort of monstrous mechanical Errol Flynn which breeds quantities of noxious plutonium. In fact, one of its great advantages is that it consumes plutonium and that it will put to constructive use the plutonium which has been accumulating from existing Magnox stations. Therefore, the fast breeder is not a cause of the plutonium economy but will eventually provide a solution to it.
An energy gap will emerge in this country in the 1990s. The Government are right to pursue a three-pronged strategy involving coal, conservation and nuclear 999 power. At the same time, we must ensure that research into alternative energy sources is adequately funded and must press ahead with combined heat and power. Finally, the Government, the nuclear industry and all of us have a duty to see that the public receive a balanced view of nuclear power. The wilder misconceptions must be removed and the genuine risks faced.
§ Mr. Ioan Evans (Aberdare)
I think that the House is indebted to the hon. Member for East Grinstead (Mr. Johnson Smith) for initiating this short debate. Perhaps before long we can have a major debate, in Government time, on what we all regard as one of the most serious problems for this country and the world.
This has become almost a conservation debate, which is not a bad thing. We must recognise the terrible waste of energy that has taken place in the past. Along with a national energy policy, we should have a national conservation policy.
Of course, not all conservation is good. At the moment, energy is being conserved during the steel srike. The Department of Energy is prepared to intervene in the national interest, and I wish that the Secretary of State for Industry would not adopt his King Canute stance of not getting involved to end the steel dispute, which is having an effect on the energy and other industries. It has been estimated that British Rail is losing about £2½ million a week, and the dispute is in its third month. One wonders what the cost to the nation will ultimately be.
Talking of the ballot of the South Wales miners over the weekend, the Sunday Express used words like "South Wales miners support Margaret Thatcher". That raised a laugh in the South Wales pubs and clubs over the weekend. The ballot result should not be wrongly interpreted. The miners may have decided against industrial action at the moment, but they are concernd about the Government's policy of cutting steel capacity in a way that will harm our industrial future.
This policy is having repercussions on the coal industry. Twelve pits are on a short list to be closed. Coking pits could be closed in Wales as a result of the cuts at Llanwern and Port Talbot. Yet we are now discussing energy needs for the 1000 future. What a criminal act it would be if the Government's steel policy led to the closing of these pits!
Energy is the source of all industrial power, yet the Western world is heading towards a deeper and deeper crisis. I agree with those hon. Members who say that much more can be done by conservation. However, do not let us be kidded by the Milton Friedman theory that there will be no world energy crisis if market forces are allowed to operate. That is bunkum. The world's energy resources are finite, and market forces will not solve the energy crisis.
There is an increasing demand throughout the industrial world for scarce resources. We in Britain are fortunate. Along with Norway, we are perhaps unique in Europe in having energy resources which we can exploit for the benefit of all the people. It is essential that Britain has a planned and balanced policy to provide adequate supplies of energy at the lowest possible resource cost. That means co-ordination of the exploitation and use of all fuel supplies. That is why we need a national strategy by the Department, so that as a nation we do not find ourselves doing one thing in one industry which is contrary to our overall interests.
The hon. Member for East Grinstead was right to refer to nuclear energy, but we must recognise that our surest source of energy supply is the coal industry. Even at the present rate of consumption, there are known deposits for more than 300 years. There are probably other sources that have not yet been located. The British coal industry offers fuel supplies at no cost to the balance of payments and with considerable potential for export production. I believe that the present levels of coal output should be expanded, with new pits being sunk wherever possible.
It is true that there are problems associated with the coal industry, but, to a large extent, due to the work of the NCB, the problems of illness have been minimised. Since the Industrial Revolution, certain areas of Britain have played their part in providing coal to meet the needs of our people. I hope that there will be no opposition on environmental grounds to the coal industry being developed in other areas of Britain. The green and pleasant valleys of South Wales were 1001 raped by the Industrial Revolution. What the Government must now do through the NCB is to ensure that wherever possible those valleys again become green and that where there is dereliction the land is cleared in order to attract manufacturing industry which can provide jobs for the valley communities.
There was consistently high coal output during the autumn and winter, which enabled power stations in England and Wales to burn record tonnages of coal. The CEGB's power stations, which are the coal industry's largest customers, had a record coal burn in successive weeks in January, including 2 million tonnes in a week for the first time. About 75 per cent. of the electricity generated in Britain is now generated from coal. Some people talk about coal as if it can be used only as a household fuel, but we must recognise that to a large extent Britain's electricity is merely coal by wire.
Coal deliveries to power stations are also at their highest ever, and are 6 million tonnes up on the same period last year. For many weeks Britain's collieries have beaten target tonnages, and output so far in 1979–80 is 84 million tonnes—1.75 million tonnes more than at this time last year. Sales to industrial and domestic consumers are strong. While the steel dispute continues, great efforts are being made to ensure that coking coal can also be purchased.
We should try to bring an end to the steel dispute. In addition, we must try to avoid creating problems such as the one which recently occurred in South Wales, when, despite the fact that there were mountains of coking coal, we imported coking coal from America and Australia. I believe that there has now been an agreement between the BSC and the NCB to prevent that happening, but that is only a temporary solution. Is it any wonder that Britain has financial problems when at a time when we are producing the best quality coking coal we are importing such coal from elsewhere?
