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European Community (Energy Policy)

Volume 932: debated on Tuesday 17 May 1977

The text on this page has been created from Hansard archive content, it may contain typographical errors.

10.13 p.m.

I beg to move,

That this House takes note of Commission Documents Nos. R/75/77 (rev 1), R/477/77, R/478/77, R/479/77 and R/684/77 on EEC Energy Policy.

I shall begin with a word of introduction. The Scrutiny Committee asks that we include in our discussion Commission Document No. R/684/77 relating to refinery policy. I believe that the Leader of the House omitted to mention it when he announced the business for the week, but it is on the Order Paper.

The House will appreciate that it is right that immediately after the Summit discussed energy policy we should have another debate on Community energy policy. The Scrutiny Committee in fact recommended that we should have a debate on some of these matters before the 29th March Energy Council, and we did have a debate on 21st March on coking coal. We shall broaden the subject tonight.

At the Energy Council meeting on 29th March we had a general discussion about the energy prospects for the EEC. There was a discussion on conservation. We also agreed that Euratom loan scheme and the extension of the coking coal aids. Another decision was taken: it was decided that there should be national surveillance of coal imports from third countries. On 29th March I failed to persuade the Council that its meetings on conservation should be held in public. I attached much importance to that, and I still do.

On 14th June there will be another Energy Council meeting—the last under my presidency. We shall have proposals from the Commission for the protection of energy investments, including minimum safeguard price, with draft instruments before us. We shall have some papers on refinery policy—to which I shall refer tonight—and we shall have more on conservation. I very much hope that we shall have a general discussion on nuclear policy, rather like the discus sion that we had on conservation at the March meeting.

Perhaps I may now turn to the individual instruments that the Scrutiny Committee invited the House to consider, and then, if it is agreeable, before I finish I should like to broaden the discussion so as to set it into a wider perspective.

Document R/479/77 deals with energy saving and was, as I have mentioned, discussed. No new policy issues are involved. There are no legislative proposals brought forward. However, every country, including the United Kingdom, attaches great importance to energy conservation, and although we have indigenous fuels at present in plenty, that is no excuse for inaction on our part. We estimate that we have saved—a genuine saving—at least 2 per cent. of primary energy in the United Kingdom, and, of course, we are part of an IEA programme as well, and the United States is also involved in conservation measures, which was underlined by the President in his statement in April.

Recommendations had been accepted in May 1976 by the Council of Ministers dealing with thermal insulation of buildings, with heating systems, with information about road vehicles, with some provisions on urban transport and with appliance labelling. We have asked the Commission to elaborate these proposals, but they will require action at all levels and it would not necessarily be wise or sensible to try to standardise our procedures here. This is an area in which each country will want to adopt what seems sensible to itself, and I hope that this will not require directives.

I now turn to Documents R/75/77, which is the paper referring to coal for electricity generation, and R/478/77 on the Community coal situation. I should like to refer to each of those very briefly in turn.

In December 1974, the Council of Ministers decided to maintain coal production at 250 million tonnes per annum up to 1985 to try to reduce the dependence on imported oil and to increase the security of supplies. The importance of coal will grow. That is widely recognised in the United States, which has an objective now of over 1 billion tonnes of coal a year, which is the same as that of the Soviet Union, which also plans to expand coal production.

The present coal production in the Community is the equivalent of 166 million tonnes of oil—that is, one and a half times or one and two-third times the full production of North Sea oil. For every 1 million tonnes of coal that we can produce and use, we are saving 600,000 tonnes of oil.

However, it is a fact that the coal targets set by the Council in 1974 have not been met. There has, in fact, been a 9 per cent. fall in coal production since 1973, and in 1976 only 229 million tonnes of coal was produced in the Community compared with the target of 250 million tonnes. This is partly because of the recession, which has affected the steel industry, and partly because imports of coal have risen and, therefore, stocks have risen, too.

In order to meet this, the Commission has made two proposals. I shall deal with them one by one. Document R/75/77 is to promote 30 gigawatts of coal-fired capacity by the 1980s to burn 37 million tonnes of coal—which is the equivalent of 26 million tonnes of oil. For this purpose, 500 million units of account, or £327 million, would be made available, of which the United Kingdom would be required to pay between £70 million and £80 million over a 12-year or 15-year period. The intention is that this should be used to cover 30 per cent. of the extra cost of having coal-fired stations. That would be spread over a 12- to 15-year period at a maximum annual spend of 50 million units of account, or £32 million. The electricity authorities would be asked to make an estimate of their coal-burn seven years ahead. If they failed to meet their estimate of burn, the aid would be withdrawn.

Of the 30 gigawatts of coal-fired capacity, how much of that is attributable to the United Kingdom?

That would depend on the the extent to which we took advantage of it. We have an interest in taking advantage because we have a great deal of coal. I cannot give a specific figure as it will depend on the decision that is taken in respect of conversion or of new coal-fired stations, for example.

The programme is needed to sustain a burn of 150 million tonnes of coal by 1985 and to prevent a fall, which might otherwise occur, to 90 million tonnes of coal. It is a modest aid as proposed and the grant or assistance that is contemplated would meet 30 per cent. of the additional cost of a coal-fired station, which is normally about 20 per cent. above the cost of an oil-fired station.

Is aid available to meet the additional cost of reducing sulphur emission from a coal-fired station to the equivalent level of emission from an oil-fired station?

If I cannot give a precise answer now, I hope that the hon. Gentleman will forgive me. My understanding is that the aid is intended to cover the capital cost. Therefore, the problem of sulphur emissions would be catered for in so far as it would be involved in the capital cost of building the stations. That is my understanding. Does that sound right to the hon. Member for Bridgwater (Mr. King)?

My right hon. Friend will present the House with the correct answer as he can wait for a message while I struggle on as best I can. However, I think I have it right.

The other proposal that the Commission makes is that there should be a monitoring of third-country imports. This we put under way at the March meeting. It will provide the Commission and member States with some knowledge of what is happening. That is intended to be part of our policy for increasing our own independence.

There were two other proposals that are not really for discussion tonight. One proposal has already been dealt with—namely, the coking coal subsidy, which was extended at the meeting of 29th March. The other proposal is Community aid for coal and coke stocks, which would be to meet one-third of the excess of stocks exceeding one month's supply, up to 20 million tonnes. That is under examination by the Commission, and it may come up for discussion in June. It will have to go to the European Assembly for comment before a decision can be taken. That is of considerable importance to us because of our coal interests.

I turn to the third item, R/684/77, dealing with oil refinery problems. There is estimated to be a surplus in the Community of 140 million tonnes of refinery capacity. The reason for that is partly what took place in 1973 and what followed from it and partly the recession. This is an industrial problem that confronts individual States, and the Community has decided to examine the matter. The Commission has proposed a standstill on construction and a withdrawal of marginal or less efficient plant and a monitoring and consultation process on the construction of new refineries. We share the problem because in 1976 our own refinery utilisation was at the level of only 67 per cent. Under the legislation that Parliament has passed, I have power to control new plant.

Our interest in refining policy as a major oil producer, however, is not the same as that of other member States. Since my predecessor, the present Secretary of State for Industry, made a statement on refinery objectives in December 1974, it has been an objective of United Kingdom oil policy that on average two-thirds of our oil should be refined in the United Kingdom. This is a very important national interest for us because if we are able to refine our own North Sea oil the value of that is added here, and that is a benefit.

There is therefore no question of Her Majesty's Government encouraging refinery closures. Four new projects in the United Kingdom have already received planning permission and the Commission has been notified. We cannot accept that a sensible procedure for consultation can mean a standstill on new refinery capacity if a case for it can be made out. In any case we know that more secondary processing plant is needed in the Community.

There is one other aspect of the refinery policy to which I should draw attention en passant, and that is the importation of refined products from the oil-producing countries. Clearly, it is likely that there will be an expansion of capacity in those countries, and this is a problem for the future that we shall have to watch very carefully. We want proper information, consultation and discussions with third countries about it. It is possible that some measures might be necessary.

