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Commons Chamber

Volume 979: debated on Monday 25 February 1980

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House Of Commons

Monday 25 February 1980

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Oral Answers To Questions

Industry

Tuc

1.

asked the Secretary of State for Industry when next he expects to meet leaders of the Trades Union Congress.

At the National Economic Development Council on 5 March.

When the right hon. Gentleman does meet them, I hope that he will be able to inform them that he has seen the folly of running the industrial strategy on a basis that even his own colleagues are describing as out-of-date 0-level economics. I hope that he will be able to say to the TUC that he is now willing to approach these matters afresh and to have an industrial strategy based on co-operation and Government action rather than covert confrontation and inaction.

Order. When the hon. Member for Huddersfield, East (Mr. Sheerman) said "I hope" I assumed that he was really saying "Will the Minister".

When my right hon Friend next meets the leaders of the TUC, will he point out to them the utterly lunatic and self-defeating nature of the proposed one-day general strike?

I hope that such a one-day general strike will not be thought to have any value and, therefore, will not occur.

Does the right hon. Gentleman, as Secretary of State for Industry, accept any responsibility whatever for maintaining a steel industry and an industrial base upon which Britain depends, and has depended historically, in peace and war? Will he indicate clearly whether he thinks that that is his responsibility, or whether he has totally abdicated responsibility for the security of our industry?

I do not think it is my responsibility to recommend to my colleagues that taxpayers should be asked to pay money towards higher earnings for steel workers who are in a position to earn more for themselves. It is in the interests of the steel workers that the industry should get back to work as quickly as possible.

Steel Industry (Productivity)

2.

asked the Secretary of State for Industry what is the current level of productivity in the British steel industry.

The latest available information indicates that productivity in the first 10 months of 1979 remained low compared with other major European countries.

I am grateful to my hon. Friend for that information. As the British Steel Corporation has made it clear that by improving productivity steel workers may earn substantial pay increases, does my hon. Friend not think that it is now time, as the steel strike enters its third month, for the BSC's offer to be put to steel workers in a ballot?

My hon. Friend is right to draw the attention of the House to the crucial argument about productivity. The issue of a ballot is for the BSC management to decide in consultation with the trade unions. We would welcome a move in that direction.

Does the hon. Gentleman appreciate that British steel workers are already the cheapest in Europe? When heavy redundancies are proposed in areas such as South Wales and other steel-making areas, the Government must appreciate that steel workers and the communities in which they live are not prepared to go back to the 1930s. Is that where the Secretary of State is trying to drive them?

The Government are fully aware of the issues that the hon. Gentleman raises. It is because of that that we have recently provided £48 million, which we hope will help to overcome the short-term problems. However, that will not overcome the problems of getting the industry right, and that process must go ahead.

Is my hon. Friend aware that demand for a ballot is growing in the public sector, reinforced by what has happened in the private sector, and that steel workers would like the opportunity of making plain their views? However much they may admire the moderation of Mr. Sirs, is my hon. Friend aware that they are not impressed by his competence?

I note what my hon. Friend says. This is an issue that must be settled between the management and the trade unions. The move towards a ballot is one that I am sure the House will wish to support.

Since the Minister is making comparisons with our European competitors, will he take two things into account? The first is that the sector working party which his right hon. Friend the Secretary of State commended said there was no real basis for a comparison of productivity with European competitors. Secondly, our European competitors are receiving subsidies, for example, on coking coal and also from the contributions that Britain has made to the European Coal and Steel Community which amount to over £60 million more than we have received from it.

I note the right hon. Gentleman's comments about what we have received from the Community. The Government will seek every opportunity to take advantage of whatever is made available and studies are in hand on that matter. On the question of comparisons, he should remember that the key statistic which was agreed by both the management and trade unions which were taking part in the exercise to which he refers showed that in man hours taken to produce one tonne of steel, the figure for BSC, regretfully, was between 70 per cent. and 100 per cent. greater than that of our major European competitors.

But that was only one factor out of many, as the hon. Gentleman knows. What was said at that time, as the hon. Gentleman also well knows, was that labour productivity in any event was only one out of a number of factors to be taken into consideration. However, I am not talking—[HON. MEMBERS: "Question".] I am not asking about the justice of contributions I am referring to the fact that there are subsidies to our competitors which affect our productivity. What will he and his colleagues do about that?

The right hon. Gentleman tends to flog a dead horse on this matter. The German industry has to pay for coking coal at world prices. The balance by which industries are supported differs from one country to another and no one can deny that our steel industry has been given massive support over recent years.

Inner Cities

5.

asked the Secretary of State for Industry what contribution the Government's measures to encourage small businesses will make to the economic revival of inner cities.

The Government are pursuing a number of policies designed to help small firms, wherever they may be located. Special assistance is available in certain inner city areas through local authorities under the urban programme.

I am grateful to my hon. Friend for that reply. Will he tell the House what has happened to the proposal for enterprise zones in which bureaucracy and red tape were to be cut to a minimum and the enterprising people were to be able to devote all their energies to being enterprising?

The matter of specific enterprise zones is still under study. So far as the general concept is concerned, we wish to convert the whole country into one.

Has the hon. Gentleman examined the success of the Industrial Co-ownership Organisation and the Cooperative Development Agency? Is there anything that he can do to help his hon. Friend the Member for Ealing, Acton (Sir G. Young) and myself, who are trying to recreate the inner city industrial area of Park Roy al in my constituency and his by encouraging small business development on the principle of those two bodies?

The Government are continuing to give the co-operative development authority assistance. If the hon. Gentleman has a specific constituency interest, I should be happy to hear from him on it.

In recognition of the importance of small businesses in the regeneration of our inner city areas, is my hon. Friend prepared to consult with his colleagues in the Department of the Environment to see if it is possible to abolish the rate charges on empty properties in these areas? They are a significant hindrance to attracting business in those areas.

l shall draw my hon. Friend's suggestion to the attention of my colleagues in the Department of the Environment.

Are not all these matters peripheral to the real difficulties that are facing small businesses, which are highly over-valued sterling, a minimum lending rate of 17 per cent. and VAT at 15 per cent.—all conscious decisions of this Government?

The level of sterling is not a conscious decision of the Government but is a matter of the operation of market forces. The MLR is a consequence of the over-high Government spending programmes which we inherited from our predecessors.

National Girobank

6.

asked the Secretary of State for Industry if he will meet the unions and representatives of those employed in Giro, in order to discuss Giro's future role in the reorganisation of the Post Office.

Ministers in the Department of Industry have already had consultations with the unions concerned, including those in the National Girobank, about our proposals for the reorganisation of the Post Office. My right hon. Friend expects that further consultations will take place as appropriate.

Will the Minister ask his right hon. Friend the Secretary of State to visit Bootle and Giro to see for himself what is happening there to allay some of the fears and anxieties of the work force? That work force wish to know where they will be placed in the new reorganised Post Office corporation—whether with the telecommunications section or the Post Office section. They also wish to know whether the present status of a bank will be maintained and whether the privileges in legislation that were given in 1977—[HoN. MEMBERS: "Too long."] This is very important to the workers at Giro. They also want to know whether future expansion of Giro will take place on Merseyside.

I am sure that my right hon. Friend will have noted the invitation to visit Bootle. In September, we announced that the Post Office would be split into two corporations, one for telecommunications and one for post and Girobank. That position remains unchanged. Provided that Girobank continues to compete on equal terms with those offering equivalent facilities, there is no reason to doubt its future.

Will my hon. Friend bear in mind the substantial question about the desirability of loading Girobank into the Post Office with all the appalling consequences upon industrial relations which the Post Office will face? Is there not something to be said for the obvious solution of hiving off Girobank to the private sector?

I note what my hon. Friend says. At the present time, the relationship between Girobank and the Post Office is interlaced within the Post Office counter service facility.

