MINISTRY OF POWER
1. Mr. Lane
asked the Minister of Power what representations he has received from other large coal consumers about the proposal for a coal-burning aluminium smelter at Lynemouth; and what reply he has made.
The Minister of Power (Mr. Roy Mason)
In view of the commercial considerations involved, I think that any representations should remain confidential.
Will the Minister give us an assurance that when coal deliveries to the Lynemouth smelter start other large coal users who get their supplies from the same pit or pits will be able to get them at the same price?[column 182]
I would not give any assurances for three to four years hence, but I can assure the hon. Gentleman that no subsidies are involved in this deal.
Mr. William Hamilton
Is the Minister able to say whether there will be other aluminium smelters fuelled by coal and whether or no a statement will be made about the matter before the Recess?
I cannot promise a statement on this matter before the Recess. Negotiations are still proceeding on the two other smelter projects.
May I first congratulate Roy Masonthe Minister? I hope, for his sake and for the Ministry's sake, that he stays longer in this post than he did in his previous one. May I ask him to look again at the question my hon. Friend asked, since it is crucial in relation to the interpretation of undue preference or advantage in the Coal Industry Act that other buyers of the same quantity, from the same pits, at the same time, should have the same price as the aluminium smelter users?
I am obliged to the hon. Lady for her introductory remarks. I personally hope that I shall be able to stay a little longer than on the previous occasion. The National Coal Board is well aware of its statutory duty to avoid, and I quote:
“any undue or unreasonable preference or advantage” .
11. Sir C. Osborne
asked the Minister of Power what information he has obtained as to the price of electricity made available to aluminium smelting concerns in this country, and from international sources the price elsewhere in the world; and if he will make a statement.
I have nothing to add to the statement made by my predecessor in reply to the hon. Member for Haltemprice (Mr. Wall) on 6th February last.—[Vol. 758 c. 59.]
Sir C. Osborne
Is the Minister aware that the great hydro-electric plants in Siberia are producing electricity at 1/25th of the price being charged by their competitors in the West, and that electricity represents 60 per cent. of the cost of [column 183]producing aluminium? Before he allows this great capital expenditure in this country, will he look into these two facts and see what their effect is on world markets?
I am obliged for that information. I shall certainly look at it, if the hon. Gentleman wishes. He asked about obtaining information from abroad. I must advise him, as did my predecessor, that these contracts are confidential, and we cannot get to know about them.
Would the Minister, when considering those facts, also consider taking off the fuel tax on oil for electricity generation for these smelters, because it is thought that they could generate their own cheap electricity without any expensive investment grant or other subsidy if that was done?
I cannot give an assurance at this stage, but I will keep the point in mind.
30. Mr. G. Campbell
asked the Minister of Power if he will now make a statement on the siting of proposed aluminium smelters and the supply of fuel or power to them.
I would refer the hon. Member to the reply given by the President of the Board of Trade to the hon. Member for Blyth (Mr. Milne) and others on 29th May.—[Vol. 765, c. 1798.]
Does the Minister realise that continuing uncertainty over Invergordon is most unsatisfactory for the North of Scotland; and that the Government clearly did not give proper consideration to all the important factors involved when they made the initial announcement last year?
The hon. Gentleman should, I think, direct that question to my right hon. Friend the Secretary of State for Scotland. I am responsible for fuelling the stations but not for fuelling the station that may be in Invergordon.
Mr. William Hamilton
Will my right hon. Friend repeat the assurance of the Minister of State, Scottish Office, last Wednesday, that a statement on the aluminium smelters will be made before the Summer Recess?
I cannot give that assurance, because I shall not be making the [column 184]statement. As my hon. Friend knows, the Board of Trade, the D.E.A. and the Secretary of State for Scotland are all involved, and if a statement affecting Scotland is to be made it will be more proper for my right hon. Friend the Secretary of State for Scotland to make that statement.
Is the Minister aware that many unemployed persons in Scotland have waited on in the hope of an early announcement, and that many local populations have a real fear of mass exodus unless a decision is announced shortly?
The hon. Lady will appreciate that we have announced this redevelopment programme which will result in a new smelter industry in Britain, affecting parts of Wales, the North-East and Scotland.