I have given the House a brief report on the papers that the Scrutiny Committee has asked the House to examine. Perhaps I might now be allowed to set this discussion against a wider background. I think that it is increasingly understood each time we debate the subject that there seems to be a wider public acceptance of the central rôle of energy provision and energy policy in the policies of all countries. Energy is vital to the national interests of all member States of the Community. Any sensible British Minister, particularly now during our presidency of the Council, must respect the fact that we are dealing with central national interests of other member countries.

There is no question of the Community controlling EEC energy resources. Those countries that have those resources will trade in them. We shall trade in energy and our contribution will be through trade. Our great wealth in coal, oil and gas and our skill in nuclear generation put us in a very powerful position. I gave the figures in our debate on 21st March.

I have tried to build on our common interests at a sensible pace. That is to say, I have tried to discover the interests of the other member countries and gradually to put the pieces of the jigsaw puzzle together in a way that meets our common interest. But, apart from what the Council of Ministers might do, the Treaty of Rome applies in this area.

There are aspects of the matter that we did not discuss at the March meeting, so perhaps I can mention them now. For example, the Commissioner for Competition, Commissioner Vouel, came to see me two days ago to discuss the impact of the interest relief grants. These have been a part of our policy for stimulating the opportunities for British industry to take advantage of the great potential that exists for supplying equipment to the North Sea. This scheme was introduced not by the present Government but by the Conservatives, but it was made known to the Commission at the time. I think the scheme was introduced in 1973 but was brought forward under the Industry Act 1972. It is a most important interest of ours because the percentage of equipment orders won by British industry has risen from 30 per cent. to over 50 per cent., as the Brown Book revealed, and 100,000 jobs, particularly in Scotland, have derived directly and indirectly from this. The Interest Relief Grants Scheme, introduced by the previous Government, is of great importance to us. We hope that there will be further discussions about this because, as is widely known, the Commission has raised queries on it. There are other areas of possible energy—

I am not quite clear about what my right hon. Friend is saying. Is he saying that the Commission is objecting to these arrangements, which are very important for all these jobs? What exactly does my right hon. Friend mean?

In order to give the House a perspective of this I was reporting that the Treaty of Rome on State aids, which applies to all State aids, applies with regard to energy, and that the discussions we are having with the Commission represent just one aspect of this policy. Of course, in other areas of oil policy, such as refinery policy, landing provisions and power station siting, there is a Commission interest. These are things that any British oil Minister has to work on where essential interests are concerned.

Do I take it that, while bearing all these things in mind, my right hon. Friend will observe the overriding necessity to stick to the policies which we have been operating and not allow the Commission to interfere?

Discussions are in progress. I do not believe I am saying anything that the House does not already know arising from the provisions of the treaty, which are dealt with by the Commission and can ultimately be dealt with by the court, which do not lie within the authority of the United Kingdom or, indeed, any member State. I am not saying anything new to the House. I was just putting some of the aspects of membership of which the House should be aware.

I turn to the international aspects of energy policy, with which I have been particularly concerned in visits over the last few weeks. First, there are many forums in which energy policy is discussed. There is the OECD, of which we are members. There is the International Energy Agency, of which we are members. There is the CIEC, or what has loosely been known as the North-South dialogue. There are various congresses such as the World Power Congress, the World Petroleum Congress, the International Atomic Energy Agency and the London Club of Nuclear Suppliers. We are one of the three signatory States to the Non-Proliferation Treaty. There is no doubt whatever that energy is discussed worldwide and not only in a Community context.

As the House knows, I had a series of meetings to which perhaps I might briefly refer. First, there were my visits to the EEC capitals as President of the Energy Council, and then I went to the United States for discussions with Dr. Schlesinger, the Secretary-elect for Energy, in which I took the opportunity of discussing with him a range of nuclear interests including uranium demand and supply, waste reprocessing, the fast breeder, fusion, and nuclear accounting.

I followed this with a visit to Norway, where we have a strong common interest with the Norwegians, and then to Saudi Arabia, which has a massive oil capacity which can operate to the extent of three North Seas without any loss of revenue to Saudi Arabia. If the taps are open the price goes down and if the taps are closed the price goes up. More recently, last week I went to the Soviet Union. Perhaps I should put the figures on the record. The Soviet Union has 57 per cent. of world coal, 45 per cent. of its gas, 60 per cent. of its peat, 12 per cent. of its hydro power and 37 per cent. of its oil-bearing areas. There is a nuclear programme which was begun in 1970.

China is another factor of which little is known, although there are some indications, and, of course, the Third world is enormously interested in energy because those that are without oil are very much affected by high oil prices.

It is clear that Britain must play its full part as a full member in these discussions. Shortly we shall be the tenth largest oil producer in the world. We have 300 years—45 billion tonnes—of coal, and 13 per cent. of our elecricity is already generated by nuclear power. When the AGRs now under construction are completed this will rise to 20 per cent.—the maximum figure cited in the recent report published by the Massachusetts Institute of Technology. Also we have gas reserves. We are the only self-sufficient industrial country in the Western world, and we must see that we use our energy strength in a number of ways.

We must proceed with a planned United Kingdom energy policy, and use the revenues to meet our debt repayment obligations and to reindustrialise our own country through developing our oil equipment industry and our manufacturing industry.

We must make a major and independent contribution to world energy discussions, which, at the moment, do not exist. There is no real forum in which all these forecasts could be harmonised. I made this point in the United States, Saudi Arabia, the Soviet Union and Norway about the need for harmonisation of forecasts of supply and demand because it is against that background that all our planning needs to take place.

Over the weekend at Suningdale I had some discussions on this problem. If one thinks about it, one sees that this applies to Britain, the EEC and the world as a whole. The major long-term objective of energy policy, as far as we are concerned, is to see that we are able to maintain self-sufficiency of supplies in the 1990s when current projections show a shortfall in assured domestic provision at a time of projected world energy shortage.

There will need to be a large commitment, but resources will be required soon because of the long lead times in the development of alternative energy resources, whether they be nuclear, gas, conservation or other resources. Before Parliament and the public are committed to expenditure of this magnitude they need to be satisfied about the size of the energy gap within maximum and minimum margins. They also need to be satisfied on the time scale, on alternative ways of reducing or eliminating the shortfall, and on the cost and reliability of the alternative ways of doing it.

I aim to report this to the House of Commons. I aim to encourage the EEC to do the same. We all shall be feeling our way forward in the same direction. I want to see the widest world interest in these problems, because these are key questions in energy policy, in this country, worldwide, and, of course, inside the EEC. In that context I aim to play a constructive part.

Is the Secretary of State suggesting that he should publish a White Paper in the near future, or is he proposing to deal with this matter through his Energy Commission, or both?

I mentioned at the last meeting that I would try to see each draft of what we have been working on as it becomes available. I said last time that it was illegal to leak and premature to publish. It is best to let documents seep out. Working documents in my Department have seeped out with my good will. They have been conveyed to the NEDC and the chairmen of the nationalised industries. They are available quite widely, and I thought that they had been put in the Library of the House. If not, I hope that they will be available. I am reluctant to go along with one of those classic major White Papers that are published and then are out of date almost as soon as they appear. It is better that a working document should be published when the Energy Commission is set up—and the delay has been caused by the fact that everyone wants to be on it. When it is set up and these documents come to the Energy Commission, I hope that they will be made generally available at the same time so that no one will be excluded from an examination of the current thinking of the Department.

I am trying to do it in that way. It is less dramatic than the great build-up to a White Paper, but I am not sure that it is not a more sensible way of dealing with a situation in which circumstances change. In any case, we want to hear the current comment and to take decisions as they are needed rather than to hold anything up. We want to share this information as widely as possible.

10.41 p.m.

The House will be grateful to you, Mr. Deputy Speaker, for reminding us, as you put the Question, that we are talking about European policy matters and papers dealing with energy. I can well understand the confusion in the mind of the hon. Member for Coventry, South-West (Mrs. Wise) in trying to determine what the Secretary of State's attitude was to these European affairs. The House might not be aware that we have been listening to the President of the Council of Energy Ministers for the Community addressing himself to a range of policy matters since the House will have noted that, with his usual ambivalent pose, on no single occasion did the right hon. Gentleman give any indication of his attitude to the policy of which he was inviting the House to take note.