Will the Minister look into the Government banking services and see if more efficient use can be made of Girobank by Government Departments? For instance, will he look at how often Government Departments put out their banking business to tender, with particular reference to the role of the Paymaster General's office? Will he see if some rationalisation could be of benefit both to Girobank and Government Departments?

I believe that I have heard the hon. Gentleman on this subject before. It is up to Girobank to compete on equal terms with others who provide similar facilities.

Manufacturing Industry

7.

asked the Secretary of State for Industry what further measures he will introduce to increase the rate of investment in manufacturing industry.

The Government will maintain their policy of establishing the right economic framework for investment and enterprise.

Is the Minister aware that according to the latest CBI industrial trend survey, 42 per cent. of firms said that they would be spending less in the next 12 months on investment on new plant and machinery than in the last 12 months? What will the Minister do about that? When will the results of the so-called incentives policy come through to fruition?

We believe that the results are coming through already. The hon. Gentleman and the House know that we are facing a period of world-wide economic stagnation. One way to attack that, as my hon. Friend the Under-Secretary said in answer to a previous question, is to try to get down the public sector demands on the economy so that there are more funds available for private investment, thereby reducing interest rates, which are another difficulty.

Does my hon. Friend agree that it is not just levels of investment that are important—indeed, firms can suffer from too much investment as BSC has shown over the last 15 years—but many other matters should be taken into account, such as levels of manning and productivity?

My hon. Friend is quite right. The first priority is to use the investment properly. Secondly, we must ensure that there is a profitable return on that investment and any future investment.

With reference to investment in the public sector, will the Minister explain, in view of his assurances during the last debate on the ship building industry, why the national environmental research council's order is being placed abroad and not with British Shipbuilders?

The hon. Gentleman should put down a separate question on that point. It does not arise on the question on the order paper.

Is it not also a question of the under-use of existing manufacturing capacity? Would it not help if manufacturers had a reasonable prospect in the forthcoming Budget of a better return on investment?

It is true that the present return on investment is disastrously low in real terms. One of the features of recent years has been that the profits that business has retained—or that it has been allowed to retain—have been too low.

Given the real return on capital, the prohibitively high interest rates and the reduction in public expenditure, where does the Minister expect that new investment to come from? Bearing in mind the consequences of Government policy in areas such as South Wales, when will the Government reassess regional development policies in those areas?

My hon. Friend has already mentioned that the Government are prepared to put £48 million into South Wales in order to cope with some of the consequences of running down the steel industry. Otherwise, the money has to come from resources that are available to the economy as a whole. That is why we place such emphasis on reducing the demands of the public sector on those resources.

Post Office

8.

asked the Secretary of State for Industry when he expects to complete his review of the Post Office's mail service monopoly powers.

My right hon Friend has received the reports which he asked for by the end of last year and is considering them. He will make an announcement as soon as possible.

Will my hon. Friend the Minister comment on his basic willingness to open the post and telephone services of the present monopoly to competition from private enterprise? Will he consider that proposal in the light of the Rayner recommendations and the special problems that sub-post offices may face?

As regards telecommunications, my right hon. Friend has made the Government's position clear in principle. We hope to liberalise the monopoly. We have an open mind about the postal side. That is the purpose of the reports that we have asked for. I assure my hon. Friend that the postal monopoly is not inviolate.

I do not expect any change in the monopoly to affect the position of the sub-post office network. If the network is likely to be affected, we shall take that consideration into account.

Does not the Minister understand that there is a connection between the derogation of the monopoly in the London area and the fate of post offices in other parts of the country? Conservative Members should understand that. If the hon. Gentleman cannot understand that, does he realise that many of those from sub-post offices who came to lobby the House last Wednesday were not reassured by his remarks during the debate on the previous evening?

This question does not directly arise from the monopoly. I attended the lobby in Westminster Central Hall. The question of monopoly was not raised. Judging by the reception given at the end of my remarks, and those of my right hon. Friend, the sub-post masters and sub-post mistresses were satisfied.

South Yorkshire

9.

asked the Secretary of State for Industry what plans he has to assist the creation of new jobs in South Yorkshire.

The Government's policies are designed to encourage industrial expansion and employment. South Yorkshire, with the exception of the Sheffield travel-to-work-area (TTWA), is to remain an assisted area, while we have made Mexborough and Rotherham TTWAs development areas.

The Minister has not said anything about providing jobs. Is he not aware that we have made Mexborough a development area? However, the Manvers Main coking plant is threatened with closure. That will mean the loss of 580 jobs. The present rate of unemployment is about 11 per cent. When will jobs be provided? What is the good of giving an area development status, if it does not provide jobs or reduce unemployment?

It is not the Government's job to provide employment. It is our job to create the circumstances and the climate in which industry can provide them.

Is the Minister aware that rather than provide jobs, the obtuse attitude of the Government towards the steel industry will destroy jobs in Sheffield? If the Government persist with that policy, there will be an urgent need for development assistance.

If the hon. Gentleman is drawing attention to damage being done to future jobs in the steel industry as a result of the continuance of the strike, we all understand the direct relationship between an ongoing dispute—called by the steel union—and the future security of jobs.

Industrial Progress

11.

asked the Secretary of State for Industry whether he is satisfied with industrial progress.

Of course we are not satisfied with industrial progress. Whilst the Government have made a good start on getting the right climate for economic growth, it will take time for their policies to be fully implemented and to take effect.

In view of the appalling industrial problems that face all parts of the country, including the Northern region, and in view of growing evidence that the Government's policies are irrelevant, is it not time for the Government to change their policies, or to resign?

The hon. Gentleman has fallen back on a standard party political line today. He usually takes a serious interest in these matters. He must recognise that there is a time Ian between the creation of the right economic policies and the new investment that we expect.

Does my hon. Friend agree that although many of the heavy engineering industries are declining, parts of the communications industry—from large computers to microprocessors —are growing and expanding? In some cases we lead the world. Will he press his right hon. Friend the Leader of the House to accede to the request on the Order Paper for an early debate? The industry will provide many job opportunities. It will also provide growth and wealth for the future.

I certainly agree with my hon. Friend's general analysis. My right hon. Friend the Secretary of State will no doubt wish to consider that question very carefully.

Will the Minister kindly tell us what industrial progress the Government have made during the past nine months

I appreciate the right hon. Gentleman's attempt to be helpful. We have reduced controls on prices, dividends and foreign exchange. We have begun a shift from public to private opportunities, in order to create growth. Those factors take time. However, the framework has been established.

Would not our industrial progress be greatly advanced if the hapless Mr. Len Murray and the rest of the TUC were persuaded that, whatever else we need to impress the outside world, a one-day strike on 14 May can only do harm?

I am sure that my hon. Friend is right. We all share the view that that strike will do no good to the industrial cause of this country.

Will the Minister look at the profits that banks make as a result of Government policies? Will he also ask the banks where they are investing that money? It is a windfall from the present Government.

I am willing to look at that issue, if the hon. Gentleman is willing to look at the return on capital that banks are now obtaining. In general banking terms, those returns are not excessive. As long as that money comes back into the system—as it will increasingly do—it will have been usefully earned and spent.

Steel Industry

12.

asked the Secretary of State for Industry, what proposals he has received from the British Steel Corporation for hiving off its major non-steel making activities.

Surely the Minister accepts that the Government have some responsibility for the affairs of the corporation? Does he agree that if the subsidiary activities of the BSC are hived off, the financial situation will worsen? If it is proper for private corporations to indulge in miscellaneous activities, why is it wrong for a public corporation to do so?

The BSC may have to sell some of its assets because it must behave as a private sector company would behave in that position. If it needs to finance its own expenditure or losses, it may have to sell assets.

Perhaps BSC will decide that it does not wish to continue production at Consett, for example. Will my hon. Friend do his best to ensure that, where private enterprise is prepared to buy and continue production, BSC will not be allowed to hinder such a sale?