Dual-Fired Power Stations
2. Mr. Lane
asked the Minister of Power what consultations he has had with the Electricity Council, the Central Electricity Generating Board, and the Gas Council on the possibilities of enlarging the numbers of dual-fired power stations.
The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson)
Dual-firing of power stations was discussed by the then Minister of Power with the nationalised fuel industries during the Fuel Policy Review. The Government's policy on conversion of coal-fired power stations to other fuels was stated in paragraph 99 of the Fuel Policy White Paper (Cmnd. 3438).
Is the Parliamentary Secretary aware that, as I understand it, about half the new stations being built in Common Market countries are dual-fired, and is he satisfied with the negligible number in this country?
As the hon. Member will appreciate, this is a matter for the Central Electricity Generating Board to consider and on which to make the necessary applications to us.
Oil Products (Temporary Surcharge)
8. Sir G. Nabarro
asked the Minister of Power what is the result of the steps he has taken to secure a reduction in petrol prices, in particular the withdrawal [column 185]of the Suez closure premiums; and whether he will make a statement.
25. Mrs. Hastings
asked the Minister of Power if he will now remove the oil fuel surcharge payable by growers in the horticultural industry.
The level of the temporary surcharge on oil product prices is under review and I expect to inform the House of the outcome very shortly.
13. Mr. Hall-Davis
asked the Minister of Power what proposals he has for securing a reduction in the volume of imports of bulk steel into the United Kingdom and an increase in the volume of exports.
We are studying this problem with the other Departments concerned, and with the industry. The excess of world steel-making capacity makes it very difficult.
In view of the fact that the value of bulk steel imports in the first four months of 1968 was as great as for the whole of 1965, will the hon. Gentleman agree that this is not just a matter for study but one of the gravest concern when seen in the context of our balance of payments position?
We accept that there should be concern, and we are concerned in this matter. However, it is not confined to this country. There is a world excess of steel-making capacity, and there are international consultations and studies going on, in which we are participating.
Mr. Patrick Jenkin
Will the hon. Gentleman recollect that the consultations and studies to which he has referred were initiated by his right hon. Friend's last predecessor but one? What progress are they making? Does he not agree that it is useless for industries in different countries to engage in what is tantamount to mutual dumping?
There is no progress to be reported at this stage. The discussions and studies are continuing. It is, of course, open to the industry to request anti-dumping action to be taken by the Government. But this is not merely confined to this country. There is a world [column 186]excess of steel-making capacity, and it must be clear that, if there is to be international agreement, it must be mutually arrived at.
British Steel Corporation
14. Mr. Ridley
asked the Minister of Power whether the amount, and the terms, of the British Steel Corporation's commencing capital debt have yet been agreed.
No, Sir. The precise amount of the debt will not be known until the value of the unquoted securities, which are still to be valued, has been settled. The total may be in the region of £820 million. I hope to say something about the terms of the debt during the debate on the Resolution to increase the Corporation's borrowing limit next Friday.
Why has this commencing capital debt not been agreed? It is now over a year since the Corporation was set up. Is the Minister aware that it is impossible to conduct business properly unless matters of this sort are known at the beginning? Will he take action where his predecessors have failed to get some progress?
Yes. But the hon. Gentleman must appreciate that settlement of the terms for the debt obviously raises complicated matters. It will take some time, and discussions are continuing with the Corporation.
24. Sir Knox Cunningham
asked the Minister of Power what, taking account of the obligation to pay interest upon its commercial capital debt, was the appropriate profit or loss of the British Steel Corporation for its first half year.
I have not yet determined the terms of the debt and I cannot, therefore, give such a figure.
Sir Knox Cunningham
Is it not likely that when the right hon. Gentleman has determined the debt the figure will show a substantial loss? If so, what steps is he taking to improve the position? In any event, will the taxpayer have to pay for the loss?
If the hon. Gentleman wants to be political about this, then he may care to know that in 1966–67 the [column 187]nationalised steel companies made a loss of about £10 million, but 10 months of that was before vesting day.
38. Mr. Berry
asked the Minister of Power how many letters he has received objecting to the salary of the Chairman of the British Steel Corporation.