The debate relates to nuclear energy, but when people in Britain think of energy they think of North Sea oil. The pace of the exploitation of North Sea oil must be carefully considered and deter- 1002 mined in the light of Britain's long-term interests. We should not squander that resource. With the energy resources that are available—this brings me back to conservation—we have an obligation and a responsibility to future generations. Scientists warn us that many energy sources are limited and that they will run out. North Sea oil will run out within the next two decades. It will no longer he there in 30 years' time. If that is to happen, it is important to use our energy sources wisely and to ensure that they are available to he utilised by future generations.
Oil revenues should be invested in British industry for the benefit of the people. The revenue from North Sea oil should not result in a strong pound and difficulties for manufacturing industry. Instead, the benefit that is derived from North Sea oil should be ploughed into British industry in order to improve its future prospects.
Natural gas is another resource that has been discovered offshore. It is limited in quantity and should be exploited with care and forethought. I do not argue about the need for an adjustment in gas prices, but I am not sure whether the Government have handled it in the best way. Almost in one announcement they said that gas prices would soar 10 per cent. above the inflation rate. The inflation rate is currently about 20 per cent., and a 30 per cent. increase in gas prices is too steep in one go. It would have been much better had that increase been phased as part of a national energy strategy.
When the bombs dropped on Hiroshima and Nagasaki at the end of the war, many of us thought of the horror of nuclear weapons. That is why many of us argue that we should try to prevent the proliferation of those weapons, in order to avoid a world holocaust. But there were those who said that this was a new development and that we could have atoms for peace. They felt that it could be the solution to many of our problems. However, 35 years later, that still seems to be a distant dream. The nuclear energy industry has not replaced the other energy industries, although it has a part to play. I do not believe that a string of nuclear power stations will solve our energy problems in the remaining part of this century.
1003 There are environmental dangers associated with radioactivity. Those of us who know of the horror of Hiroshima and Nagasaki also know that there are real dangers associated with the genetic make-up of human beings. Those dangers should neither be under-estimated nor exaggerated, but we must recognise that such dangers exist.
The problem of the disposal of radioactive waste from uranium must receive our constant attention. It is no use boring holes in the mountains of Wales when the water that flows into the rivers is piped to Birmingham, Liverpool and the Severn Valley. We must be aware of the potential dangers. We must make sure that we do not do something that will lead to a massive parliamentary inquiry in 10, 20 or 30 years.
Hon. Members have been concerned about alternative sources of power. The Severn barrage scheme was referred to. Let us put revenue that we receive from North Sea oil to good use and implement such a scheme, which would provide energy for many years to come.
Our resources are owned by the people of this country. The Government want to hive off industries to the private sector, but surely it is in the interests of Britain that North Sea oil and gas remain in the hands of the people and that they are exploited for the benefit of the people. They should not be put into the hands of foreign capital which can exploit them in the interests of foreign industrialists.
Our debate has been interesting, and I hope that the House will return to the subject. Energy is important. I note that the Under-Secretary of State is present. He knows that in my constituency much of the coal is now being supplied to the Phurnacite plant producing smokeless fuel. About 18 per cent. of the smokeless fuel used in Britain is produced in my constituency, and more and more people will soon be using it because of the increase in the price of gas. The National Coal Board has asked the Government for aid for investment in the Anset process, which will produce a more efficient form of smokeless fuel. I hope that the Government will be forthcoming.
The Government must intervene and invest in our energy industry. We are going through a difficult industrial phase, but we have our energy industries, and I 1004 hope that we shall exploit them in the best possible way and that the people will benefit.
§ 6.2 pm
§ Mr. Nigel Forman (Carshalton)
I always enjoy listening to Labour Members tilting at Friedmanite windmills. This afternoon was no exception. When I listened to the hon. Members for Dunfermline (Mr. Douglas) and Aberdare (Mr. Evans) I had the feeling that if they could have snatched some controversy from the jaws of consensus they would have done so.
I shall be less party poiltical. I, too, pay tribute to my hon. Friend the Member for East Grinstead (Mr. Johnson Smith) for the able and interesting way in which he moved the motion. A number of hon. Members have been correct to suggest that the dilemma about our future needs is the enormous uncertainty of forecasting. But, as the Secretary of State has said on a number of occasions, we must have some working assumptions if we are to proceed. However easy it may be to criticise assumptions—for example, the assumptions in the Department's recent working document for 1979, which are unrealistic regarding the world price of oil and cumulative economic growth—I recognise that the Department must proceed on some basis.
We need a form of energy insurance policy for the future, and we must face the implications of that. If we are to have an insurance policy, we shall have to pay the premium. To some extent, we shall have to devote resources to energy over the years to come which would otherwise be devoted to other sectors of the economy.
The threats to our supplies in the future were set out by my hon. Friend the Member for East Grinstead. There are dramatic threats, such as industrial action at home and possible political crises abroad. There are also threats from some of the more perennial problems of the energy supply industries, particularly the long lead times, the high capital costs of equipment, and the problems of environmental and public acceptability. We need to pay close attention to all those threats to our future supplies. In different ways they are all important. It is sobering to realise that not many of them are susceptible to political manipulation.
1005 I turn now to strategies for the future. All hon. Members have their preferred strategies. My hon. Friend the Member for Derbyshire, South-East, (Mr. Rost) made an eloquent and powerful plea for combined heat and power. I hope that the Minister of State, in his reply, will be able to say something positive about the Government's intentions. Equally, I was interested in the powerful speech of my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) and I am grateful to him for quoting my booklet. It is somewhat out of date now, but it is worth a little re-reading from time to time. I commend the section dealing with the principles of energy policy to my hon. Friend the Minister of State for his bedtime reading, after he has replied to the debate.