The Secretary of State is an extremely suave and articulate performer at the Dispatch Box. He charmed all of us with his description, but I imagine that I am not the only hon. Member to have noted that on no occasion when he was explaining these matters did he give any indication of the Government's views—or his own. The House it entitled to hear them.

I would certainly never accuse the hon. Member of being suave or charming and I hope he will acquit me of ever doing any such thing. If he has the opportunity of reading Hansard carefully he will see that I not only announced what the Government's position was at the 29th March meeting where the coking coal arrangements were made and when the Euratom loans were approved, but I also described in detail how we were approaching each of the policies coming forward and exactly what our view was on them. I think, with respect, that the hon. Member will not find another President of the Council of Energy Ministers who has spent as much time in discussing these problems with other member States as has been the case in the six months of our presidency.

The Secretary of State will have to read those two speeches together, if we ever get Hansard printed again. I listened extremely carefully to what he said. He explained the purposes of the papers he was presenting, but he studiously avoided any direct involvement with them or any commendation of them. My hon. Friends will have noted that. They will also have noted the enthusiasm of the Secretary of State to stray outside the terms of the papers before us and to indulge in a tour d'horizon, telling us of his trip to Moscow and other parts of the world, including Saudi Arabia.

We hope to hear of the world scene when we have the wider-ranging debate on energy policy, which I hope the right hon. Gentleman will arrange with the Leader of the House, following my request. We are tonight dealing exclusively with European policy matters. This is a suitable time to debate such matters because we are half-way through the penultimate month of the six-month presidency of the Council of Energy Ministers of the Community. It is, therefore, interesting to see just what has happened in that time. I suggest that the Secretary of State's performance has had all the marks of the performance that we might have expected of him in such a capacity.

The right hon. Gentleman started with what I understand was an extremely impressive performance before the European Parliament Committee for Energy which greatly encouraged both my Friends and other hon. Members of that Committee. At the start of his presidency the Secretary of State was impressive in answering questions from the Committee and the Committee was enormously encouraged. The right hon. Gentleman was as impressive as he always is in the House.

However, I am worried because I have been checking up today with a number of hon. Members about what they have felt about the conduct of the presidency since that impressive public relations launch. There is deep disillusion over what has happened. The first paper refers to European energy policy and it is an opportunity to review just what has happened to European energy policy since the Secretary of State took over the presidency on 1st January 1977.

The Secretary of State may like to intervene and correct me if he feels that he has more achievements than I shall now enumerate. We have unfrozen our position over Euratom—a position that has been described by some of our colleagues in the Community as an "asinine British position". It was a position that, as the right hon. Gentleman knows, was bitterly resented by other members of the Community because the British obstruction of nuclear subsidies and encouragement for additional nuclear capacity hit other countries in the Community far harder than it hit us because their position in electricity generating was different from ours. We obstructed that for our own purposes in negotiating. The right hon. Gentleman knows that that is true. We then changed our position in what must have been one of the most humiliating negotiating sessions in which any British Government have ever been involved in the Community.

There also was the tragic failure to agree on JET. I do not propose to pursue that matter, but one of the most important research projects in the Community has made absolutely no progress whatsoever. There clearly was an opportunity for resolving that matter. There is a widespread belief that the conduct and record of the right hon. Gentleman and the Minister of State at that meeting was singularly unhelpful. The JET project has made no progress.

Would the hon. Member for Bridgwater (Mr. King) care to say were the JET project should be sited?

I should like it to be sited at Culham. Hon. Members may say that it is impossible, through negotiation, to get it sited there, but do they know—and we have made inquiries—what happened at that session that night in Brussels? It was one of the most disgraceful episodes in the whole conduct of the Secretary of State in his presidency of the Council of Energy Ministers. I suggest that the hon. Member for Sheffield, Heeley (Mr. Hooley) does not know that. The Secretary of State was not in the chair but—

Not only was I not in the chair but it was not a meeting of the Energy Council. It was a meeting of the Research Council, which we are not discussing tonight. I should not dream of asking you, Mr. Deputy Speaker, to protect me, but the hon. Member for Bridgwater (Mr. King) must recognise that the Research Council discussions were entirely separate from the Energy Council discussions. I am content that this should be a general debate, but I should make it clear that that was another Council of Ministers.

I do not know what the right hon. Gentleman hoped to gain by that intervention. Is he suggesting that he had nothing to do with the siting of JET or that he did not spend considerable time trying to organise its siting? Is he saying that JET has nothing to do with future European energy policy? If so, I can understand his intervention. If not, his saying that, technically, it was not the Energy Council—

On a point of order, Mr. Deputy Speaker. We are supposed to be looking at a number of documents and our time is limited. The hon. Member for Bridgwater (Mr. King) is paying no attention to the documents and is talking about matters that should be reserved for the general energy debate mentioned by my right hon. Friend.

This is a wide-ranging debate on the whole energy issue and it would be difficult to limit it. However, I hope that we shall now get down to discussing the documents.

Further to that point of order, Mr. Deputy Speaker. The document on energy policy specifically refers to research and development in a wide context in a number of places. Surely it must be relevant to the whole concept of European energy policy to discuss research and development.

There is a time limit of two hours for the debate and, judging from the attendance in the Chamber, many hon. Members wish to take part. Points of order on matters to which I have already replied are a waste of time.

The Secretary of State talked of his discussions in Saudi Arabia and his visit to Russia. I am dealing with a European project, and this is what the papers are about. I understand that the hon. Member for Rother Valley (Mr. Hardy) wants to protect the Secretary of State, but the right hon. Gentleman can just take it for a few more minutes. I have spoken for 12 minutes so far and the right hon. Gentleman took 30 minutes. I shall try to keep my remarks brief.

We have gained no friends by unfreezing our position on Euratom—a position that we were unwise to take—and have made many enemies over our handling of JET. We have half of the coal resources in the Community, and I have heard a disturbing story that, because of our attitude over Euratom and JET, other countries may be less than wholly co-operative over some important proposals that would be helpful to us and our coal industry. I hope that this is not true, but it is the story that I have heard.

If it is true, it is an indication of how, after the bright dawn of the Secretary of State's start as President of the Council with his rush around Community capitals, subsequent results have been abysmal.

The hon. Gentleman has spoken of stories that he has heard. What does he conclude from them? Our conclusion is that because we have taken a stand on Euratom and JET in order to protect our national interest, the Community is taking retaliatory action. Is that the conduct of friends?

I suggest that the hon. Gentleman should do some homework and should talk not only to the Secretary of State but to the Minister of State, who may have a different view of developments in Europe. Let the hon. Gentleman discuss these matters further and then come back to me. I shall try to help him. The hon. Gentleman may know the background to the situation. There are difficult negotiations. Of course, there are different national interests. It is a complex matter to try to get a reasonable balance within the Community.

The tragedy of the present situation is the way in which things have been mishandled. It is not difficult to understand the motivation. I do not think that any hon. Member in the House believes that the Secretary of State is passionately keen on making a great success of Europe in any case.

There is a further and wider background to the policy papers before us. During the Secretary of State's presidency—I do not blame him for this—the European energy situation has sharply deteriorated. Oil imports are increasing rapidly. Therefore, dependence, so far from reducing, is increasing.

In the past six months the potential development of nuclear power has received a major setback within the Community. I think that hon. Members will be aware that court actions in Germany and in France have posed a major threat to the development of the thermal reactor progamme.

I am sorry, but others wish to speak, and I want to be brief.

Another area where it is disappointing to see such poor results is in conservation. The Secretary of State quoted a figure of 2 per cent. That is an extremely disappointing figure. I must be critical of efforts at conservation in this country as well. Any hon. Member who addresses himself to the problem and realises the scope that is attainable must feel that our efforts at conservation are still woefully short of what should be achieved.

It is interesting to note that we are supposed to have an energy saving policy committee—the Secretary of State did not refer to this matter—to try to exchange information and to bring forward proposals for concrete action by midsummer. I am not sure whether we have had any proposals for concrete action in the first half of the year, but that is what is indicated in the papers. I am not aware that such proposals have been made.