The statutory position is that we cannot tell BSC to sell Consett or any other steel works. I am happy to give the assurance that Ministers will not stand in the way of the disposal of Con-sett to the private sector.

Is the Minister aware of any discussions between the British Steel Corporation and the private sector about the disposal of BSC's special steels activities? Does he agree that would have serious implications for British industry, including our defence industry? May we have an assurance that such sales will not be allowed to proceed?

13.

asked the Secretary of State for Industry if he will make a statement on the steel dispute.

I have been keeping the House informed about the strike, and I shall be continuing to make statements as the need arises.

Does my right hon. Friend agree that the longer the strike goes on and the longer it takes to start the furnaces after the strike, the greater will be the import penetration immediately after the strike? Does my right hon. Friend agree that much of that import penetration will be maintained? As from today, what longer-term market share will the British Steel Corporation lose as a result of the strike and can the Secretary of State translate that into the number of jobs lost?

I agree that the longer the strike continues the greater will be the import penetration. I cannot begin to guess what effect the strike, let alone a longer strike, will have on the market share of the British Steel Corporation. I hope that the steel workers are alive to the dangers.

Does not the Secretary of State's non-intervention policy increasingly appear to be self-wounding, short-sighted and stiff-necked? Have not the cash limits already been exceeded by the cost of the strike? Does the right hon. Gentleman agree that he must intervene to safeguard the whole of the British economic base?

The cash limits for next year no doubt have been exceeded by the strike apart from other causes. That makes it essential for the British Steel Corporation to break even by all possible means. That includes disposals an attack on overheads and stocks and by every other means available to management as well as, of course, a further loss of jobs if that is necessary.

Is my right hon Friend aware that many BSC employees in my constituency, some of whom I saw on Saturday, do not wish to remain on strike and ask why they cannot be allowed to negotiate locally?

Many of us would prefer local negotiations to centralised negotiations. That is not a decision for Ministers. It is a decision for management and the unions which normally cooperate. I hope that my hon. Friend is right in thinking that many of the workers would prefer a different arrangement.

Since steel is central to all the core industries—shipbuilding, engineering, motor car and coal—is not the size of the the steel industry of vital importance? If that is so, why does the Secretary of State take as gospel the forecasts and objectives of the British Steel Corporation which has not exactly earned gold medals for forecasting in the past? Why does not the Secretary of State set up an independent inquiry into the proper size of the steel industry? In the meantime, why does he not abandon his rigid and disruptive rundown timetable?

Whatever the British Steel Corporation's record in forecasting it cannot conceivably be as bad as the forecasts of successive Governments who over-expanded the industry. The decline in demand for British steel is related to BSC prices and, alas, quality and delivery at a time when world demand for steel is at a record level. The right hon. Gentleman refers to core industries. A number of those to which he referred, including the car and shipbuilding industries, have declined. Their lower demand for British Steel Corporation supplies is caused by their failure to become competitive. The issues are related.

Will my right hon. Friend, either now or later, refer to the private steel industry, where workers have been called out although there is no dispute? Will he explain how they are affected and what are the prospects for those companies and the people who work in them?

A number of those who work in the private steel sector are well aware of the dangers to the companies for which they work and to their future jobs if they come out on strike. I hope that they will make their own decisions.

Bearing in mind the understandable and justifiable rejection by the steel unions of the original 2 per cent. offer and recognising that the strike could have been ended six weeks ago if the Minister had intervened at the 8 per cent. level, does he agree that he should now intervene before the bidding reaches a higher level?

The right hon. Gentleman is mis-stating the original offer, which I understand was 2 per cent. plus a substantial increase through higher productivity of about 10 per cent. The original offer was about 12 per cent.

Petrochemical Complexes

14.

asked the Secretary of State for Industry if he is satisfied with the United Kingdom content of plant and equipment in those petrochemical complexes at present under planning consideration.

Orders for a substantial amount of plant and equipment have still to be placed. The client companies are aware of the importance that my right hon. Friend attaches to British companies being given a full and fair opportunity to bid for these contracts and of the advantages of United Kingdom supply. United Kingdom suppliers have represented to us their intention to compete vigorously for the work.

Will the hon. Gentleman tell the House what he means by "substantial" in the context of his reply? Will he press the company to do an exercise similar to that done by Shell on the Auk platform to show, after the event, exactly what is the United Kingdom content of the projects at Moss Morran and Brae-foot Bay?

No purchasing decision for the Esso chemical installation has yet been reached. Shell completed most of its purchasing some time ago. The few remaining orders will be placed shortly. It is likely that 90 per cent. of the total expenditure on that plant will be on United Kingdom goods and services. About three-quarters of the contracts for materials and equipment will be placed in this country. The hon. Gentleman's second question was interesting and constructive. I shall certainly examine his idea.

Does my hon. Friend agree that this is an important issue for industry in West Central Scotland? Will he assure us that the Scottish Office will be fully involved in further consultations?

British Steel Corporation

15.

asked the Secretary of State for Industry if, in the light of the subsidies paid on the abortive contract for limestone to Amey Roadstone Ltd., intended for Llanwern Steelworks, he will ensure that future subsidies to the British Steel Corporation are earmarked to specific projects approved by him as part of the overall investment plan.

No. My right hon. Friend approves BSC's general programme of investment, and details of major investment projects are submitted to the Department of Industry, but contracts relating to routine operational needs are a matter for the Corporation.

Is the Minister aware that if he investigated the contract he would be startled at his findings? Is not the industry badly mismanaged and is not that the cause of the substantial losses? Should not the management be suspended and a top level inquiry instituted, as repeatedly requested by the trade unions?

I understand that the hon. Gentleman has corresponded with the chairman of the British Steel Coporation. He has had an opportunity to examine the Amey Roadstone position and was invited to discuss the matter further during a visit to Llanwern. It is unwise to move away from the specific problems and come to general conclusions.

Post Office

16.

asked the Secretary of State for Industry when next he expects to meet the chairman of the Post Office.

My right hon. Friend will meet Sir William Barlow as the need arises.

When the Minister meets the chairman will he tell him that it took 2,000 more men last year to handle 1 billion fewer letters and parcels than it took in 1973–74? Will he urge on the chairman that when confronted with the problems of declining productivity the Post Offic should not always seek the soft option of, for example, withdrawing Sunday collections or deliveries to individual flats?

The question of low productivity is one of the main problems of the Post Office at present. I believe that the union and the management are equally aware of this. Also, I believe that the public will not stand for any further reductions in services, nor will they welcome any increase in charges.

When the Minister next meets the chairman, will he congratulate the Post Office on making a profit of £300 million? On the question of reorganisation, in view of the fact that the telecommunications side is capital-intensive and the postal side is labour-intensive, will he keep both sides together in future, because any break-up would not be in the best interests of the nation?

The profits of the Post Office are necessary for the massive investments needs for the telecommunications side. On the question of the split between the postal side and telecommunications, my right hon. Friend has announced the Government's policy in principle on this matter following the recommendations of the Carter committee.

When the Secretary of State next meets the chairman will he give him an assurance that, if the Government decide to break the monopoly of the Post Office, private carriers will be expected to compete with the Post Office on a national basis, and not simply be allowed to hive off the most profitable parts?

Clearly this is one of the things that we must consider when we make our policy decision on the question of the Post Office monopoly.

Has the Minister of State or any of his colleagues discussed with the Post Office chairman the latest proposals of the accounting body to impose current cost accounting methods without the agreement of the Government?

This is not a matter that I have discussed personally with the chairman, but it is under discussion in my Department. It will be taken up as appropriate with the chairmen of the nationalised industries.

Productivity

17

asked the Secretary of State for Industry whether he is satisfied with the level of productivity in manufacturing industry.