The difficulty in considering strategies for the future is that we have to take account not only of where we should like to go but of some of the obstacles in our path. That leaves the House and the country with a number of unresolved issues, to which I should like the Minister to turn his attention, either tonight or perhaps in subsequent correspondence. It is important that the Government should come clean, and that they should be less coy about their intended depletion policy, and how they intend to achieve it. Equally, the Government should make their conservation policy clearer. I have said on previous occasions that a conservation policy can be based on price or exhortation but that it must be supplemented by a policy which is also based on regulations and incentives in different forms.
There is a query about the future role of electricity. To what extent do we want an electric future? One of the unspoken premises of the debate has been that electricity will be the fuel of the twenty-first century. I doubt that. I pray in aid the evidence of Lord Flowers, who on more than one occasion has said that he cannot foresee a sensible and rational use of electricity beyond about 21 per cent. of total energy needs. We are now at 13 or 14 per cent. That is a useful figure to bear in mind for comparison.
My hon. Friends the Members for East Grinstead and Northfield spoke in favour of nuclear power. I remind the House 1006 that nuclear power is useful only for three purposes. The first is to beat the living daylights out of people with nuclear weapons, the second is to put pacemakers into people's bodies, and the third is to generate electricity.
We should consider how great will be the role of electricity before we are too ambitious and too thoughtless about the expansion of nuclear power. We need to consider whether to opt for a more centralised or decentralised route in energy supplies, and whether we shall be able to continue to get all the deep-mined coal that we need. Some of the National Coal Board's plans are over-ambitious, and they will need to be revised downwards. One does not need to be an opponent of the Vale of Belvoir to take that view. One has only to look at the sociology of the mining community.
I commend to the House the very able and valuable speech of my hon. Friend the Member for East Grinstead. I hope that the Minister will be able, in reply, to say one or two positive things about energy conservation. It is quite clear from a letter that I received on 8 February from the Under-Secretary of State that energy conservation is the best possible investment in the short and medium term, and from the CONAES study—an acronym for some learned North American gathering—that in every way a pound invested in conservation, whether it is in combined heat and power or in any other form of conservation is infinitely better, on an opportunity cost basis, than a pound invested in any form of energy supply.
I hope that the Government will respond positively to what has been virtually unanimous agreement on these important issues.
§ Mr. Robert Maclennan (Caithness and Sutherland)
I have followed with interest the speech of the hon. Member for Carshalton (Mr. Forman) and also the speech of the hon. Member for Derbyshire, South-East (Mr. Rost) on the subject of combined heat and power.
I suppose that there is some risk, in a debate in which speeches have necessarily to be very brief, that in pursuing individual elements of the energy programme speakers may give the impression of having hobbyhorses that they are riding 1007 rather vigorously. I am sure that neither of the speakers who have addressed themselves particularly to that aspect would want to have their views unbalanced in that way.
I thought that there were two points worthy of note in the speech of the hon. Member for Derbyshire, South-East. While apparently eschewing national strategy in the hands of large national generating boards or other organisations, he appeared to be asking the Government to pursue a national strategy on combined heat and power. He also eschewed the subsidisation of energy through the price mechanism, but he seemed to embrace it in respect of combined heat and power, and commented with favour upon the European example, where such subsidy is available. I point to these things in no partisan or carping spirit, because I take the view that we should not be embarrassed about subsidy where it is necessary to promote a particularly efficient energy resource. I hope that the hon. Gentleman will not mind my drawing attention to what I thought was something of an internal contradiction in what he was saying.
I now turn to another hobbyhorse that was flogged with customary vigour by the Liberal spokesman in the debate, the hon. Member for Truro (Mr. Penhaligon). He addressed himself to nuclear power and produced what I thought was one of the more remarkable illogicalities of the debate—that because the needs of the Cornish people for power were not likely to require the construction of a nuclear power station in his constituency, the Government should eschew the construction of a nuclear power station in Cornwall. It seemed to me to be about as sensible as saying that because the people of Cornwall do not consume their entire catch of fish there should be no Cornish fishing industry, or that because the people of Cornwall did not use all the tin that was mined there in the past the tin mines should have been closed down even before they naturally expired.
The needs of the country for energy must transcend the local interests of the constituencies that we may happen to represent. If it is of any comfort to the hon. Member for Truro, I draw his attention to the experience in my own constituency, which he mentioned in the course of his remarks. It has lived with 1008 nuclear power for two and a half decades. The hon. Gentleman suggested that the power station was originally located there because it bore some points of comparison with his own constituency at the other extremity of these islands. The vast majority of my constituents have lived with the nuclear industry without fear and, indeed, regard it as some advantage to be working in the forefront of a technological development of such massive importance to the future prosperity of our country.
In the very short time available, it is not possible to do a tour d'horizon of all the resources of energy and of what the Government's attitude to them all ought to be. Therefore, I should like to extend the hand of gratitude across the Floor of the House to the hon. Member for Birmingham, Northfield (Mr. Cadbury), who attempted, in a short speech, to do just that. I disagreed with nothing that he said, and I adopt the arguments and balance of his speech. Building upon that general framework, perhaps I may be allowed to address myself to two particular areas of concern, in both of which the Minister will have more than a ministerial interest.