Would the Minister agree that his reply confirms that the public expect the right salary to be paid to the right man in the right job? Would he not further agree that this applies equally to the public and to the private sector? Will he bear in mind that those who are paid so-called “large” salaries pay a large part of them back to the Treasury in taxation?
I do not know whether the hon. Gentleman is aware of how much Lord Melchett gets. It is, at the moment, £16,000, and it is a sum he agreed on.
Mr. Patrick Jenkin
Would the right hon. Gentleman like to set an example, and ask the nationalised industries in their annual reports to give the salaries of directors net after tax, as well as gross?
I will consider it, but I really do not think that it is necessary.
42. Mr. Edward M. Taylor
asked the Minister of Power what has been the result of his discussions with the British Steel Corporation about its price structure.
I am in touch with the Corporation about the major price review which they are now undertaking, but it will not be completed before the end of the year.
Is the Minister aware that shipbuilders, engineers and others in Scotland are greatly concerned that the Steel Corporation, like the gas industry and the Coal Board, will end by charging more for its product in Scotland? Will he give a guarantee that under nationalisation Scottish shipbuilders and engineers will not be expected to pay more for steel than those in England and Wales?
I cannot give an assurance of that kind—[Hon. Members: [column 188] “Oh.” ]—nor do I propose to do so until the review is complete.
Mr. James Hamilton
Is my right hon. Friend aware that many steel firms in Scotland are closing because they cannot compete with competitors in the South? Will he give an assurance that there will be a unified policy about prices of steel?
These are matters which I shall have to take note of after the review has been completed.
Sir G. Nabarro
Is the right hon. Gentleman aware that Selective Employment Tax premium and similar advantages given in Scotland are largely nullified by the excessive price which Scottish firms have to pay for coal, gas, electricity and other services under this iniquitous differential pricing scheme?
If the hon. Gentleman wants to pursue those questions, they should not be directed to me.
15. Mr. Emery
asked the Minister of Power whether he will announce the financial target of the gas industry for 1969–70.
Yes, Sir, when it has been decided.
It appears that the general approach of both Ministers is that there is no progress to report. In pressing the Minister, I realise that he has only just taken over, but we have had from both—
Order. Questions, please.
Will he, therefore, speed up the inactivity—
An Hon. Member
How can one speed up inactivity?
—of his two previous colleagues in getting a result in order that we can properly assist the financial state of this industry?
I expect to reach a decision on this question before the end of the year.
32. Mr. Palmer
asked the Minister of Power if he will state the expected rate of return on the £1,600 million to be [column 189]spent by the gas industry up to 1973 in the provision, among other things, of natural gas supplies to consumers.
Investment by the gas industry is expected to earn at least the d.c.f. rate of 8 per cent. prescribed for the nationalised industries generally.
I am grateful to my hon. Friend for giving a figure which the previous Minister of Power seemed unable to give. Is he satisfied that this expenditure has been properly reconciled with comparable expenditure on nuclear power and on the coal industry?
The answer, of course, must be “Yes, Sir” , because the expenditure derives from the policy laid down in the White Paper following a very long series of very detailed studies.
Mr. Kenneth Lewis
Can the Minister say how much the public will gain in a reduction in prices by this natural supply? There is a general feeling at present that this great discovery will give very little advantage in the form of cheaper prices to the people who buy the gas?
As I have said previously, it will take quite some time before the full effect of natural gas coming fully on stream will show itself in price levels, but we believe that it will have an effect in real terms on gas prices.
Gas Consumption and Prices
asked the Minister of Power what forecast of the level of domestic gas prices was used as a basis for the estimates of gas consumption in 1971 and 1975, respectively, contained in the Fuel Policy White Paper.
The White Paper estimates took into account likely movement of gas prices in relation to competing fuels, not absolute levels.
If we do not have the financial objectives and a statement about the fuel duty until the end of the year, how is it possible to form a long-term judgment of the financial position of the industry?
I suggest that the hon. Gentleman re-reads the excellent publications which have been produced by the gas industry and the appropriate sections of the White Paper.[column 190]
Is my hon. Friend aware of the feeling in the country that the gas consumer has been conned over the question of gas prices? Will he look into the high-powered advertising that goes on and which is believed by some of us to have deceived gas consumers?