As my right hon. Friend already awards export industry with certificates to show that it has improved its export potential, would not it be a good idea to have a national award for local productivity agreements in individual factories so that some form of competitiveness could apply throughout the United Kingdom?

That is a very interesting suggestion. It underlines that productivity is the key issue and one of the basic fundamental questions behind the steel strike.

Is the Minister aware that the Secretary of State in a speech in Leeds over the weekend discussed "patchy management" as the cause of poor productivity? What is his team doing about patchy management and what positive steps are they taking to improve management?

We are providing greater incentives and tax reductions. That is one of the genuine ways in which I hope the hon. Member will join us in seeking to get better pay for a better job of work done.

Will my hon. Friend assure the Secretary of State that even those of us who belong to what the press call the compassionate wing of the Conservative Party are sadly but totally in support of his policy of obliging British industry to become competitive'? Is he aware that we sadly reject the idea that thousands of jobs can be saved at the cost of taxpayers' money which, in turn, will put many other jobs at peril?

I am sure that my right hon. Friend will appreciate those remarks. They show that this great Party is united on this issue, as on all else.

Steel Industry

19.

asked the Secretary of State for Industry when next he expects to meet the chairman of the British Steel Corporation.

I have full confidence in the chairman of BSC. I have no meeting with him planned, but we meet from time to time.

Will my right hon. Friend confirm that the chairman and the management of BSC would welcome settlement of the strike by some form of independent arbitration? Is he further aware that the ordinary man in the street finds it difficult to understand why the leaders of the main steel trade unions should be so adamantly opposed to such arbitration? Should they not at least seek to ballot their members before remaining so opposed to arbitration?

The British Steel Corporation's management will speak for itself, but I think I saw in the papers that it had asked the steel unions to accept arbitration.

Is it not a fact that the only thing preventing settlement of the strike is the Secretary of State's own veto? Why does he not continue with his journeys around the country and get his colleagues to settle the strike as quickly as possible?

Does not my right hon. Friend agree that if the strike were ended in the way which has been suggested by Labour Members, it would mean even more import penetration because the cost of steel would run the business down even further?

My hon. Friend is exactly right, and, moreover, because our competitors are accelerating their efficiency beyond that of BSC, if BSC does not increase its productivity the reduction in the size of the industry will have to be even greater.

Since the Secretary of State has the utmost confidence in Sir Charles Villiers, can he tell us whether it is correct that Sir Charles warned him in September that there would be the likelihood of a general strike? If that is so, what weight did he attach to that at the time and what weight has he attached to it since?

Sir Charles mentioned that there might be a steel strike, but I am sure that he never mentioned a national strike.

Since Sir Charles Villiers is reported in the Financial Times as having said that he warned the Secretary of State that there might be a general strike as a result of this dispute, will the Secretary of State take steps to see Sir Charles again with a view to ending the dispute?

Will my right hon. Friend take the opportunity of his next meeting with Sir Charles to say how much the Government deplore the attack on the ISTC headquarters at Rotherham? Will he agree that destruction, intimidation and violence are totally unacceptable in industrial disputes from whichever direction, side or point of view they may come?

22.

asked the Secretary of State for Industry when he plans to meet Trades Union Congress leaders to discuss the steel industry.

As the hon. Member for East Flint (Mr. Jones) may know, I am meeting members of the Wales Trades Union Congress at 4 o'clock this afternoon.

If the right hon. Gentleman were to listen to members of the TUC about the steel industry overall in this country, does he not agree that he would hear from them their deep concern about the fact that the right hon. Gentleman is not prepared to re-examine the annual tonnage target of only 15 million tonnes for Britain? Is not this strategically wrong for Britain?

I do not think that the record of political judgments about the size of demand for steel is so good that any one would be impressed by any undertaking that I gave to do BSC's job for it.

Is the Secretary of State aware that the maintenance of a strong and expanding steel industry is of vital national importance, and a matter from which no Government can absent themselves? Also, does he not agree that import penetration, much of it subsidised, is undermining investment that the taxpayers have already put into the steel industry? Will he agree that capital reconstruction, which would lift the burden of historic debt, would allow the industry to expand in order to meet the needs that a fully employed British economy would require from its steel industry.

I suspect that the right hon. Gentleman is asking for a good deal more taxpayers' money in the assumptions behind all three of his questions. The sad fact is that the nationalisation of the steel industry has gravely damaged the steel service to this country.

When my right hon. Friend next meets the TUC to talk about the steel industry will he ask whether the unions believe, and if so why, that they have a greater understanding of what working people in the steel industry require than the workers at Sheerness and Hadfields?

Yes, but it is reasonable to understand, is it not, the nationalised steel industry having been built to what we now see was an over-optimistic size—particularly taking into account the low productivity of steel management and workers—the speed of rundown that is essential if the industry is to become competitive imposes strains? That is why the Government have offered very substantial sums of taxpayers' money for redundancy payments.

Director Of Public Prosecutions

41.

asked the Attorney-General on how many occasions the Director of Public Prosecutions has issued circulars to chief officers of police.

The Director has authority to issue circulars to chief officers of police only in respect of the offences which he requires to be reported to him and the form such reporting should take. Four such circulars have been issued by the present Director. He has no authority to issue instructions to chief officers of police in respect of any other matters.

Will the Attorney-General then explain how his instructions about jury vetting can be enforced to those chief officers of police who are not adhering to his guidelines at the moment?

In October 1975 when the guidelines were issued the Home Office also issued a circular to chief officers of police saying that all cases in which it was intended that a check should be made should be referred to the Director of Public Prosecutions. In March 1979 it came to the attention of the Home Office and the Law Officers that the Northamptonshire police were checking all jury panels against CRO records. This information was passed on to prosecuting counsel. My predecessor expressed grave concern at the failure to follow the guidelines that had been endorsed in the circular.

The Home Office investigated this matter and in June last year received assurances through the Association of Chief Police Officers that the guidelines were being adhered to by all forces. It was not known that in Northamptonshire the former practice had been continued until last week. The Home Office is inquiring into the latest allegations. May I say that I completely disapprove of and thoroughly deprecate what has happened in Northamptonshire.

As the Home Office is inquiring into this matter would it not be constitutionally more proper if circulars to the police were issued only by, or on behalf of, the Cabinet Minister responsible to this House, namely, the Home Secretary?

The circular in question which was based upon my predecessor's guidelines was issued by the Home Office.

Will the Attorney-General confirm that it is not the role of Cabinet Ministers, whether they be Lord Chancellors or Home Secretaries, to interfere with the role of chief constables in their decisions about whether to prosecute? If that is so, what was the purpose of the Home Secretary's well-advertised meeting recently with chief constables, and did he come away with a flea in his ear? Did the Attorney-General approve of, and was he consulted about, that meeting?

I regret that the right hon. and learned Gentleman has obviously not taken on board what I said in the course of my statement last week. That meeting was at the request of the chief officers of police who asked the Home Secretary to meet them.

I am sure that the Attorney-General does not believe that we in this House are as innocent as he pretends. There is a way of inspiring an invitation, as he well knows. I asked him to confirm that it is for chief constables to decide whether to prosecute. Does the Attorney-General approve of that?

If the right hon. and learned Gentleman is suggesting that the statement that I made on behalf of the Home Secretary is not true, let him produce the evidence.

42.

asked the Attorney-General when next he expects to meet the Director of Public Prosecutions.

Is my right hon. and learned Friend aware, particularly in view of this timely appointment, of disturbing reports suggesting that inquiries into alleged police corruption under Operation Countryman are being obstructed as a result of disagreements between the DPP and senior police officers in charge of that operation? Does my right hon. and learned Friend agree that it is of great importance that Operation Countryman proceeds successfully and satisfactorily? Will my right hon. and learned Friend use his influence to resolve any differences that may be obstructing this affair?