First, there is the question of the gas-gathering pipeline. It has been a matter almost of affront to the people living in the proximity of the North Sea to realise the extent to which gas was being flared, and the sky made red at night by this endeavour. It has been wasteful and deplorable, and we look for an initiative from the Government, when their report is available in the spring, that will ensure that the gas-gathering pipeline is constructed as soon as possible.
If the Minister is in a position to say anything about the prospect of a spur from that line being led into his own constituency in the Cromarty Firth, where it would be of great value and no doubt give a boost to the development of the petro-chemical industry—which has happily had the further fillip of the Dow Chemical Company's announced interest in developments there—he will greatly encourage the people who live in that area. I know that Ministers rarely like to speak about their constituencies, but this is an interest that we share, and I hope that he will feel it possible to say something about that today.
1009 I hope, secondly, that the Minister will be able to go further than Ministers have done publicly so far on the Government's attitude to the construction of a commercial fast-breeder reactor. The hon. Member for Truro asked that we might be given some indication of the Government's thinking on this matter, and particularly on the handling of plutonium. We are about to be made aware of the results of the international nuclear fuel cycle evaluation, which will perhaps put in our hands the most authoritative and objective study of some of the problems that not only this country but, indeed, the nuclear world has seen.
My sources of information, which are not as authoritative as those of the Government, suggest that, although considerable doubts are expressed about the American system, some encouraging support is given to what has been done in this country over the last 20 years, even if they have not been given a clean bill of health.
I should like to develop a point that was made earlier about the fast reactor. It is not properly understood throughout this country that it is not so much a plutonium-creating reactor as a plutonium-consuming reactor. That is one of its greatest attractions from the safety point of view, and it will help to deal with the problem of the vast quantities of stored plutonium from the earlier Magnox programme.
The Government have shown some interest but have given no high priority as yet to the development of this programme. The Prime Minister has visited the fast reactor at Dounreay, and I am glad to know that the Secretary of State is visiting it next week or in two weeks time. That is good news. I hope that the Government will be in a position to announce their agreement in principle to going ahead with the construction of the next phase of the programme. I recognise that that must be preceded by an inquiry and I hope that that inquiry will consider not only the wider question of the desirability of the system but its location.
I hope that the Minister does not think that I need to apologise for again drawing to his attention the evident advantages of locating the commercial fast 1010 breeder reactor on the north coast of Caithness where the present reactors have done so much to generate high levels of prosperity throughout the community. I have made this argument extensively myself, as have many people in the Highlands. I hope that the Minister will give it the benison of his commitment and that of the Government.
There is no part of the country of which I am aware that would welcome this development so wholeheartedly as Caithness. The people of that area have made the development possible and they should reap the benefits of future developments.
§ Mr. Joseph Ashton (Bassetlaw)
We are all indebted to the hon. Member for East Grinstead (Mr. Johnson Smith) for tabling this motion. It has been an excellent debate. I should like to speak mainly to that part of the motion that calls on the House to seek better understanding of the problem on the part of the public. We have heard a great deal of discussion this afternoon about the sources of energy and whether their availability is infinite. But we need more discussion about the education of the public on the need to conserve energy.
I am highly critical of this Government, and perhaps of my own Government when in office, for not having done much about educating the public regarding the seriousness of this problem. That cannot be done simply by putting advertisements in the newspapers or by advertising for one minute on the television, hoping that the public will take notice. They may be shocked by a huge electricity bill or a huge bill for their oil-fired central heating but they promptly forget about conservation until the following winter.
I visited California last summer and I hope that those Ministers present will be able to enjoy the same experience next year. I should say that I paid for the trip myself, before anyone accuses me of having received a perk. One of the things I noticed that was working well in California, and which is something we could adopt in this country, was that there were huge signs on the motorways giving the telephone number of a car pool from which drivers could receive information. Anyone who has driven around Los Angeles and seen 1011 the density of traffic there, though he might object to the American pricing policy for petrol would see that every local authority had erected on every motorway huge signs giving a telephone number that car users could ring. In that way they could discover that someone who lived in the next street worked perhaps 200 yards away and would therefore be able to share a car.
Considering the density of traffic from the suburbs in this country, it would surely not be a bad idea to encourage local authorities or the Department of Energy to erect signs with that sort of information on them so that commuters could telephone in and give information about their travel and the times they leave home to some centralised computer point which could then be fed back to other car users. That would be a tremendous saving in fuel every day, as well as helping to free some of our roads of traffic congestion.
§ Mr. Penhaligon
Is the hon. Member aware that the Government are doing precisely what he is suggesting at the moment and that his party are opposing the proposal in the Committee that is now discussing it?
§ Mr. Ashton
I am not a member of the Committee, so I do not know the reasons for that. However, I have discussed this with members of my party and we see no objection to that sort of thing being done. The hon. Member for Truro (Mr. Penhaligon) did not allow me to finish. I was about to say that any incentive for people to use public transport should be encouraged. I am sure that Labour Members on that Committee are not opposed to that. Some method of subsidy, or bus-only lanes to encourage public transport to move faster and therefore more cheaply should also be examined and costed. I am merely telling the House what happens in America.
Another good system I saw in America—this can be looked at, although we do not necessarily have to introduce it—was what happened on toll bridges. I visited the Oakland toll bridge. In the rush hour it costs one dollar to cross the bridge but if there are three people in the car the journey is free. People were not made to pay because there were not three people in the car, but if there were three people in the car it was free. That is an 1012 excellent scheme and it encourages people to give others a lift to work.