A further area of concern to me relates to coal. We in this country are aware of the importance of coal. As I said, we have more than half the total coal reserves in the Community. What is happening to coal in the Community? The Community lays great stress on the importance of burning more coal. We have proposals for encouraging electricity generation from coal. What is happening? We have reducing domestic production and increasing imports.

The forecast in the papers is that domestic production will continue to fall and that imports will continue to rise. It will be ironic if the proposal is that, as a Community, we are to reduce our dependence on imported oil and to replace it by dependence on imported coal. That would seem to be an unsatisfactory switch.

The documents indicate that coal imports into the Community have gone up by 50 per cent. since 1973. We have the ironic situation of rising imports, falling productivity and rapidly rising stocks. These documents indicate that the level of coal stocks is expected to be 71 million tons at the end of 1977. That is virtually equivalent to the total annual coal-burn for electricity generation in this country. How much of that is expected to be the United Kingdom's stock at the end of that period? That is certainly an extremely worrying figure. The papers on these various matters indicate the need for a co-ordinated policy approach to energy. My hon. Friend the Member for Ross and Cromarty (Mr. Gray) particularly hopes to raise the question of oil refinery policy.

One of the most humiliating occasions for us was when President Carter was able to arrive at the Summit Meeting with a prepared policy position for energy in the United States, but when he asked the Summit Meeting what was the European policy approach to energy there was a fairly deafening silence. The Secretary of State has had responsibility for this matter for the past four and a half months. Such is the urgency of this matter that the paper before us tonight was prepared on 25th February, the Secretary of State wrote a letter to Parliament on 10th March, and the House actually gets round to debating it today, on 17th May, after 10 o'clock in the evening.

What is needed in Europe, and in Britain as well, is a far more impressive and far more co-ordinated approach. As has been made clear by the experience of the United States, a wide range of Departments are involved. These policies cannot be implemented by the Secretary of State for Energy alone. They are also matters for the Chancellor of the Exchequer and the Secretaries of State for Transport, Trade, and the Environment. Whatever the arguments about figures, the Secretary of State knows that the energy situation will at some time become extremely serious. If we are to respond to that serious energy situation, we need a much more dramatic, much more coordinated and much more urgent approach by the Government. The dilatory approach indicated by these documents and the passing references by the Secretary of State tonight are all indications that, as yet, the Government have totally failed to comprehend the need for a British and European energy policy.

11.2 p.m.

I am glad that the hon. Member for Bridgwater (Mr. King) referred to general European energy policy, because. I hope to do the same shortly. I think that the hon. Gentleman was far less than generous to the Government, and particularly to the energy Ministers, in his references to Culham and the European nuclear fusion developments. It cannot be doubted that the British Ministers—and I am sure that Conservative Ministers would do the same in similar circumstances—have done their utmost to get the plant sited at Culham. It was most unfair and inaccurate to suggest that our present Ministers did not do this.

I wish to say only a few words about particular EEC documents. It could be said that they are not very controversial in themselves, except perhaps the oil document Certainly the documents on coal and energy saving refer to policies that can either be operated under existing United Kingdom legislation or, in many instances, policies that are being operated already.

On energy conservation, for instance, those of my hon. Friends who share membership of the Select Committee on Science and Technology know that the Committee made about 40 separate recommendations to the Government about ways and means by which energy could be saved in this country without loss of efficiency. The question now is not about the principle of energy conservation but about how fast the savings are being made. The Select Committee, after taking a vast amount of evidence, felt that 15 per cent. could probably be saved by the end of the next decade or, more optimistically, in even six or seven years' time.

I note from these documents that that figure is not significantly different from the ideal EEC estimates. But the saving after two or three years of the "Save It" campaign by the Department is about 2 per cent. I do not think that it is particularly impressive but, to be fair, that saving should be taken in relation to the growth of the national product during that time.

In its document on conservation the EEC points out that the essential difference between reductions in consumption due to higher prices and economic recession and genuine savings because of higher efficiency of utilisation must be differentiated, because they are not the same thing. I think that that is a sentiment well understood by the Select Committee and I hope appreciated in the Department.

I turn to the general document on the West European energy situation to which the hon. Gentleman made so many references. It is certainly the document that interests me most. My right hon. Friend gave us an account of his travels to the Arabian sands and to Moscow. I do not think that he has very recently been to Washington.

I beg my right hon. Friend's pardon. But I do not think that he has been there since President Carter made his speech. It seems to me that if that speech had been made before the EEC document was produced, the document might in itself have taken a different form or could have been seen in a different context by us. I say that because the new American view on nuclear policy, not only for the United States but for the world generally, has important implications for Western Europe and the United Kingdom. American companies have supplied most of the nuclear systems which are used in Western Europe, and on the assumption that the American companies are up to point bound to be under the influence of the American Government—if it is not the other way round—one cannot avoid the implications of some of President Carter's remarks. Indeed, several of the EEC countries, notably France, have already indicated their dissent from the Carter assumptions and deductions.

Are the British Government, as an EEC Government, formulating continuing views on the Carter approach and are those views likely to support the President of the United States, or, in view of our own energy needs, particularly nuclear, are those views likely to be different? I think that our view should be different. President Carter very properly thinks, as I imagine we all do, that the proliferation of the means to make nuclear weapons should be severely restricted. That is why there is the non- proliferation treaty, which a considerable number of countries have signed. But President Carter goes much further in his ideas and suggests that it is undesirable that sensitive technologies associated with the peaceful production of energy in power stations could also be a nuclear threat. No doubt they could be under some extreme circumstances. But I believe that such an important if oblique reference by the President to the enrichment and reprocessing of nuclear fuels, which we are able to do highly successfully at Capenhurst and Windscale, should be of major concern to the United Kingdom and its Government.

My view is that if we and the French gave up doing this work of processing, reprocessing and enrichment, it would be a great incentive to other countries poscessing reactor systems in the Third world, for example to do it themselves. Instead of there being a concentration, as there is generally at the moment, on reprocessing in the advanced Western countries, with our developed facilities and where it is controllable, the end result of Mr. Carter's ideas if applied might be an extension of nuclear processing and the availability of plutonium throughout the world rather than a contraction.

I therefore suggest that in this matter, in spite of the present wave of enthusiasm for a new President of the United States and, incidentally, I suppose for a new British Ambassador—admirable individuals as they may be—we should avoid too quickly saying "Yes" to Mr. Carter without the most careful investigation of all aspects of an admittedly very difficult problem. We should also take this view to Brussels, where again it requires the most careful consideration by the EEC nations.

I think that President Carter's speech waved aside much too easily the question of the general development of nuclear power for energy production. The American utilities are now forced to take a short-term view of nuclear power production because they are short of capital and have difficulty in raising it, and a coal-fired power station, especially with cheap American coal, is more economical and has a lower first cost. The fact that the American utilities are tending at present to turn back to coal is a reflection of their present financial problems rather than of careful choice for the future.

Energy economics have to be taken much more seriously in this country and in the other EEC countries generally than may be the case in the United States, where the fashion has been to throw everything at the target and hope that something sticks. There has been historically a vast, wasteful use of energy resources in the United States. We in this country cannot afford that kind of approach. I will give, perhaps without much comment, the latest Central Electricity Generating Board's figures. They give the nuclear cost of generation in magnox power stations, as 0·69p per kilowatt-hour, coal as 0·97p per kilowatt-hour, and oil as 10·9p per kilowatt-hour. With us nuclear power is the cheapest power.

While I am all for developing renewable sources of energy—another subject that the Select Committee is looking at, particularly the Severn Barrage—nobody can perhaps avoid the inconvenient fact that in Western Europe, once the fossil fuels run out, nuclear fission is the only certain source of energy open to us if we want the massive blocks of power that we must have to maintain our way of life. I have read and heard all the arguments, but I cannot escape that conclusion; I do not think that any expert with a fair reputation dissents from it either. My right hon. Friend, who presided so admirably at the conference at Sunning-dale last weekend, which I had the privilege to attend as Chairman of the Select Committee, will, I am sure, agree that the majority of experts then supported that view. There were those who adopted the more extreme environmentalist point of view and differed, but none of those who have the ultimate responsibility dissented.