I am grateful to my hon. Friend for raising this question, since these reports must obviously cause public anxiety. I have taken a close interest in the Countryman inquiry and there is no truth in the allegation that the DPP is blocking the investigation. He has provided a member of his staff at the inquiry headquarters at Godalming to assist with legal matters. On 1 March Mr. Peter Matthews, the chief constable of Surrey, will take over from the chief constable of Dorset, who has retired. I hope to be able to discuss the whole inquiry with Mr. Matthews very soon. The main difficulty as is often the case is the quality of the evidence which is available.

When he next sees the DPP will the Attorney-General ask the Director to explain the preposterous situation where not a single interview was ordered with any of the 300 directors of Shell and BP, named in the Bingham report annex, on evidence of criminal involvement? Will the Attorney General also take this opportunity to explain to the House why when he informed me on 9 November last year that 14,000 files had been obtained from Shell and BP he failed to say that those files had not been collected by the police and were never examined by anyone?

My statement made it quite clear that the files had not been obtained and that those were the ones that were offered as a result of the demand under the sanctions order. It is right that I unfortunately used the word "obtained" though, if I remember rightly I went on to say in the second half of the answer that it would seem—and the hon. and learned Gentleman has Hansard in front of him—that it included a great number of documents. We certainly did not have them. We were told, and I remember the phrase very clearly, that we would need a number of pantechnicons to be sent to collect them.

Is the right hon. and learned Gentleman aware that there is still great disquiet about Operation Countryman? Though the House will accept that his Department and the DPP are not blocking the inquiry will the Attorney-General comment on the allegations that the Metropolitan Police are blocking the inquiry? Can the Attorney-General tell us when the doctrine enunciated by the DPP that there must be a 50 per cent. likelihood of a jury convicting was first enunciated in his Department and by whom?

The doctrine—the DPP said 51 per cent.—is another way of putting the proposition that there must be more than a likelihood that a reasonable and impartial jury, properly directed, will convict. That is the test. It does not matter whether we use the figure of 51 per cent. or the words I have just used. There is no truth at all—I have looked into the matter with the greatest care—in the allegation that any senior officer of the Metropolitan Police force, or the City Police, who are equally involved in this inquiry, have taken any kind of blocking action. Whether there are junior police officers who in the course of the inquiry, may be exercising their right not to answer questions I do not know. However, that is a right to which they are entitled.

Has the Attorney-General had a further opportunity of considering the suggestion I made on 28 January of appointing an official to act as a prosecution ombudsman who could set public anxieties at rest in relation to prosecution decisions by looking at files that are not always available for public discussion and reporting?

That is a matter that I said I would look at. I have not yet gone further with it.

Master Of The Rolls

43.

asked the Attorney-General when the Lord Chancellor expects next to meet the Master of the Rolls.

On Monday 3 March next, at a meeting of the Supreme Court Rule Committee.

In view of the lack of respect for law and order and the damage done to industrial relations by Lord Denning's recent judgments—overruled even by the House of Lords—is it not time that someone told Lord Denning that he should retire instead of continuing to collect £30,000 a year of public money while launching unwarranted attacks on the trade union movement and the supremacy of Parliament?

Order. If the hon. Member for West Stirlingshire (Mr. Canavan) wishes to criticise the judge, he should put down a motion on the Order Paper and it would then be in order to debate it.

There is no truth of any kind in the suggestion that the learned and much respected judge has ever allowed any personal feelings to influence his decision. Many decisions of his have been upheld and have made im- portant contributions to the law of England.

On 3 March, will one of the topics under discussion be a change in the manner of the writ of summons?

I do not have the agenda but I hope very much that it will, in view of the views expressed by my hon. and learned Friend as well as by others.

When the Lord Chancellor and the Master of the Rolls meet, will not one of the subjects near the top of their agenda be the decision of the High Court this morning that the Secretary of State for Social Services bumblingly and incompetently sacked the Lambeth, Southwark and Lewisham area health authority and placed commissioners in its place? Did the right hon. and learned Gentleman give that incompetent advice to his right hon. Friend? If so will he now advise his right hon. Friend to come to the House and state how he proposes to replace the illegally appointed commissioners with a properly appointed area health authority?

I have not seen the judgment. I have a brief report only of it. I understand that the learned judge said that the order was correct in every respect save for one—that it did not give a time in which the order should operate. The making of the order in every other respect was upheld by the judge.

Lambeth, Southwark And Lewisham Area Health Authority

On a point of order, Mr. Speaker. I ask for your indulgence and apologise for not having given you notice of this matter earlier. It follows from the question asked of the Attorney-General just now by my right hon. Friend the Member for Lewisham, East (Mr. Moyle).

I am in a difficulty. I understand that the High Court today ruled that the Secretary of State for Social Services was wrong to sack the Lambeth, Southwark and Lewisham area health authority and put commissioners in its place. Those commissioners, in accordance with their duties, as I understand it, have closed a hospital in my constituency—St. Olave's. I raised the matter on the Floor of the House at the time, with the good will of all those concerned—there was picketing and the rest—but there was nothing further that I could do, and the hospital has now been closed for three weeks.

Now I learn that the Secretary of State had no right to take that action; that he was out of order legally. I ask you, Mr. Speaker, what protection we can obtain in this House when a Minister has taken action that has caused so much hardship. Should he not be brought here to explain why he took this illegal action, and what he intends to do about it?

Further to the point of order, Mr. Speaker. May we have a ruling from you that on the point that has been raised by my right hon. Friend the Member for Lewisham, East (Mr. Moyle)? It should not be proper for the Minister to put in his appeal so quickly that it acts, as it were, as a gagging writ to prevent any discussion of the matter in the House? Can you confirm that it would be in order to raise this matter under various rules tomorrow, right up until the point that the appeal might be made?

Further to the point of order, Mr. Speaker. It is imperative that the House has a statement from the Secretary of State for Social Services. This morning's decision is of great importance. Not one, but two hospitals have been closed since the commissioners took office. Have you received a request from the Secretary of State to make a statement? If not, could you facilitate the making of such a statement?

I am obliged to the right hon. Member for Salford, West (Mr. Orme) for the way in which he presented his point of order. I have received no request for a statement to be made. In reply to the hon. Member for Lewisham, West (Mr. Price), I would say that until a date has been set for a hearing a matter is not sub judice so far as this House is concerned. On the last point, it must surely be for the usual channels to get to work. I cannot invite statements from Ministers.

Further to the point of of order, Mr. Speaker. I am trespassing on your good will, but in the light of what you have said would it be appropriate if I applied first thing in the morning for permission to table a private notice question to the Secretary of State and in that way get him to make a statement?

The right hon. Gentleman knows that I cannot commit myself in public—I do not do it in private—about a private notice question. He has been here a long time and he knows his way around.

Further to the point of order, Mr. Speaker. In view of what has been said and of the words that I think you yourself used, I should have thought that that was about as clear an invitation as there could possibly be for the Leader of the House to make a statement on the matter. I hope that he can give the House an indication immediately that he recognises the great importance of the subject and that he will insist on a statement being made to the House as early as possible by the Minister concerned.

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons
(Mr. Norman St. John-Stevas)

I have listened to all the exchanges that have taken place and I shall certainly draw them to the attention of my right hon. Friend the Secretary of State for Social Services.

Order. In view of the statement of the Leader of the House there hardly seems another point of order on which I can rule connected with the Standing Orders of the House. However, if the right hon. Gentleman has something about the rules of the House on which he wants me to rule, I will of course do my best to do so.

I wanted to ask whether it would be in order for the Leader of the House to go a little further than he has done so far and at least to say that if a Minister is found to have been breaking the law an immediate statement will be made by the Minister in question.