In some of the local government car parks in America the employees were not allowed to park unless they were carrying another passenger when they drove through the gate. It may be that people picked up a passenger 50 yards down the road, one knows not, but it is an idea that the Government and the Department of Energy, with all their resources, should be considering with local authorities to try to make the public aware of the need to conserve energy.
The hon. Member for Truro said that something could be done about car tax. In our manifesto we said that we would abolish the road fund licence and put the tax on to petrol. That would encourage people to buy a new Mini rather than a large secondhand Rover car. There was some dispute within the present Government about this. The Minister of Transport was against it and then he was in favour of it. It may be that something along these lines will be included in next month's Budget. We are talking not about a major new oilfield being discovered but about educating the public There is a need not only to educate the consumer.
One area at which we must look is the old coin-in-the-slot system. Some hon. Members may think that that would be a step backwards, but many consumers would prefer it. Some of the poorer consumers in my constituency who attend my surgery—I am sure the same happens with many other hon. Members—say that they cannot pay their bills. I ask them whether they would like me to have a coin-in-the-slot meter installed for them and they say "Yes" very enthusiastically. That applies not only to people on social security but to many others on fixed incomes who find it difficult to pay a quarterly bill. They would very much like to pay as they go.
What other commodity is there for which people do not pay as they go? The motorist pays for his petrol at the pump. Why should not the person using electricity pay for it at the meter? I know that the nationalised industries do not like the idea of having to collect the money, and having their collectors knocked on the head in some of the rougher areas of the community. It is 1013 also considered that there might be a temptation to break into the meter. But there are ways round such things. It could be the type of meter where a coin drops straight through, so that the house owner would still pay by bill. But at least the action of putting the coin into the meter several times a day would convince the consumer how much electricity or gas he was using. When the house was warmed by half-past 10 or 11 o'clock many parents who are hard up would not bother switching the electric fire on again. Of course, the industries do not consider metering a good idea because they say it costs 16 per cent. more to sell gas or electricity in that way. But many consumers are prepared to pay that extra amount so that they know just how much money they are spending.
All we have had from this Government is a system of rationing by price. They are taxing gas and pushing up its price because they believe that ultimately the consumer will learn sense and switch off. What often happens is that once an old lady has received a bill for £150 for electricity she switches everything off in her electricity-heated council flat and sits there and shivers. She does that because the fuel rebate system we have at present is pathetic. The Government are taxing North Sea gas and using virtually none of that profit to pay something out to the old people who have earned the right during their lifetime to keep warm in winter.
We had some sort of electricty discount scheme whereby the first £5 was discounted and the poorer consumer received a further 20 per cent. off the bill. We were criticised by the Conservatives because the average payment was about £7. That may have been so on that particular winter bill but if the bill was extermely large the amount of rebate could have been up to £25. That kind of rebate is a godsend to the elderly, poor families, families on rent rebate and family income supplement, who exist on fixed weekly incomes and who are knocked sideways when they receive a massive bill.
We must have a system of fuel cost rebates similar to the rebate systems for rent and rates. We must have a system by which this country, which is enormously wealthy in energy—although 1014 perhaps not wealthy in very much else—has the decency to say to elderly people "You will not go cold in winter."
We must attack the problem of conservation with much more ferocity than we have in the past. The hon. Member for East Grinstead talked about conservation. He made a very good speech. We have given grants, more or less, to owner-occupiers. If some of those owner-occupiers were old ladies who were not nimble enough to get a grant and scramble up a ladder to insulate a loft, it was regrettable that they could not take advantage of it. But there are about 5 million council tenants in Britain today. Many of them occupy pre-war houses which have no insulation, and many of them have no access to their lofts. They could not do much about getting grants.
However, it would take very little in the way of initiative and cash to start a conservation scheme in those 5 million council houses. It could be self-financing. It would not need massive Government expenditure. All that it needs is local councils having the guts and initiative to say "We have 1,000 pre-war council houses. We shall insulate them. We shall put in double glazing. We shall borrow the money over 60 years"—as they do for the housing account—"and we shall put the cost on the rent."
That would probably make about 50p a week difference to the rent. In return, the tenant would save that 50p in his heating costs. He would be very pleased to pay an extra 50p a week if it kept down his electricity bill and if he had a warmer and more pleasant house in which to live.
All that this needs is a push from the Department of Energy and consultation with local authorities about undertaking this work. As well as conserving heat, it would provide work.
§ Mr. Johnson Smith
That has already been done by the Government since they came into office. In the Housing Bill they are extending insulation grants.
§ Mr. Ashton
The hon. Gentleman says that that has been done, but neither of the local councils in my area knows much about it, nor do manufacturers of glass. My local council wanted to do this for old-age pensioners' flats. They had a hell of a job in getting permission from the 1015 Government to allocate the necessary expenditure to start the scheme. One of the things that is holding back many of the schemes which local councils want to implement is the question of loan sanction, which local councils have great difficulty in getting.
There is no serious push to start a self-financing scheme which would create a great number of jobs. Many councils have their own direct labour organisations. They have been stopped from building new council houses, by the announcement last week. There have been cutbacks in the building of new schools, roads and everything else. Some of that labour force could be diverted to energy-saving works on existing houses and buildings of local authorities. That would provide a great deal of work.
