HC Deb 10 April 1989 vol 150 cc556-7
3. Mr. Cran

To ask the Secretary of State for Energy what studies have been undertaken by his Department as to the effect of privatisation of the electricity industry on the production of electricity from all other energy sources.

Mr. Michael Spicer

We have framed our privatisation proposals to encourage competitive generation from all sources.

Mr. Cran

Does not recent experience show that the use of fossil fuels in the production of electricity is susceptible not only to interruptions of supply but to variations of price? That being so, should not the non-fossil fuel obligations be used to the maximum after the Electricity Bill is enacted, and reviewed constantly thereafter?

Mr. Spicer

I agree that there have been disruptions in the supply of coal as a result of strikes and variations in the price of oil. That is why we have ensured, through the. non-fossil fuel obligation, that a variety of sources of energy will be available, with resulting security for the consumer. We have particularly ensured that renewable sources of energy will be given a special place within the non-fossil fuel obligation.

Mr. Campbell-Savours

Is privatisation a consideration in the mind of the Central Electricity Generating Board in pursuing its planning application for dry storage at Heysham? Does it think that that is cheaper than reprocessing? Will the Minister personally intervene? We want the material in west Cumberland, where it can be reprocessed by British Nuclear Fuels plc. Is the Minister aware that the people of the Heysham area object and that we in west Cumberland want the material?

Mr. Spicer

I am not inside the CEGB's mind. As the hon. Gentleman said, it is applying for dry storage at Heysham. He is right to say— perhaps we shall be discussing this in greater detail later in the week— that there are advantages attached to the processing which is proposed at the thermal oxide reprocessing plant in terms of the recovery of uranium and the development of plutonium. However, there must be an application and an inquiry before we can go ahead on that basis.

Mr. Jack

Does my hon. Friend agree that British Nuclear Fuels plc is working hard to take full advantage of the opportunities for nuclear power generation under the terms of the Electricity Bill? Will he join me in congratulating both the management and the unions on the agreement recently struck, which will further the exploitation of BNF's new investment programme at the Springfield works in my constituency?

Mr. Spicer

I am happy to join my hon. Friend in those congratulations. I hope that British Nuclear Fuels plc will continue to be successful.

Mr. Morgan

Does the Minister agree that the supplementary question by the hon. Member for Beverley (Mr. Jack), and his answer to it, constitute the most astonishing question and response that one can imagine from a supposedly market-oriented Government? Is the Minister able to confirm that the advice that he is receiving from the merchant banks that are advising him on privatisation is that the private investment community does not want to know about nuclear power and will not pay genuine money for it? Whereas it might be possible to sell the family silver, the Government cannot even give away the family plutonium.

Mr. Spicer

No, Sir. I do not accept that for one moment. When it comes to the establishment of the contracts for the future of the nuclear industry, we shall ensure that they allow for investment incentives and ensure that the consumer has a good deal. There is no question of it being an unattractive proposition financially to sell the industry, especially in the context of the non-fossil fuel obligation.

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