Energy Needs

3.37 pm

I beg to move,

That this House seeks a better understanding by the public of the nation's future energy needs, of the various threats to the nation's ability to meet them adequately, and of the strategies that are open.
Despite popular opinion, this House has been capable over the years of reaching a wide measure of agreement on many issues. On energy, we have shown over the years that we are capable of reaching a sensible agreement and one that I hope will give much heart to the Ministers responsible for these matters.

Since 1973 we have recognised that our country depends far too heavily on imported oil supplies. Any vestiges of hope that 1973 was a momentary hiccup in an otherwise stable situation of dependable and abundant supplies of oil at reasonable prices were rudely shattered by the events of 1978–79. In one year, oil prices have doubled and depletion policies have been introduced—I make no complaint about that, since we have such policies ourselves—by countries such as Iran. The world therefore is burning more oil than it is producing and it is producing more oil than it is discovering.

Oil is therefore too valuable a fuel to burn indiscriminately. It is needed by industry, and will be increasingly needed as the years go by, for more productive purposes. We in the West—not just this country—have had to recognise that our supplies of oil come from areas of considerable political instability. That is why President Carter recently warned that any act of aggression from an outside Power—he had principally in mind the Middle East—would be met by force.

Despite our oil reserves, it is widely agreed on both sides of the House that they are small in relation to world demand and can help us to become self-sufficient for only a brief period during the coming decade.

We must also recognise that Government can protect the future of our industrial society—that is, our standard of living—only by developing other sources of energy, and that involves taking decisions now. There can be no grounds for delay, for such is the scale of the investment that is needed that it takes a long time before any decision that we take now is fulfilled.

I am not suggesting that those views are not challenged. Many hon. Members on both sides of the House will be aware that there are those who question the official forecasts of future energy demand. They think that the amount of energy that will be required is exaggerated, but there are others who argue that we have underestimated our capacity to meet that demand. There are also those who argue that rather than pay what will be a heavy bill for investment in this country, both coal and nuclear, we should change our way of life and opt for a more modest style.

Whatever we may think about the reliability of forecasts—and we have lived through a few in our time, including a few the particulars of which I have with me—we must recognise that we are talking about energy forecasts that leave only 20 years or so for us to discover whether we are right or wrong. That is not long in terms of an energy cycle. In the end, the House can act only on the best information that is honestly given to it. I believe that we would be failing in our duty to the nation if we did not accept the energy forecasts that are before the House.

I think that the Opposition Front Bench accepts those forecasts just as much as the Government Front Bench does. I believe that that is why the majority of hon. Members have concluded that despite the problems connected with our kind of industrial society—and there are plenty—the overwhelming majority of our citizens would rather have such a society, problems and all, than go back to a pre-industrial age. The illusion—and we must persuade the public that it is an illusion—is that one can have the obvious material benefits of an industrial society without a sound energy base. We cannot. I have no wish to consign future generations of this country, starting with my own children, to a life as it was lived 150 years ago by the mass of our people, and as it is still lived by millions of men and women throughout the world—a life that we can describe as nasty, brutish and short—because we funk making important decisions.

There is also a wider and moral reason for urgent action. The report of the Brandt Commission, whose membership consisted of some of the most distinguished world politicians and statesmen, including a former Prime Minister of this country, emphasised the great need of the nations of Asia and Africa for energy. It pointed out that a small percentage of the world's population, principally in Europe and the United States, could not continue to gobble up the world's finite fossile fuels. Fortunately for us, who live in an advanced industrial nation, there are many options open, which is more than can be said for those who live in the so-called developing world.

We do not have to go back to a nineteenth century coal economy, with all the miseries that that involved, not only for those who worked in it but also for the wider environment, with the risk of carbon dioxide pollution. In any case, as those hon. Members who represent coal mining constituencies know, it will not be too long before coal will be used for more valuable chemical purposes and as a substitute for natural gas. It will no longer be tolerable to burn it on open fire grates.

I am grateful to see present my hon. Friends the Minister of State and the Under-Secretary of State who is responsible for the coal industry. The strategy, which was accepted by the previous Government just as it has been by my right hon. Friend, is a strategy based on coal, conservation and nuclear energy—the so-called co-co-nuc strategy. It is the last of those three strands that causes most confusion and controversy. If the need for an expanded nuclear contribution were not accepted by the public, I believe that would pose a very serious threat to the success of the strategy as a whole. That is why I believe that this House should back every effort to help public understanding of the limited but vital role which nuclear power has to play. I say "limited role", because there is no evidence so far as I know—though I stand to be corrected—which suggests that our future must be wholly dependent on nuclear power.

There are other technologies, such as wind and tidal power, and solar energy, whose potential needs to be assessed. Research is now going on in this country, on a European basis, and in the United States, into nuclear fusion, which if successful could provide man with an infinite source of pollution-free power. But a coal, conservation, nuclear strategy can give us time to search for alternative energy sources as well as time to develop them.

In my view, it does not make sense to suggest, as some people do, that we can do nothing without nuclear power altogether. Nor should we be frightened away from using nuclear power. Much of the public resistance to nuclear power is based on fear. I do not want to make light of that, because in the minds of some people there is a genuine fear of nuclear power However, there in an irrational aspect to that fear. The irrational fear is that the nuclear reactor will blow up just like an atom bomb. But, as I am sure hon. Members on both sides of the House will realise, that could no more happen to a nuclear reactor than it could to a bag of chips.

There is the more rational fear of the delayed and unseen dangers of radiation. All hon. Members are trained to think in terms of thresholds. We believe that once a limit has been exceeded we get into trouble. That applies not only to radiation but to other matters. There are some who argue that radiation is an exception; that there is no such thing as a threshold; that any amount of radiation is bad; and that we should do nothing whatever to increase radioactivity in the world. They may be right. I do all that I can to avoid unnecessary X-rays. If as the distingulished scientist, Sir Fred Hoyle, writes in his book "Commonsense in Nuclear Energy", the amount of radioactivity experienced by those in the area of the Three Mile Island incident near Harrisburg was less than the amount which was experienced in a two-week holiday in regions of abnormally high radiation—he gave examples of Dartmoor and the Scilly Isles—we, as planners of energy policy, should not be deterred by risks of that order.

The United States National Academy of Engineering put the risk in the following way:
"The exposure to radiation of those living within 50 miles of the plant"—
that is, the Three Mile Island plant—
"has been estimated to average 1 millirem. That is the amount normally retained from natural resources after three days of living, or perhaps one-third of that received on a jet flight across the country."
No one in the House or the country would suggest that we should be deterred from flying by jet. I dare say that a jet-setting business executive would be thought pretty eccentric if he turned up at London Airport wearing a lead suit. We accept that sort of risk when we fly, and we accept rather greater risks when we get into our motor cars, but somehow, when it comes to nuclear energy, risks of that order of magnitude—which are less—become grossly exaggerated.

Does my hon. Friend accept that in this tricky area there is an important distinction between voluntary and involuntary risk? Many people, not only in Britain but abroad, are worried about the voluntary and long-lived nature of some aspects of nuclear power.

I respect that point. However, we have come to live with involuntary risks, with the development of the chemical industry, which has its own forms of pollution, and with the coal industry, in respect of carbon dioxide. Obviously we would not wish to live in a society in which there are too many involuntary risks, but my argument is that we have come to live with a certain measure of involuntary risk. I see no great distinction in making an exception in the case of nuclear power.

We of all people should not expect power to be produced without any risk. We in Britain, with our long-established coal industry, should know that. By any statistical yardstick, the nuclear industry heads the list in safety, and its effects on the wider community stand more than favourable comparison with the coal industry.

I agree with Sir John Hill, the chairman of the Atomic Energy Authority, that the rate at which the industry can progress will be determined not by the speed of technology but by public acceptance of what the industry is trying to do. It will also be determined by the public's perception of there being no unacceptable rate of accident. It must also depend, in a democracy such as ours, on the willingness and ability of the media to treat the subject objectively and in an understandable manner.