As regards the phraseunderstanding by the public of the nation's future energy needsthe hon. Member mentioned the need to educate the public on nuclear energy That is absolutely right. I was about to say that the educational matter published by the nuclear people is appalling, but it is non-existent in many instances. They seem to think that the best way to discuss nuclear energy is to keep quiet and say nothing. However, we are seeing a generation of young people growing up and they are absolutely fascinated by "Star Wars", "Close Encounters of the Third Kind", "Star Trek", and so on. Everything to do with the technology of the future fascinates them. Yet the first mention of a nuclear power station being built somewhere brings them immediately marching down the street with banners objecting to it, and they totally swing the other way. The Atomic Energy Authority seems to have done hardly anything to get hold of the opinion formers among young people and educate them on what nuclear energy means and how it will keep their children warm in the future, and to try to get across to the pressure groups just what needs doing.
I meant to mention earlier the subject of grants for conservation, because the hon. Member for East Grinstead made an important statement when he said that he thought that the Government would be cancelling the insulation grants in June. There seems to be a cutback on the demonstration programmes that 1016 have taken place. There has been much speculation in the press. Perhaps the Minister will comment on this matter.
As regards nuclear energy, we have seen, understandably, many scare tactics being used by the media. Let us face the fact that the media live by "shock, horror, probe, discontent" controversy. It is understandable that they will promote this in order to sell newspapers, and so on. But when newspapers contain pictures of trains standing in Stratford station, nearly in the centre of London, carrrying nuclear waste, and somebody buying a platform ticket and armed with a wooden replica of an anti-tank gun and pointing that gun at a container of nuclear waste, understandably it creates doubt and fear in the public's mind.
Some hon. Members attended a seminar which was held by the British Nuclear Forum a few weeks ago. I asked some experts there what would have happened had an anti-tank gun been fired at a nuclear waste container.
The experts said "Nothing. You could have fired the anti-tank gun at the container of nuclear waste and it would have done no damage whatsoever." I said "Why do you not go and do that? Why not take a container"—although certainly not one filled with nuclear waste—"on to Hackney marshes and fire such a weapon at it to show the public that it would not make any difference?"
In America such containers have been put on lorries which have been set going at 90 miles an hour in New Mexico, and have hit stone and concrete walls and barricades of sand, to prove that no damage is done to the containers. But our nuclear people seem to think that the best way is to keep quiet and to tell the public nothing, to let the public continue to be afraid of what might happen. That is not really an energy policy.
The Government themselves are very quiet on the question of the Nuclear Inspectorate. The stories in the New Statesman of the 20 inspectors of the nuclear inspectorate wanting to set up as private consultants and refusing to go to the health and safety at work establishment at Bootle are really disconcerting. That again is something on which the Department of Energy seems to have the attitude "The less said, the better", which enables people to feed on fears 1017 and to build up a barrage of misunderstanding about nuclear policy.
Generally, I think that the Government must admit that this afternoon there has not been a great deal of congratulation on what they are doing with regard to energy education. There has been very little congratulation at all. There has been muted hut, nevertheless, deep criticism from the Conservative Benches with regard to the combined heat and power scheme and to the conservation policies, and criticism from the Opposition Benches about what the Government may be doing to damage the British National Oil Corporation, or their intention to sell that off, and about the future selling of oil.
All of us would be glad to hear the Minister of State telling us whether we have an energy policy except one of rationing by price and taxation of energy supplies and hoping that the public will take notice of the problem in that way.
§ The Minister of State, Department of Energy (Mr. Hamish Gray)
I am grateful to my hon. Friend the Member for East Grinstead (Mr. Johnson Smith) for tabling the motion. I join with those who have already offered their congratulations to him. I particularly congratulate him on his very constructive speech. He provided us with a great many ideas, which we shall consider carefully.
It is useful for the House to have the opportunity to discuss these matters in the relative calm of private Members' time rather than in the highly charged atmosphere of inter-party controversy, for there is much in energy policy which transcends party politics. The sums of money involved are such that it is important to achieve as wide a measure of agreement as possible. I am thinking particularly of the coal and the nuclear industries.
I was interested when the hon. Member for Bassetlaw (Mr. Ashton) told us of the good private enterprise policies about which he had learnt in the United States. We might even have a convert to the free market.
§ Mr. Gray
In any event, I am glad that the hon. Member paid his visit. I am sure that he will be the better for it.
Energy has become a matter of first importance to the entire world. Indeed, it could be argued that the two events of the 1970s which had the greatest impact on the world economy were both to do with energy. The first was in 1973, when the price of oil rose fivefold within a matter of a few months, and the second was early last year, when the price of oil doubled following the events in Iran.
I thought that my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) was right to draw the attention of the House to the dangers that could face this country if there were to be another uprising in the Middle East similar to that experienced in Iran. We cannot divorce ourselves from what takes place in the rest of the world.
The obvious conclusion to be drawn for the events of 1973–74 and of those more recently in 1979 is that economic activity is highly dependent on there being adequate and secure energy supplies available at reasonable prices. There is now widespread agreement, however, in international circles that oil will become scarcer and more expensive during the rest of this century and beyond.
Nations will therefore have to reduce their oil dependence and make a general long-term transition towards the use of alternatives to oil—such as coal, nuclear power, energy conservation, and the nenewable sources. The hon. Member for Bristol, North-East (Mr. Palmer) made a realistic assessment of the situation and put a wealth of experience into his remarks.