The expenditure of the gas industry, as of the other nationalised industries, on advertising is only a small proportion of its turnover. In fact, there is every reason to believe that ultimately, when natural gas comes fully on stream, there will be an impact on price levels for the consumer.
North Sea Gas
18. Mr. Crouch
asked the Minister of Power what estimate he has made of the value of the capital assets of the gas industry which will be obsolete as a result of the speed at which North Sea gas is to be introduced.
The book value of assets made obsolete will be influenced by the rate of converting distributing systems to natural gas, and the conversion of oil reforming plant to produce synthetic natural gas for peak loads. The programme will adapt to developing needs. Subject to these factors, the Gas Council estimates that the book value involved might be about £300 million.
Apart from being somewhat woolly, that is an incredibly disappointing Answer. While my hon. Friends are anxious to see progress made with natural gas as quickly as possible, is he aware that the White Paper referred to the uncertainties involved in this whole project? Would he agree that £300 million is an excessive amount to become an abortive investment?
Not in the circumstances. In accepting that this will be, in effect, an obsolescence write-off, one is taking into account the fact that there will be a total benefit not only to the gas industry but to the other fuel industries and to the economy as a whole.
Mr. Hector Hughes
As my hon. Friends comments are based on the speed with which North Sea gas will be introduced, can be say what that speed will be and how it is ascertained?
The estimated period of the programme on which the Gas Council [column 191]has embarked has appeared in the White Paper and various other publications. I am not able to say in detail at Question Time how that programme was ascertained.
Steel Industry (Private Sector)
19. Mr. Michael Shaw
asked the Minister of Power if he will give details of the committees set up by him representing both the British Steel Corporation and the private sector with a view to ensuring fair competition, particularly on the question of pricing policy.
The Iron and Steel Advisory Committee, on which both the public and private sectors are represented, provides a forum for discussion of common problems.
Is the right hon. Gentleman satisfied that the private sector's interests are fully safeguarded in this matter?
The Corporation is Statute-bound to publish its prices, its customers have a right to complain to the Iron and Steel Consumers' Council, private competitors can complain to me about what they regard to be unfair practices and there is the Committee to which I referred in my Answer. What more does the hon. Gentleman want?
20. Mr. Kenneth Lewis
asked the Minister of Power whether he will make a statement about his consultations on the structure of the electricity industry.
I shall be continuing the consultations on the need for changes in the structure of the electricity industry. It is likely to be some time before I shall be ready to make a statement.
Can the Minister offer any hope that his statement will be made before the Summer Recess? Will he bear in mind, in his discussions, that the industry requires less rather than more Government interference and control by this House so that it can get on with its commercial job?
I cannot promise to make a statement before the Recess. I will take into consideration the latter point made by the hon. Gentleman.[column 192]
Is my right hon. Friend aware that employees in the industry are anxious that an early statement should be made, remembering that delay is very bad for morale?
I appreciate that, but this is rather a technical matter which will take some time. We want to make sure that if any change is merited, it occurs without disruption to the industry.
Is the right hon. Gentleman aware that this is more than a technical matter? If he is unable to make a further statement, can he say with what purpose in mind he is looking at the structure of the electricity industry? Is it to bring production and marketing closer together, in accordance with the comments in the P.I.B. Report?
We are taking that into consideration. It is one of the points we are examining.
In connection with any possible changes in the structure of the electricity industry, does my right hon. Friend envisage the industry working more closely with the gas industry? Is he aware that large savings could be made—for example, in advertising and salesmanship matters—and that these industries could work closer together instead of often being in opposition to each other?
Yes, Sir. I am aware of that and no doubt the House will have noted that my hon. Friend the Parliamentary Secretary has on some minor points, though not on major matters, been trying to get both sides to work together, especially in the use of showrooms and meter reading.
22. Mr. Kenneth Baker
asked the Minister of Power what consultations he has had with the Electricity Council and with the Gas Council about the scope for greater productivity in meter reading; and if he will make a statement.
I have had extensive discussions with the industries' area boards in different parts of the country about joint meter reading and the possibility of feasibility studies being carried out. These discussions have covered other [column 193]aspects of efficiency in meter reading as well.