Over the years, the media, unwittingly on occasions, have contributed to an unbalanced presentation, because of their emphasis on disaster. That is not the only area in which the press concentrates on disaster. Bad news, so I am told, is news. There is no such thing as good news; it is always bad. We must learn to live with it in nuclear power. There is an emphasis on disaster, and too frequently—this is an area in which we should expect something better of the media—articles confuse possibility with probability.

Those shortcomings can arise and have arisen because the presentation of the facts by scientists and nuclear engineers has often been confined to specialist groups. We have heard them speak at specialist meetings, and they attend Committee proceedings in the House. They are very impressive. They have a difficult communications problem, but it is gratifying to note that recently they have become more aware of the need to communicate with the wider public, and to speak directly to them.

It is therefore all the more regrettable that during the past few weeks open verbal warfare has broken out between the deputy chairman of the Atomic Energy Authority, Dr. Walter Marshall, and the science editor of The Guardian. When the editor of Nuclear Engineering also appears to have problems with The Guardian one begins to wonder what hope there is for a sensible rational discussion.

The editor of Nuclear Engineering writes:
"In his enthusiasm for blaming everything from the common cold to the rate of inflation on nuclear power, Anthony Tucker"—
the science editor of The Guardian
"has excelled himself."
However exaggerated that stricture may be—I do not wish to make any judgment —there appears to be no excuse for that newspaper publishing an article claiming that a report by the Nuclear Installations Inspectorate rejected the report of a study group headed by the venerable Dr. Marshall. It was not the Nuclear Installation Inspectorate. The science editor of The Guardian got it wrong. There is little wonder, therefore, that Dr. Marshall should say in his reply to The Guardian:
"Factual and avoidable errors should not form part of major articles on nuclear issues."
Dr. Marshall is right. The Guardian is also right when it states that:
"There is not one body of received nuclear opinion."
There is all the more reason, therefore, why the press and the scientific world should ensure that debate is conducted at the highest possible standard. I understand that the BBC is also not without its critics from the nuclear fraternity.

We can do something about that. We should take a leaf out of the book of President Carter's commission on the Three Mile Island incident—the Kennedy Commission. It made a number of recommendations. In essence, it called upon the media, regardless of size, to hire and train people who would familiarise themselves with the nature of reactors, and with the language of radiation. In particular, it recommended that resporters should educate themselves to understand the pitfalls in interpreting answers to "What if?" questions. It stated that reporters covering an accident should have the ability to understand uncertainties expressed by sources of information and probabilities assigned to various possible dangers. According to one view that was put to the Kennedy Commission, too much emphasis was placed on the "What if?" rather than the "What is?" question. As a result:
"the public was pulled into a state of terror, of psychological distress."
It is as though we were constantly asking the airlines "What if a jumbo jet crashed on central London or on Wembley Stadium on Cup Final day?" It is possible that that could happen, but the possibility is remote. We have now given up putting that type of question.

I suggest, therefore, that the nuclear industry, the media and the Central Electricity Generating Board should arrange a series of conferences at national, regional and local levels so that they can get into one another's minds and understand the true nature of the problem. I ask the Government to consider what they should do to inform citizens who are likely to be affected by the building of nuclear sites. There are a number of areas in Cornwall where it is proposed to build nuclear sites. Often people acquire knowledge during a public inquiry. I suggest that there should be meetings that precede public inquiries.

Another threat to the understanding of nuclear power is the manipulation of information by anti-nuclear groups. The Flowers report, the sixth report on environmental pollution, got it about right when it observed:
"We have no doubt that some who attack it are primarily motivated by antipathy to the basic nature of industrial society, and see in nuclear power an opportunity to attack that society where it seems likely to be most vulnerable, in energy supply."
I am not referring to Friends of the Earth or the Council for the Preservation of Rural England, which have genuine reservations and motives.

I should like to comment on an important but no doubt less controversial aspect of the Government's energy strategy—conservation. We are told that the investment required to increase the production of coal by 50 million tonnes a year is around £10,000 million. The 12 nuclear reactors that the Government feel should be built will cost a few thousand million pounds more than that. It is a prodigious investment.

In the United States—it is probably also true in Britain—it has been worked out that it is now a better investment to save a British thermal unit than to produce an additional one. Half the energy in Britain is wasted, and therefore the opportunities for saving are enormous and rewarding. If the required investment in coal and nuclear power is prodigious, it only underlines the importance of conservation. I hope that the public will understand that by conservation we mean something more than switching off an appliance, insulating a loft, or wearing an extra sweater. Conservation means making more effective use of our energy and it involves the introduction of a whole range of new technology.

Thanks to microprocessors, we now have new control systems that, while still maintaining industrial objectives, reduce energy use as well as comfort conditions to an acceptable level.

I hope that the Minister will be able to tell us what progress this country is making on energy conservation. The EEC has set targets. What co-operation have we with the EEC? How well do we compare in that respect with our European friends?

I am associated, in a most humble capacity, with a company that is involved in demand management. I have a non-executive role and I am not even paid. But at least it puts me in a position to assess the reaction of some companies. There are too many companies in this country that show a distinctly apathetic attitude towards investing in conservation technology.

The head of the conservation technology unit in my hon. Friend's own Department said last year:
"We have the inconsistency of investing with a pay-back period of 10, 15, 20 years in energy production, yet when we look at energy conservation we use a two or three-year period."
I ask my hon. Friend what is the scope of the conservation programme in his energy strategy, bearing in mind that his Department has announced that conservation grants are to end in June? If he intends to rely on the price mechanism to encourage economy, I make no serious complaint about that. When people are considering whether to waste a product, price can concentrate the mind wonderfully.

Will my hon. Friend also consider introducing cash repayments for schemes that show definite savings? This is done in France. What consideration has my hon. Friend given to introducing legislation to ensure that approved energy demand systems are installed in all buildings, with penalties for non-compliance?

In that interesting and provocative report "A low energy strategy for the United Kingdom", the author, Gerald Leach, may have gone overboard for conservation at all costs, without paying sufficient regard to economic feasibility and the social acceptability of it all, but he illuminated the opportunity and benefits of conserving energy, and we are very much in his debt. What makes conservation policy so attractive is that it is a policy in which the citizen himself can play a part. He can make his personal contribution and he can benefit from that.

I should like briefly to sum up my argument. It is that this whole conservation and nuclear strategy is the best that we can devise, given the state of our technology. We are living in an age of transition. Procrastination, in the hope that the problem will go away or that there is some perfect solution, will only make things worse. There could be nothing more dangerous than having to depend on a crash nuclear programme at the end of the century precisely because we have neglected now to adopt a more steady and orderly programme of nuclear development.

The strategy adopted by the Government, supported by the Opposition, will give us time to look round and develop other sources of energy. The American National Research Council's committee on nuclear alternative energy systems put the matter in this way:
"The problem is in effecting a socially acceptable and smooth transition from gradually depleting resources of oil and natural gas to new technologies whose potentials are not fully developed or assessed and whose costs are generally unpredictable."
That, in effect, is the message that we have got to get across to the country.

The hon. Gentleman, in the course of making some good points, referred to Cornwall. My constituents would like to know why it is proposed to build 1,350 MW nuclear reactors in far-away places such as Cornwall, when, clearly, sites could be found much nearer to areas of population, such as at Battersea, in London. Why must the sites be in areas far from the centre?

I am sure that the Minister, with his detailed knowledge, will be able to reply to that question. My own reaction would be that we already have nuclear reactors in other parts of the country. There are two in semi-urban areas. The one at Dungeness is very close to my constituency. My hunch is that there is probably a shortage of electricity in the western part of the country and that there is need for power development there.

It may help the hon. Gentleman if I point out that the national grid network badly needs a boost in that part of the country.

That is what I was trying to say, but the hon. Member for Bristol, North-East (Mr. Palmer) put it much more succinctly and accurately than I was able to do. I am much obliged to him for his intervention.