Whilst there may be an awareness of the energy problem among world leaders and among the larger oil companies and in industry and commerce generally, the message has had only a limited impact on the general public. This phenomenon is not peculiar to the United Kingdom. It is fairly widespread throughout the Western world.
This I find worrying, because I believe that the ultimate success of any energy strategy depends on the involvement and commitment of each and every individual. We are very conscious of this problem. That is why our energy policies are designed to convey to the consumer the 1019 correct message about the nature of the longer term problems that we face. Realism in pricing energy is, of course, very much part of this strategy.
The need to conserve energy is an essential part of our policy, and the recent decision on financial targets for the gas industry must be viewed in this context. Our resources of North Sea gas are limited, and if domestic gas prices were held at artifically low levels for too long we should burn up this valuable resource very quickly. Proper pricing is therefore essential in any sensible energy policy, since pricing is without doubt the most effective instrument for influencing consumer behaviour.
§ Mr. Forman
Are my hon. Friend and his officials aware that in real terms the price of a gallon of petrol on the forecourt is now the same as it was in 1960? Do the Government intend to do anything about it?
§ Mr. Gray
I am grateful to my hon. Friend for his intervention, but I do not think that he would expect me to comment on that issue at this stage.
Pricing alone is not sufficient. There must also be information and advice on how best to use energy from both industry and Government. Incentives and certain mandatory measures also have a useful role to play where they are cost effective and appropriate.
The task of making the public aware of the energy problem is not one for Government alone. This is a job which must involve society as a whole. There is already much debate on energy matters in the Press and other media, and the growth of energy seminars and energy research projects in recent years has been quite astonishing.
The debates which are regularly held in another place serve an equally valuable function. More discussion and debate is something which I welcome, but I should like to ernphasise the need for well-informed and unbiased debate. Debate should be based on hard facts rather than on fiction.
Public discussion and public acceptability are part of our democratic tradition, and I regard it as my duty to safeguard this heritage, particularly so far as the energy debate is concerned. However, there is also a danger in becoming 1020 so obsessed by public debate that the future energy needs for the nation may go by default and energy projects never materialise. A sensible balance is therefore needed.
Let us look briefly at the United Kingdom's energy prospects. Our energy position for the medium term is favourable. Production of North Sea oil and gas, together with coal and the nuclear power programme, should make us self-sufficient in energy, in net terms, for much of the 1980s. But our North Sea oil and gas supplies could be declining by the 1990s, and by the year 2000 our net energy imports could be between 35 million and 120 million tonnes of coal equivalent. The effect that this would have on our balance of payments could be quite staggering.
With oil and natural gas production declining towards the end of the century, the United Kingdom therefore faces the same long-term energy prospects as other countries. Even while we are self-sufficient, we shall still not be insulated from the world's energy problems. We are a trading nation, and our welfare depends to a large extent on the welfare of the rest of the world; and, since lead times in the energy sector are very long, we have to start thinking about our future energy requirements now.
On the oil front, for example, there is approximately a 7- to 10-year lead time between an oil find and the time that the discovery comes on stream, as my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) pointed out. It is essential, therefore, to ensure a high level of exploration activity now in order to maintain the momentum of production in the 1990s and beyond. That is why we were somewhat concerned about the serious decline in exploration activity under the previous Labour Government. The hon. Member for Dunfermline (Mr. Douglas) made that point, and I had to agree with him. The hon. Gentleman was critical of the lack of exploration. But I should point out that at present all mobile and appraisal rigs are on charter. Between January and June 1979 only 21 new wells were started, whereas between July and December 1979 the number dramatically rose to 30.
I believe that the measures that we have introduced since taking office, including the various changes that we have 1021 made in the role of the British National Oil Corporation and a proposal for a seventh round of licensing, will, taken together with the higher level of oil prices, restore the confidence of the oil companies and create a climate conducive to increased exploration activity.
The hon. Member for Dunfermline also asked about depletion. Several other hon. Members also referred to that matter. It is a matter of amazement to me that, after five years in government, the Opposition only now seem to have appreciated the problem of depletion. They did very little about depletion while in office. Yet they expect us, after nine months in office, to produce a full depletion policy. I assure the Opposition that the Government are looking at the whole question of depletion very carefully.
§ Mr. Gray
I have only a limited time and I have many points to cover. The right hon. Gentleman has not been present throughout the debate.
Taken together, these matters are very important.
My hon. Friend the Member for Hallam and the hon. Member for Caithness and Sutherland (Mr. Maclennan) asked for information on the possible new gas-gathering scheme in the North Sea. The survey has been carried out by the BGC-Mobil consortium and the report is expected about the end of March. Until that report is received, it is not possible to give any indication where a link line is likely to go.
§ Mr. Douglas
It is interesting that the only place that appears to get no information on this matter is the House of Commons. We read in the Scottish and national press daily and weekly of statements on the future of this gas-gathering system. Why cannot the Minister give us a fair indication of the Government's intentions?
§ Mr. Gray
My hon. Friend the Member for Carshalton (Mr. Forman), who produced a pamphlet on a more Conservative energy policy while the Conservative Party was in opposition, which I am sure has been studied with interest by all hon. Members, made a useful contribution and provided some interesting suggestions on conservation. We are aiming to foster a new attitude to the use of energy in all sectors of the economy, and to encourage the adoption of cost-effective measures to reduce energy demand.