We must consider seriously, both in this country and in the EEC, the question of uranium supplies. We have been developing successfully the fast breeder reactor for 20 years. It has not been dreamed up in the last five or 10 years. It was the keystone of British long-term nuclear policy from the beginning. I do not say this in a boastful, national spirit, but British nuclear fast breeder technology is ahead of that of the United States.

I respect my right hon. Friend's caution about the commercial fast breeder reactor, but the need for a Government decision on it becomes more urgent each month. In some ways it is sad to have to listen to the constant pleas of Sir John Hill, who is responsible for this matter and responsible for keeping his teams together, for action by the Ministry. He was promised a decision a year ago but he has not had one. It is now more and more urgent that the questioning should stop and construction be started.

At one time I was concerned about the safety doubts associated with the fast breeder reactor but largely they are now resolved. I am satisfied that the combination of the expert engineers of the Atomic Energy Authority and the Safety Inspectorate can provide full protection for the public and operators.

I must ask my right hon. Friend to make a decision reasonably soon. We should either proceed alone—whatever the Americans say—or in conjuction with the French. We certainly must proceed.

Britain should be taking the lead in Europe on these important energy questions. We are still too inclined—perhaps because of the long-drawn-out controversy about Britain's entry to the EEC—to react to events in the EEC instead of taking the initiative. I can never understand, for instance, why this country, which has some of the most successful thermal reactors in the world, has not yet been able to persuade our European neighbours that the British reactor systems have much to recommend them. I should like to see an argument of that kind deployed in a positive fashion by those who represent us in the energy councils of Europe.

11.19 p.m.

The hon. Member for Bristol, North-East (Mr. Palmer) and others with an interest in this subject will be aware of the gap that is likely to occur before the end of the century. The hon. Member must be aware that General Electric of America is thinking of pulling out of reactors.

I do not know whether the Secretary of State's visit to America was made at the appropriate time. I hope that it was. I hope that he was able to interpret the situation correctly. I was heartened when, in his speech, he appeared to be responding to the forces of supply and demand and talking about commitments for expenditure because of the long lead times. If he was saying that and believed it, I should have thought that he would come up with decisions. The Secretary of State talks a lot but decides little.

If the Minister can give answers to one or two questions, the House will probably be satisfied. I hope that he will not deviate from answering my specific questions.

What type of reactor is the Minister prepared to back now that the SGHWR has been placed on the shelf? Will he give us the size of a viable nuclear programme for the United Kingdom? This would naturally arise from Document R/477/77. Is the Secretary of State interested in developing a reactor that customers abroad will buy? In other words, is he prepared to go for the light water reactors, which several of us have recently seen in Spain? What is the future of the CFR1. The hon. Member for Bristol, North-East has implied that something should be indicated about that. He has read the Flowers Report and he knows what is required in the plutonium economy. One either stores it or one uses it. The CFR1 is one of those reactors in which it can be used.

Since President Carter has made his enunciations on nuclear fuel reprocessing and has indicated that the United States is to abandon it, will the Minister re-emphasise that he is prepared to go ahead with the Windscale functions and have a substantial plant to reprocess oxide fuels, not merely for the United Kingdom AGRs but for any other reactor that may be chosen to help fully to service the Japanese contract when that comes on stream?

Will the Minister also take a decision on whether he is prepared to stand up to environmentalists, who have had such a disruptive effect in Germany and elsewhere?

On a global stance, nuclear energy could provide 21 per cent. of the world's primary energy by 2000 AD. That would be equivalent to 43 million barrels of oil a day, which is probably what the world requires.

There are one or two other matters on which the Minister may wish to give us his views. That is what the country requires. It requires decisions, and not long talks. Is he prepared to argue in Cabinet against discriminating taxes on the production of fuels, which disrupt the energy market? Is he prepared to share North Sea oil with the European Community, provided that member countries pay the market price? What, if any, is his depletion policy?

The mistake of the Secretary of State is this: he is like Canute, sitting by the shores and allowing the tides of time to lap against him. If he only decided the issues that were relevant and if he only came to the correct decisions, he could be classified as being one of the great Secretaries of State of our time—if; but there is a lot in the "if". He has yet to substantiate it. However, I am generous by disposition.

Document R/75/77 is to promote the use of coal for electricity generation, but this will not necessarily assist the producing countries, and particularly our National Coal Board. The United Kingdom produced 122 million tons in 1976. The Federal Republic of Germany produced just under 100 million tons and France produced about 22·4 million tons. But who are the chief importers? They are France and Italy. France imported 16·6 million tons and Italy imported 10·1 million tons. But where did they buy it from? Did they buy it from other Community States? Not a bit of it. It came from the United States and Poland. In 1976, 14½ million tons came from the United States and 15·1 million tons came from Poland.

Why did France and Italy not buy it from their Community partners? They did not do so for the very simple reason that the current average price, delivered to Europe, for steam coal for power stations from Poland, the United States, Australia, South Africa and India is $30 to $33 a ton. That compares with an Immingham price for steam coal delivered to Europe of about £30 a ton—in other words, about 1·7 times as high as the price for coal from other countries. [Interruption.] It may be said that it is coal extracted in a certain way with certain advantages, but it is deliverable and the Community is not against fair trade in this commodity. Therefore, I do not see that we shall receive any alleviation in this respect.

Will the hon. Gentleman give us the German and French market figures so as to be absolutely fair?

I cannot give those figures. I am not talking about the German and French figures but about the Polish and United States figures. They are the countries that sell coal cheaply. I recognise that in Germany Ruhr coal faces a difficult situation. I am not comparing National Coal Board coal with Ruhr coal; I am comparing the figures behind the Iron Curtain.

The Secretary of State referred to R/478/77 on Community coal deliveries and coal obtained from third countries. This is purely data collecting. There are no teeth in it and it is not intended to interfere drastically with the market.

I appreciate that time is marching on but I shall quickly run through the points that I have in mind. Grants of 30 per cent. of the extra capital cost of building, converting and modernising coal power stations is implicit in R/75/77, but the funds are available to reduce oil in favour of coal secured from Community and third countries for use in power stations. That must be so, as it would be catastrophic for the Italian economy if otherwise.

There is little scope remaining to aid United Kingdom power stations, for coal accounts for over 70 per cent. of the fuel-burn in CEGB stations in 1976. There is little economic sense in increasing that ration further without making the board a subsidiary of the National Coal Board.

For the National Coal Board it is now a question of supply due to lack of availability. There is little evidence available to convince the fair-minded analyst that the Board's targets will be accomplished.

The oil-burn, now dramatically reduced, has reached critical limits for the CEGB. Oil consumption at power stations fell from 23·5 million tons oil equivalent in 1972–73 to about 11 million tons oil equivalent in the current financial year. During the same period coal has risen from 63 million tons to 70 million tons. The crucial point between coal and oil is between 10 and 12 million tons oil equivalent, and that point has now been reached. At least 4·5 million tons is sacrosanct to meet winter electricity demand.

The directive comes from the Community and it will assist Western Ger- many, which burns a great deal of natural gas in its power stations. It should not do that, but it will not and cannot aid the United Kingdom because the policy conflicts with the uranium fuelling of post-1977 stations if the United Kingdom is to have an intelligible programme in the years ahead.

Further conversions would not provide a solution for the additional supplies of fuel oil that would flood the market, particularly when its market continues to be eroded by natural gas.

The elimination of the remaining limited number of highly efficient oil-powered stations built several years ago at non-inflated prices through their replacement with new coal-fired stations built at highly inflated capital costs would do nothing to aid electricity consumers and would lead only to a rapid closure of old plant with an overall reduction in coal consumption.

I hope that the right hon. Gentleman will bear that in mind if he is running for economies. Further conversions would make nonsense of the Government's declared policy of refining two-thirds of North Sea crude oil, which is an indigenous fuel refined in the United Kingdom, if less crude would be run through inability of the industry fully to market in competitive conditions a product which comprises the largest slice of the barrel.

I suggest to the right hon. Gentleman an interesting little comparison. Post-Budget prices per delivery therm for heavy fuel oil works out at 12·3p to 12·8p. Coal averages 9p and marginal coal is 11·3p to 12·0p. There seems to be a considerable margin between the two.