Is the hon. Gentleman aware that about 5,000 men are going round the country reading gas meters while another 5,000 are reading electricity meters? Will he give some urgency to the task of combining the two forces into a national meter-reading force and so make a substantial overall saving?
I suggest that to begin with the hon. Gentleman checks his figures. Those he gave were not quite accurate.
That is no answer.
If the hon. Gentleman will contain himself, I will explain the position. I have looked again at the question which the Weir Report considered—that of an independent meter-reading service—and I have concluded that that is not the right way to deal with this problem.
Is my right hon. Friend aware that hon. Gentleman opposite had 13 years in which to do something about this, but did nothing?
26. Mr. Kenneth Baker
asked the Minister of Power what representations he has received for changes in the salary structure of the persons appointed by him in the coal, gas and electricity industries; what reply he has sent; and whether he will make a statement.
I would refer the hon. Gentleman to the Answer given on 1st July by my right hon. Friend the Secretary of State for Employment and Productivity.—[Vol. 767, c. 1081–6.]
That Answer referred to the whole salary structure of the P.I.B. Pending the P.I.B.'s Report, will the right hon. Gentleman give an assurance that salary considerations will not inhibit him from appointing the right man to the right job?
When vacancies arise I shall certainly do as the hon. Gentleman suggests and suggest the right man for the right job.
As there is a vacancy, will the right hon. Gentleman give an [column 194]assurance that the salary level will not preclude him from attracting the best man for this job?
I am hoping that the salary will not preclude such an appointment. It depends, of course, on who we have in mind for the job.
Domestic Gas Appliances (Safety)
27. Mr. Goodhart
asked the Minister of Power whether he is satisfied that the safety precautions of the gas boards are adequate when domestic appliances are fitted; and if he will make a statement.
Yes, Sir. The high safety standards of the industry were confirmed by a detailed survey by officials last year. My right hon. Friend will examine carefully the findings of the inquiry into the accident at Ronan Point to see if they suggest any improvements are due.
Is the Minister aware that, on grounds of economy, cut-off points are no longer automatically fitted in each appliance when it is installed and that there is some anxiety about this?
If the hon. Gentleman cares to write to the Department on the subject we will certainly take it up with him.
New Power Stations
29. Mr. Shinwell
asked the Minister of Power what decision has now been reached about an electricity generating station at Seaton Carew.
36. Mr. Lubbock
asked the Minister of Power when the Central Electricity Generating Board will be allowed to place orders for the Hartlepool and Heysham stations.
No decision has yet been reached. The timing of orders for any new power stations will depend on the outcome of the present capital investment reviews.
Is my right hon. Friend aware that we have been waiting for a decision for two years, and now that we have a new Minister surely there will be an improvement on his predecessors? If there is not, we will tell him to get out. Is he aware that it would be far better to reach a decision, whatever it is, because [column 195]as things are there is a good deal of insecurity?
I am aware of my right hon. Friend's views. I noticed that in the Adjournment debate on 11th April he said and he has repeated it today—that what he wanted was a decision, irrespective of whether it was in favour of nuclear power or coal. I hope to be able to give a decision fairly soon.
Is the right hon. Gentleman aware that the last order for a generating station was placed by the Central Electricity Generating Board in March, 1967, for Hinckley Point B? How does he think that the electrical manufacturing industry can make progress when it does not get an order in 16 months?
I appreciate that one of the great concerns about this delay is the effect on suppliers, and although I appreciate the point that the ordering took place in March, the start was in September, 1967.
Is the Minister aware that we have had one excuse after another over the past two years in order to qualify the Government's indecision? We now have before us today a suggestion by my right hon. Friend about capital estimates. Some time ago it was load estimates. Will my right hon. Friend understand that a case has been made out, and that the unemployment position in my area also requires a decision?
Sir W. Bromley-Davenport
Too long. Sit down.
I assume that my hon. Friend is speaking to an hon. Member opposite. A decision on the Central Electricity Generating Board's investment programme is expected before the autumn, so we shall be able to clear up the matter then.
Though we are in the white heat of the technological revolution the right hon. Gentleman's Department has made no decision of any sort whatever. Will the Minister now undertake to give a decision on this matter before the Summer Recess?