The difficulty of energy conservation is that results depend on the decision of millions of individual consumers. As my hon. Friend the Member for East Grinstead observed, it is difficult to persuade the public to grasp the necessity for conservation. Realistic energy pricing must be the central element of energy conservation, so that consumers are given the right signals about the scarce and valuable nature of energy.
My hon. Friend the Member for Derbyshire, South-East (Mr. Rost) spoke of combined heat and power. I agree that we must encourage combined heat and power schemes where these will be economic. We are considering the Marshall report on combined heat and power. In due course we hope to announce our decision on the findings. The Marshall report took five years to prepare. The report was presented to the Government in May 1979. It was published by the Government in July 1979. I suggest that we may be forgiven if we delay our conclusions for a short while.
My hon. Friend the Member for East Grinstead questioned the target that we have in mind for conservation. Our target is a 20 per cent. saving by the year 2000. Since 1973 there has been a saving of 6 per cent. Most of that saving came in the early years immediately after the early increase in oil prices in 1973. That trend came to an end, and it was only after 1979 that we managed to improve our performance once more.
The United Kingdom is fortunate in having massive reserves of coal. Operating reserves are about 6 billion tonnes, enough to sustain current rates of production for about 50 years. Total resources 1023 may be as high as 190 billion tonnes, of which the National Coal Board estimates that about 45 billion tonnes may ultimately become recoverable.
The hon. Member for Aberdare (Mr. Evans) spoke of the varying uses for coal. The hon. Gentleman is right. As time goes on we shall have to develop other uses for coal and the traditional uses will gradually die out. Future policy is not an issue of nuclear power versus coal, coal versus oil or oil versus gas. We shall need all our energy resources if we are to maintain standards and provide the power for our industry that we shall require in the years ahead. Before the end of the century, there could also be a requirement for manufacturing substitute natural gas from coal. Beyond the end of the century, markets for coal for manufacturing synthetic oil and chemicals are also likely to develop.
It is important, therefore, that all concerned with the coal industry work together to create a modern, efficient, low-cost, highly productive industry capable of meeting expanding demand in the future. The Government are committed to the high level of investment needed to ensure this.
On nuclear power, as hon. Members know, my right hon. Friend announced a programme on 18 December of about one new nuclear power station order a year from 1983, or about 15 gigawatts over 10 years. It is an important aspect of this programme, and indeed of the Government's energy policy generally, that we are not committing ourselves to a precise level of future ordering, or at this stage to one particular reactor type. The future will always turn out to be different from that which we expect, and we therefore need to develop a flexible approach which allows us to adjust to changing circumstances as we go along.
So, while we consider 15 gigawatts to be a reasonable basis on which the industry can plan, it is right that decisions about individual nuclear power orders should be taken as and when necessary using the best information available at that time about future electricity demand, economic efficiency, safety and so on.
The 15 gigawatts programme is a modest one which needs to be seen in the context of our balanced and diversified approach to energy policy based, in particular, on the development of coal, nuc- 1024 lear power and energy conservation. If ordering is no higher than 15 gigawatts, only about a third of our electricity in the year 2000 will be generated by nuclear power.
My hon. Friend the Member for East Grinstead suggested that we should not be wholly dependent on nuclear power. I agree with him entirely. That is why we are trying to develop as many energy sources as possible.
The hon. Member for Truro (Mr. Penhaligon) is worried about the future of nuclear power stations. I hope that the hon. Gentleman was reassured by the excellent speeches of my hon. Friend the Member for Northfield and the hon. Member for Caithness and Sunderland. The hon. Member for Caithness and Sunderland has the privilege of having Dounreay in his constituency. Like me—I have a constituency close to Dounreay—he will recall the fears that were expressed 20 years ago when the site in his constituency was selected for the Dounreay project. The people in that area are now requesting that the first demonstration commercial fast breeder reactor be sited in the area.
Public confidence will, of course, be vital for the successful development of nuclear power. That confidence can be established only if there is adequate opportunity for public discussion of the issues involved. Government, the nuclear industry, and environmntal pressure groups have an obligation to provide as much information to the public as possible so as to ensure that this public discussion is well informed.
The safety of nuclear power is, and always will be, the Government's first principle—a principle that cannot be compromised. The safety record of our nuclear power programme so far is excellent. Every effort will be made to ensure that high standards are maintained and, where appropriate, improved. It will be essential that people not only understand the risks involved but are satisfied that everything is being done to ensure their safety as far as possible. To this end, it is the policy of the Government and all concerned with the nuclear industry to make readily available as much information on nuclear safety as is reasonably possible.
The hon. Member for Bristol, North-East suggested that we must safeguard 1025 our capacity to generate power for the industry in future. I agree with him entirely. The hon. Member for Truro spoke about providing information. I confirm that the nuclear industry and the Government will try to provide as much information as is possible.
§ Mr. Gray
The problems of the disposal of nuclear waste must be seen in relation to the quantities involved. The volume of nuclear waste is small. The total amount of nuclear waste gathered so far is not sufficient to fill the average four-bedroomed house, namely about 800 cubic metres.
There are a great many points with which I should like to deal but time does not permit me to do so.
§ Question put and agreed to.
That this House seeks a better understanding by the public of the nation's future energy needs, of the various threats to the nation's ability to meet them adequately, and of the strategies that are open.