Perhaps the right hon. Gentleman will take some interest in this little calculation. The CEGB's esimated fuel oil consumption for 1977 is 7 million tons. With tax at 2·5p a gallon or £5·73 a ton, the Government are imposing a levy on the CEGB of £40 million. That is roughly what the Government want to pay the Board for the Drax B power station. In other words, the Secretary of State is taking away with one hand and giving back with the other.

Before we study this European directive a little more carefully we should urge the Secretary of State to bear in mind that what he is doing is not in the interests of the coal industry. The right hon. Gentleman is simply picking its pockets in order to ensure that its expenditure is recouped in another way.

11.31 p.m.

The hon. Member for Bedford (Mr. Skeet) ranged widely in his speech, but at least it was lightened by a note of rather patronising generosity when he referred to my right hon. Friend the Secretary of State. The hon. Gentleman seems to fail to understand the difference between coking coal and steam-raising coal. I thought that the figures he gave applied in one case to the first sort and in another to the second.

His speech would have been useful in a much wider debate when we could deal with the subject of energy in broader terms and in greater detail. My right hon. Friend said that we shall have such a debate, and I hope that then the hon. Member for Bridgwater (Mr. King), who is not now in the Chamber, will be satisfied. It was clear that tonight he was irritated by having to restrict himself to documents, and he gave very little sign of having read them.

Document R/479/77, which is concerned with conservation, is welcome, but I utter a cautionary note. Bureaucracies everywhere seem to be obsessed by the work of committees and there is a great deal about expert committees in the document. I believe that the increased energy price has had rather more effect on energy saving than the work of all the expert advisory committees here and in Europe.

So high have the price increases inevitably been that I am surprised that energy saving has not been even more marked. Nevertheless, one welcomes the concern for saving, because it is important. Our resources are finite, and we should not waste them. I am glad therefore for this concern and that the Government have recently announced a further sum of money to support and finance the energy saving campaign. We must wish the campaign well.

If we are to see further progress in energy saving it might be a good idea, however, for the Government to give more serious consideration to further helpful measures which need to be taken, and I refer to the need to encourage and sup- port home insulation. The provision of flues in new homes would not go amiss. It would give people a choice and might ensure that energy use was properly balanced.

Just as support for insulation and so on would not go amiss, nor would a better-informed and broader public debate. Unfortunately, too much public debate today seems to be concerned with either the dangers of nuclear power or the cost of energy. If there were such a debate I believe that my right hon. Friend's comments on Document R/684/77 in relation to refinery policy would certainly meet with general approval in this country. It is noticeable that the Conservatives have not in any way moved away from the acceptance of that policy tonight.

The documents before us are rather more realistic than the EEC energy documents that we considered a couple of years ago. I recall the debate in which several of us on this side were critical because it seemed at the time that Europe was becoming prepared to accept a gross over-reliance on nuclear power. We warned that it still did not overcome the need to achieve public acceptance and also that it had not properly taken into account the vast capital expenditure that the rather extravagant proposals of two years before would involve.

I shall not suggest that we should not go ahead with nuclear technology. I think it is essential to go ahead. At the same time, Europe must proceed not merely with caution in regard to technology, and certainly not merely with caution in regard to non-European technology, but with caution in regard to the expenditure which will be involved, particularly if it is expenditure on maintaining excessive reliance on current nuclear technology.

I am particularly pleased that one of the ways in which European policy has changed is that there is a clear acceptance, particularly in Document No. 478/77, that a substantial coal industry should be retained. Current European production at about 220 million tonnes is less than the target that should be achieved, and I therefore believe that measures to promote the achievement of that target are necessary. The United Kingdom could, and should, be producing over half the European production in 1985, albeit that that production will remain at the modest level of 250 million tonnes.

Document No. 478/77 mentions the very high level of stocks that exist today. These stocks offer a persistent disincentive to production. The Community seems to be more aware than some Conservative Members that if miners know that there are large stocks of coal they have anxiety whether they should add to those stocks by extra enthusiasm. At Question Time yesterday Conservative Members showed that they could not comprehend that point.

One way in which the stocks could be reduced is by ensuring that there is greater use of European-produced coal and less reliance on imports. The proposal to monitor is welcome, though it may well be singularly ineffective unless it is accompanied by a much firmer arrangement to discourage imports.

One reason for the high level of imports is, perhaps, that the spot market price for coal on the world market is very low because of the recession. Indeed, that is the principal reason. The price has been low because some countries require European currencies and are prepared to sell coal to Europe at less than the cost of production.

We should not allow that policy to be sustained. It is in Europe's interests to ensure that the production of coal within the member States is encouraged. That should be ensured, either by the application of wit and common sense—that seems to be needed—or, if that fails, by firmer policies than have been announced so far.

I doubt whether the proposals in Document No. 75/77 regarding coal firing will have a massive effect, but they are to be welcomed as a sign that Europe is accepting reality. Perhaps the greatest helpfulness of these proposals is that they demonstrate an acceptance of a cause some of us have been arguing for a long time and they may assist by engendering confidence in that sector of industry that is responsible for power station construction, which certainly needs an injection of confidence.

The greatest help of all would come from a move away from the recessionary conditions which still affect the world. It is to be hoped that the latest OECD fore-case will prove to be inaccurate. However, I will not spend further time on that aspect. We certainly need an energy debate in which we can express our thoughts at much greater length than has been possible in recent months.

Europe will not achieve the required level of production of coal unless men are available who are prepared to mine it. We need to spell out our attitude to the mining industry more vigorously than we have of late. Someone said recently that this Labour Government have done very little for the miners. It is time that Tory Members were a trifle more honest and that Labour Members were more vigorous in presenting the realities. The Department of Energy and hon. Members need to spell out the facts—namely, that this Labour Government have done a great deal to secure a future for British coalfields. Anyone who recalls the folly that we inherited in 1974 and the hardship and uncertainty that prevailed then will acknowledge the tremendous transformation that has been brought about. We should ensure that the people of the coalfields realise the steps that have been taken since then. If they did they would not complain as much as some people have been complaining about the record of the Government in establishing tripartite considerations, in developing compensation for disease and in developing and introducing the earlier retirement which was spurned by the previous Government. [Interruption.] Conservative Members are now showing that they have less sympathy with the miners than they claimed before the Ashfield and South Yorkshire County Council elections recently.

The pits in my constituency at the time when I was selected Parliamentary candidate were in grave uncertainty. Several collieries were being spoken of as at risk of closure. Every one of the pits was rumoured as likely to close. But today vast sums of money have been invested to ensure that the vast reserves of coal in those pits can be extracted.

I believe that the miners have been hit by the incomes policy. They led, but did not gain from, the wage inflation of 1974. Wage rates in the pits are lower than many people represented by Conservative Members imagine. The fact remains that if we are to ensure that Europe gets the coal which it needs we have to get our wage and industrial policies right with regard to the coal industry.

In so far as these documents make a contribution to this being achieved, they are welcome, but a much more vigorous policy needs to be announced by the Department during the next few months.

11.42 p.m.

It does not help the standing of Parliament that we should have only two hours in which to debate this most important matter of EEC energy strategy and these documents in particular. Bearing in mind what little opportunity we have had in the past two years to debate energy strategy in this country, we are certainly entitled to ask the Secretary of State when, in addition to the endless conferences, meetings and discussions that he has outside Parliament, he will allow hon. Members to debate these matters as well.

I want to say a few words about these documents in particular and about energy conservation strategy indicated in the EEC proposals. There has certainly been no lack of weighty forecasts recently about the future prospects for world energy resources. We have had the EEC and OECD reports. We have had President Carter's CIA reports. There have been any number of weighty presentations, with different time scales about when we shall be in trouble.

What is common between all these expert assessments and forecasts on the long-term energy scheme is that there is no shortage of energy. There is no shortage now, nor does there need to be in the future. There is plenty of energy. That comes out clearly in all these forecasts. It is equally clear that there will be a shortage of energy unless we start doing something about it. Therefore, the solution to the problem is in our own hands. It is up to us to make the right policy decisions.