No, Sir. I cannot make a decision before the House rises.[column 196]
Natural Gas (Conversion of Appliances)
31. Mr. Dempsey
asked the Minister of Power if he will give a general direction to the area gas boards to take steps at their own expense to convert domestic gas appliances for the use of natural gas; and if he will make a statement.
No, Sir. The boards are already doing this. Under the Gas Act, 1948, they must meet the cost of converting consumers' appliances to use natural gas.
Is my hon. Friend therefore giving the House an assurance that the Scottish Gas Board will be responsible for the cost of the total conversion of all gas appliances that will be using this supply of natural gas, in view of the fact that gas prices are much higher in Scotland than in England and Wales?
The Scottish Gas Board is in precisely the same position as every other area gas board, in that it will undertake the conversion and will not charge individual consumers.
35. Mr. Lubbock
asked the Minister of Power in what areas the gas supply to consumers has been converted to natural gas; and what has been the average cost per consumer in each case.
Conservion programmes have been started in six of the gas board areas. Only a very small proportion of consumers have so far been converted, and it is too early to give a realistic average cost per consumer.
Will the Minister give these figures to me when they become available? Is he aware that the National Board for Prices and Incomes has estimated that it would cost £30 per domestic consumer to convert to natural gas? Does not that seem a very high figure, and will be look at it?
Yes, Sir. This figure has been bandied about and may well prove to be true, but I want the hon. Gentleman to realise that in the cost of conversion there are—apart from the conversion of appliances—surveys, administrative costs and associated distribution costs, which have to be taken into consideration.[column 197]
Generating Plant (Orders)
33. Mr. Palmer
asked the Minister of Power if he will counteract the reduction of orders for new generating plant due to the present recession in electrical demand by sanctioning an accelerated programme for the replacement of out-of-date plant in order to improve the overall efficiency of the British electricity supply system and to reduce operating costs.
I shall take these points into account in considering the electricity industry's capital development programme.
Is my right hon. Friend aware that the electrical manufacturing industry is having great difficulty in maintaining export targets because of lack of home orders? Is not this suggestion a very sensible way of getting over the difficulty?
I should remind my hon. Friend that the C.E.G.B. already has over 20,000 megawatts of new plant under construction, but I appreciate that some older plants that are labour-intensive could go out, and would be a saving if we embarked on a new building programme, so we will keep that point in mind.
Fuel Policy (Devaluation)
40. Mr. William Hamilton
asked the Minister of Power if he will make a statement on the progress made in modifying the contents of the White Paper on Fuel Policy following devaluation; and whether such modifications will result in slowing down of the rate of pit closures.
I would refer my hon. Friend to the reply given to him on 6th February by my right hon. Friend, the present Minister of Transport.—[Vol. 758, c. 211.]
Is it not the case that my right hon. Friend's two predecessors said that there would be no appreciable difference in the content of the White Paper as a consequence of devaluation? Does he himself accept that position? If he does not, will he produce another White Paper, and make sure that it is debated on the Floor of the House?[column 198]
On the latter point, “No, Sir” . On the first point, what did come out was that devaluation made British coal cheaper in export markets and although these will increase there will be no dramatic increase.
Would not one of the effects of devaluation be to alter the order of merit of existing plants of the C.E.G.B. system, and will he say how much coal he expects to be burned in C.E.G.B. stations in 1968–69 as a result of the change?
I could not go into that detail without prior notice.
Gas Prices (Scotland)
41. Mr. Edward M. Taylor
asked the Minister of Power by what percentage the price of gas in Scotland exceeded the average revenue per therm in England and Wales in the latest annual period for which figures are available; and what were the comparable percentage differences in each of the previous four years.
25 per cent. in 1966–67; the figures for the four preceding years, beginning with 1962–63, were 24 per cent., 19 per cent., 13 per cent., and 17 per cent.
How can the Minister justify a situation in which all people in Scotland pay a quarter more for gas than all people in England and Wales? Does he not realise that this undermines a great deal of the work done by industrial development and otherwise? Will be reconsider the whole question?
As I have tried to point out in answer to previous Questions, it is not correct to say that this compares with all people in England and Wales. One must compare one with another and those in Scotland are not the highest priced in the country.