What also comes out of these forecasts, whether they are pessimistic or optimistic, is that the most vital factor is time. Time is the most valuable asset that we have in finding solutions to energy strategy. Yet it is the most crucial and intractable factor—the time scale—that is being wasted. We are wasting the most valuable asset in the solution of our enegy policies. We must get the timing right if we are to prevent an energy gap.

Of course one can understand the Government's deferring important decisions because they are not sure which nuclear strategy they should adopt, if they should adopt one at all, and they are not sure which alternative resources should be developed. One can understand why they have been slow to take decisions, but one cannot understand or justify deferring decision-taking in the one sector that can give us that longer option in which to get the rest of the strategy right—that is, to invest in a more rational use of energy in the meantime in order to get a longer lead time in which technology can help us to get the right solution in the most economical way.

The EEC energy document is most relevant to the problem today, in that it regrets that there has been too little progress towards the achievement of the initial target of a 15 per cent. saving in energy by 1985. Why has there been so little progress? In a nutshell, it is because there is no coherent strategy either in the United Kingdom or in Europe.

I quote from the document:
"Energy saving considerations have so far played little part in the formation of general economic policy, fiscal, industrial, transport and environment policy."
That is absolutely true. We have provided some stimulus for the price mechanism and this is helping, but we have not given the right incentives to allow the price mechanism to produce the solutions.

When we see the Secretary of State's comment on the document we feel that it expresses far too complacent an attitude by the Government. The Secretary of State previously said that the document raised no new policy issues, and he said that again in his opening remarks tonight. I believe that it does raise new issues. It raises the issue whether the Government have implemented conservation policies. We know that we have aims, objectives and hopes, but we also know that we have not got policies.

We should not be misled into believing that the "Save It" promotion and education campaign, with one or two other little measures thrown in, represents an energy conservation policy. It does not. There is a great deal more to be done to provide the right incentives and a little bit of a carrot to allow the price mechanism to begin to operate.

There are areas in which we are lagging far behind the satisfactory progress being made in Europe. We are bottom of the European league in the generation of electricity with combined heat and power, and we are doing nothing about it. We are bottom of the league in providing real incentives for insulation, and although we are far behind the rest of Europe we are doing nothing about it. Those are two specific areas in which criticisms by the EEC are fully justified.

If the conservation programme fails and does not get enough impetus and initiative from the Government, we shall also fail to provide the new energy resources in the long term. The two are inter-related, and we cannot separate them.

I am listening carefully to what the hon. Member is saying about our lagging behind and about conservation generally. He clearly has not read comparisons that have been published by international agencies, which give this country a good report. As for his point about combined heat and power, is he not aware of Energy Paper No. 20, published by the Department of Energy, and the fact that we are looking much more closely into this matter? Since it is a historical situation that he has described he can hardly blame us. This has built up over a number of years.

The Under-Secretary is taking advantage of me because he knows that my time is up. He should understand that I have not only read Energy Paper No. 20; I have studied it in great detail, together with many other papers. I know that this country is bottom of the European league in combined heat and power production. We are the only nationalised utility in Europe that does not produce any combined heat and power, while the thermal efficiency of our electricity generating system overall is about the lowest in Europe. In the other European countries much more combined heat and power is produced by private sector industry. The incentives for producing combined heat and power here are not in existence. I cannot develop that point because I do not have the time.

I emphasise the point that if the energy conservation programme does not get under way we shall not get the right stimulus for the production of substitute energy, for new sources of supply and for the proper competitive climate in which the price mechanism can allow new energy resources to develop. These factors are closely inter-related. It is vital that we make a greater effort to provide the investment that can be cost-effective in producing a more rational use of our energy. For those reasons I very much welcome the EEC documents and I hope that the Government will take note of them and begin to think a little more about this problem.

11.52 p.m.

One thing that the debate has proved conclusively is that there has not been nearly enough time for everyone who wished to take part in it to do so. I was glad that a number of speakers, including the Secretary of State, mentioned that we shall be having a full energy debate in the not-too-distant future. We look forward to this, so that we can outline our views on the short- and long-term aspects of energy policy and strategy.

My hon. Friend the Member for Bridgwater (Mr. King) dealt adequately with the performance of the Secretary of State and his handling of these documents. There seems to be a tendency for a great deal of talk to take place in committees, commissions or whatever, but a decided lack of decision-making. This view is held both outside and inside the House. I hope that the time is not too far distant when the right hon. Gentleman will take some positive decisions and stop putting everything off in favour of wide-ranging public discussions. They are all very well, but they can never be a substitute for decision-making.

I was sorry that the hon. Member for Rother Valley (Mr. Hardy) introduced a slightly disagreeable note into the debate, particularly when he remarked on the fact that he considered that my hon. Friend the Member for Bridgwater had not studied the documents in detail. I should point out that it was only because of my hon. Friend's representations that we have had two hours for this debate. Without his representations we should have had one and a half hours, and the hon. Member for Rother Valley might not have been able to make his remarks.

The hon. Member was worried about the future of miners in his constituency. I suggest that when Clause 11 of the Coal Industry Bill is discussed on Report he should carefully consider whether to support the proposal that the National Coal Board should be able to operate overseas. The jobs of miners in his constituency will be put at risk if the NCB is diverted from its primary task, which is the production of coal.

I turn to the document dealing with oil-refining policy. I entirely agree with what the Secretary of State said about the document. Our requirements as an oil-producing nation to some extent differ from those of our Community partners. Therefore, it is only right that although we must, of course, be good Europeans we must also remember that our own interests must not be neglected. I believe in being good Europeans, in the same way as the French. They never forget that the requirements of their own country are every bit as important as those of their neighbours.

I must say a word about nuclear policy, because that has been by far the most controversial matter mentioned tonight. It is not the first time that I have found myself in agreement with much of what was said by the Secretary of State, and that was amply confirmed by my hon. Friend the Member for Bedford (Mr. Skeet). We must give serious consideration to the future of the nuclear industry. I make a prediction now that we shall proceed with the fast breeder reactor, despite what the conservationists say—with the greatest respect to my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane), with whom I do not always agree—because there is simply no alternative for filling the gap that we shall face in the 1990s. There is no doubt that the West may face a major new energy crisis within the next decade.

I doubt whether many of the suggestions and predictions that have been made by President Carter will see the light of day because, as one well-known writer has already said, his speeches contain "a Bill in every line". That is pretty accurate. He will find it extremely difficult to obtain every one of those Bills. While I have the greatest respect for his moral integrity and his wish to do the world a service, I am afraid that I have a slight reservation about his remarks because the commerciality of certain things in America is involved and American enthusiasm could influence matters.

I also want to speak about the documents that deal with the coal industry. We obviously agree with the sentiment expressed in them, but a number of questions arise that the Minister may be able to clarify when he replies. We accept the principle behind the grants that are to be made, but how will this operate in conjunction with the terms of the present Coal Industry Bill? Will the Government be willing to accept such grants from the EEC, and do the Government consider that the amount that we shall have to contribute—which the Secretary of State said would be about £70 million—to the project will lead to a reasonable return for that money? What consideration have the Government given to nuclear power as a competitor of the coal industry? Perhaps the Minister will reply to those questions.

I know that the Minister will be pushed to answer all the points that have been raised by hon. Members tonight, but I should like him to say a word about the important subject that was raised by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) in connection with conservation. My hon Friend has made a particular study of this and I know that the whole House respects the amount of research that he has put into it. There is no doubt that what he said about the "Save It" campaign was correct. The cost involved has not been fully rewarded by success, and some of the more recent bungling of which we have read has given cause for concern. I am sure that the Minister will do all he can to ensure that detailed policy on the "Save It" campaign is handled with a little more care.

I promised to conclude at midnight to give the Minister of State 13 minutes to reply. I hope that he will respond by answering my questions.

12 midnight.

I am obliged to the hon. Member for Ross and Cromarty (Mr. Gray), who has, as usual, done a good job. I agree that two hours is inadequate for a debate on energy, but it is two hours of Government time and it is two hours more than the Opposition have provided in this Session.

Considering the indignation of the speech of the Opposition spokesman, the hon. Member for Bridgwater (Mr. King), it is remarkable that we have not had a full Supply Day on energy. Judging from the hon. Gentleman's speech, it would be worth having a full day's debate because he has misunderstood not only what has happened in the Energy Council—over which my right hon. Friend currently presides—but what will happen at the next Council meeting.

All hon. Members have welcomed the papers and there have been some most able speeches, even in this short debate. The hon. Member for Bridgwater was the only one to spoil the debate. We are going to discuss protection of investment at the next Council meeting. The hon. Member for Bridgwater will remember the so-called minimum safeguard price and why, in our fight to get that, we took a certain attitude on Euratom loans. He will remember that his hon. Friend the Member for Cheadle (Mr. Normanton) said last year:
"Has he considered a trade-off to achieve what the Government have declared to be their policy—to see the siting of JT at Culham?"—[Official Report, 15th November 1976; Vol. 919, c. 1043.]
Trade-offs are a well-known practice in the Community. The hon. Member for Ross and Cromarty, who apparently has more sense than has the hon. Member for Bridgwater, knows that this is how the Community goes about its business. Those of us who are strongly for Europe may criticise it and say that it is not right, but it is a reality of Europe and the world. Various nations pursue their legitimate interests through so-called trade-offs. I do not like them, but I remind Opposition Members that the word "trade-off" was used by an Opposition spokesman last year.

We unfroze our position on Euratom loans, and that significant act was appreciated by our collegues in the Council. We have protection of investment on the agenda. Our French friends and other colleagues have accepted the principle of a minimum selling price as worthy of discussion. That is important for this country. Even if, by some mischance, the hon. Member for Bridgwater were put in charge of the Department of Energy, I do not think that he would abandon the efforts to get the principle of MSP accepted.

In the Council we shall also have full discussion on coal policy. No one has criticised the propositions in the Commissioners' papers. All the colleagues endorsed them. The hon. Gentleman should remember what we did at the last Council meeting. At the next meeting, we shall also be discussing conservation—largely because of the presidential influence.

Everyone knows that a good president can arrange discussions, and conservation is on the agenda for the next meeting. In addition, the British have achieved an agreement to reconsider the papers submitted on refinery policy.

These are the big issues that we shall be discussing at the Council. It is incredible that the hon. Member for Bridgwater should have launched an attack on the Secretary of State. My right hon. Friend has not been renowned in this country for his advocacy of European union but no one can gainsay that he has been a most enthusiastic president of the Council.

My right hon. Friend was the first president to visit all his colleagues, the first to discuss the papers, the first to arrange that matters might be discussed in public at certain sessions, the first to try to bring the agenda together, and the first national representative to make such gestures of a community spirit at the first meeting.

I find it extraordinary and breathtaking to hear such a speech as was made by the hon. Member for Bridgwater about my right hon. Friend. Indeed, the hon. Gentleman went so far as to say that if he had anything to do with the matter JET would go to Culham. That is not what we heard before. The official Opposition have been singularly inept in supporting the British Government.

It is my opinion that the hon. Member for Bedford (Mr. Skeet) is sadly misused by the Conservative Party. He should be on the Front Bench. If he were, we would probably get more support for these matters. Unfortunately, he is not on the Opposition Front Bench. That is not my fault.

The fact is that other Opposition Members who occupy singularly influential positions—for example, the hon. Member for Cheadle—make these speeches in the European Parliament on behalf of the Conservative Party. I refer to the Official Report of 16th March 1976, col. 1274. I shall not read the disgraceful words. There was no support for the Government in trying to get JET sited at Culham. On the contrary, selling the pass, letting it go to Ispra, made Ministers' lives difficult when they appeared at the Council to argue the case.

All our gestures on coking coal, Euratom loans, and so on, are obfuscated by statements of the kind made by Opposition Members. I appeal to them to realise that they are listened to just as much as we are. If there is a division of opinion in a country, it is used against us. I suggest that, far from attacking my right hon. Friend, however justified the hon. Member for Bridgwater may feel on certain occasions, we should have some unity when discussing European policy when British interests are at stake.

I think that the Minister slightly misquoted what I said about Culham. Can he cite a single instance when in this House my right hon. and hon. Friends have not given full support to the siting of JET at Culham?

I have just referred to one—16th March this year, preceding the meeting of the Council. That is not to be disregarded. The hon. Gentleman said that there were stories in Europe. I am reminded of the remark "If you keep your ear close to the ground you will inevitably get it filled full of dirt". The hon. Gentleman has listened to stories. Where does he get them from? He gets them from his colleagues, naturally, just as we get information from our colleagues in the European Parliament.

I am sorry that the debate has proceeded in this way. It was because the hon. Member for Bridgwater went on attacking my right hon. Friend. If he wants to make a real case, I suggest that he finds Opposition time to try to make it. But that will not happen. I shall get on to the real business. I was provoked. I do not think that anyone in my position could have listened to that speech and left it unanswered.

My hon. Friend the Member for Bristol. North-East (Mr. Palmer) was more than generous when he said that Conservative Ministers would behave in the same way as we are behaving. I begin to wonder. I hope that the Opposition will make it abundantly clear, in time for the next Council meeting, that there is a definite view in all sections of the House that we deserve to have JET sited at Culham. Inevitably, that development will be of great importance to Europe and to our children in future. It is important that Great Britain should be in that kind of business and should take a leading part in it. I hope that we can get absolute amity and unity on that matter. I am glad that the hon. Member for Bridgwater is now conceding that matter.

My right hon. Friend is anxious that we should go ahead with immediate decisions on nuclear energy matters which concern us now. The Government cannot make such decisions without public confidence. Public confidence can only be assured if we as Ministers and the House of Commons are willing to wait for the report of the Nuclear Inspecorate. That report is not due for another month. It would be wrong to abuse my right hon. Friend for not making a decision unless hon. Members were willing to say that they did not want to hear what the Nuclear Inspectorate had to say. If there is a hiatus after that, by all means let them attack my right hon. Friend, but I doubt that there will be.

I shall not embark on comments about the predictions of the hon. Member for Ross and Cromarty about the fast breeder reactor or anything else. It would be foolish of any Minister to do so. We are concerned about the decisions, and we hope that these decisions will be taken promptly after we have the advice of the Nuclear Inspectorate.

Will the right hon. Gentleman clarify whether he is speaking about the report on the social and political implications of an extended nuclear programme, and not just on the safety aspect? Will the report be placed in the Library?

Yes. I think that the hon. Gentleman will find the Flowers Report, which plays a large part in our thought and judgments, in the Library.

Reference has been made to an interesting one-day seminar to which we invited Conservative Members and Members of other parties. This was referred to by my hon. Friend the Member for Bristol, North-East. There was a strong representation at the conference. Sir Brian Flowers was present and members of the learned societies and all the industries concerned were there.

Where was the hon. Member for Bridgwater (Mr. King)?

It was regrettable that the hon. Gentleman could not be there, but I am sure that his hon. Friend will have reported to him what went on at the conference.

There will be a response from the Government to that Royal Commission report. That is in addition to the reference that I made to the Nuclear Inspectorate's report. It would be foolish of any Government to make a decision on this—I know that hon. Members are aware of my personal views on the matter—without the public being confident that we had taken every factor into consideration. That is only prudent.

The intervention of the Secretary of State's PPS, the hon. Member for Luton, West (Mr. Sedgemore), implied that I was not willing to attend the seminar. I appreciated the invitation and would have been more than willing to attend. If the conference had as much importance as the right hon. Gentleman claimed to attach to it, it is a pity that hon. Members were not given more than 10 days' notice.

I suggest that we should let peace break out now. It is important that we should try to keep as much in harmony as we can on these vital decisions. It would be awful if we started to quarrel on a party basis about fundamental issues which have no doctrinaire content. I am sorry that the hon. Member for Bridgwater did not receive enough notice. Perhaps next time all will be well.

I wish to make one reference to conservation. My right hon. Friend referred to the range being at least 2 per cent. of demand, going up, as the Energy Paper put it, to 10 per cent. of demand. We have concluded—indeed, we told the Council—

It being two hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question pursuant to Standing Order No. 3 ( Exempted Business).

Question agreed to.


That this House takes note of Commission Documents Nos. R/75/77 (rev 1), R/477/77, R/478/77, R/479/77 and R/684/77 on EEC Energy Policy.