I was saying that the age of transition gives us time in which to find alternative energy sources. It is not just a question of science or economics. Far-reaching decisions are involved, affecting the future of our country. That is why I believe that it is the most important political question that we in this Parliament will have to face.

4.5 pm

The whole House is much obliged to the hon. Member for East Grinstead (Mr. Johnson Smith) for raising this subject this afternoon. It is no reproach to him if I say that he has not said anything that is particularly new, because the whole ground has been gone over so many times. But there is no reason why good arguments should not be repeated, and I found myself generally in agreement with him.

The hon. Gentleman is right when he says that energy is fundamental to civilisation at all levels. Whether we are talking of past water mills and windmills, or the former power of animal muscle or human muscle, or these days' nuclear reactors, civilisation always needs energy.

It is also true that without energy supplies in massive quantities, modern Western society would collapse. It can be convincingly argued that without the cheap and abundant oil of the period from the 1950s to the early 1970 the great post-war jump in Western living standards would probably not have taken place. The new political and financial limitations on those cheap and abundant oil supplies are causing today's stresses and strains on both sides of the Atlantic. Many of us would argue that higher energy prices have been the major contributor to the inflation of the currencies in the West.

But now the harsh truth about our material civilisation in the West is emerging. It is that our civilisation is based on taking from the earth nature's own store of coal, oil and gas; that those resources are finite; and that unless alternative sources are found and used, Western civilisation—or, indeed, civilisation generally—will last only as long as the fossil fuels last.

It is always possible to contend—the hon. Gentleman dealt with this—that our present mode of life in the developed world is rotten and corrupt and that, by some means unspecified, we should return to a simpler and materially poorer way of living. That is only another way of saying that we should abandon the fight against poverty and let deprivation spread itself as widely as possible. But what would we do then about the ever-growing populations that have been made possible as a result of abundant energy applied to industry and agriculture? This question applies not only in our own country and much of the Western world but in the world generally.

It is, therefore, fundamental that we should develop the alternative sources of energy. It may be that the fossil fuel sources—coal, oil and natural gas—will last considerably longer than is now anticipated, but, in the very nature of things, once they are taken they cannot be replaced.

A point that is not often made is that among the alternative sources of energy one must place nuclear power first and foremost. There is a tendency to see the wind, sun, waves and tides as alternatives to nuclear power. They are nothing of the kind. Nuclear power and the others are all alternatives to fossil fuels, and some might say that they are coming along just in time. I am not arguing that the wind, waves, tides and sun cannot all play their part as new sources. They can; but they are not opposed to the uranium source; they are complementary to it.

The biggest question of all is quantity, or "How much energy?" I have one or two figures that may meet with general assent. These figures may help us to calculate our energy needs over the next couple of decades. One can work on similar equations for other Western countries.

In 1977 the energy consumed in the United Kingdom for all purposes, including transport, expressed in terms of coal or its equivalent, was 360 million tons, give or take 1 million tons. About one-third of that energy was provided by coal, a little under two-thirds came from oil and natural gas, and about 4 per cent., which makes 100 per cent., was shared between nuclear and hydro power—about 14 million tons of coal equivalent. So the nuclear contribution to our energy equation is small at the moment. It is about 4 per cent., and we could probably throw in about 1 per cent. for hydro power, mainly in the North of Scotland.

What is likely to be the demand for energy in 20 years from now, at the turn of the century? Taking the lowest possible realistic annual growth of 1 per cent. or 2 per cent.—which is low indeed when one considers the industrial growth of this country since the War—a rough and ready estimate gives an energy requirement of 500 million tons of coal equivalent by that time. How is that demand likely to be satisfied, allowing for improved energy conservation? I agree with all those who say that it is essential to conserve energy and that we must work on that, but I believe that most people will accept the forecast, even remembering how fallible prophecy is, especially in connection with fuel and power, and keeping our fingers crossed.

The expected contribution of fossil fuels by the end of the century will be about 300 million tons of coal equivalent. Estimated savings from improved conservation—this would be a considerable improvement—would be about 30 million tons of coal equivalent, and the development of renewable sources, which is a more exact term for the tides, wind, waves and sun, will be 25 million tons of coal equivalent. Again, that is possibly a little optimistic.

From that calculation it will be seen that there is a shortfall of approximately 145 million tons of coal equivalent that can only come from nuclear fission, because there is nowhere else from which it can come, allowing for technical, economic, political and social restraints in a free society.

Naturally, if we produce more coal than at present seems possible; if we could afford to use more oil; if the wind, the waves and the sun give forth their abundance in double-quick time; if the public have a change of heart, drive at half the speed—of which there is little sign on the motorways at present, in spite of the price of petrol constantly rising—insulate their lofts and wear thicker underwear in winter, the increased nuclear contribution could conceivably be smaller.

But the electricity generating authorities—I speak with some knowledge and declare my interest in that industry—cannot proceed on the basis of "ifs". New power stations take up to 10 years to plan, obtain consents for, build and commission, so the electricity authorities are not in the position of thinking about what will happen next year, the year after, or in five years from now; they must look 10 or 15 years ahead and plan accordingly. There was a time, not so long ago, when the country was suffering from load shedding and cuts of electricity supplies, which does not help industrial productivity.

In addition to the time taken to plan, design, develop and build power stations, worn-out and inefficient plant must be taken out of service according to planned schedules of redundancy arranged well in advance. Indeed, the overall thermal efficiency of the British electricity supply system is not as it should be, because too much oil and inefficient plant is still in use.

Whatever our views on nuclear power—we may feel that it has dangers different from anything else that we have so far known—we must accept its use. The hon. Member for East Grinstead went into the question of risk. I will add another figure to his collection that might interest the House. It is generally reckoned that under normal operating conditions there is more radioactivity from a coal-fired power station than there is from a nuclear station. That apart, and judged by the safety records so far, surely there has never been an industry in the history of new technology that has had the safety record of the nuclear industry over the past 25 or 30 years.

As the hon. Member for East Grinstead said, anything might happen in future. We can judge only on the basis of probability. Therefore, I say to the Government and to the Minister that I think that we are right to proceed with a moderate nuclear power programme. I shall not go into the question whether we should favour the pressurised water reactor in future or whether we should continue with the advanced gas-cooled reactor. At the moment the Select Committee on energy, of which I have the privilege of being a member—I see that the hon. Member for Havant and Waterloo (Mr. Lloyd) is present; he is the Chairman of that Committee—is looking into these questions in great detail.

I have never been especially enthusiastic for PWRs, but in the end I do not think that the House, or even the Select Committee on energy, can choose a reactor for the generating authorities. That is something that they must choose for themselves if they are to have free and independent management responsibility. We in the Select Committee can draw the attention of the House to the alleged risks and the dangers that might arise. We can take evidence from such eminent men as Sir Allan Cottrell—as we did in Committee last week—who, without any hesitation, said that he would not be in favour of a PWR. He is an AGR man, and wants us to go on along that road. However, in the end, having appointed, through the Minister, a body of experts to run the electricity supply industry, Parliament cannot politically go against their honest technical and industrial judgment and do their job for them.

I hope that we shall proceed with caution and understanding with nuclear power and shall listen tolerantly to every other point of view that may be expressed. But overriding everything is the responsibility of the present Administration—as it would be of any Administration—to safeguard the energy supplies of this country over the next four decades in sufficient quantity, because without that being done the standard of life of the people of our land will go down and down.

4.20 pm

The hon. Member for Bristol, North-East (Mr. Palmer) ended his speech by saying what I can only reiterate. He spoke about the next four decades. He has outlined the importance of a nuclear programme and has summarised from his experience the alternatives.

First, however, I should like to congratulate my hon. Friend the Member for East Grinstead (Mr. Johnson Smith) on winning the ballot and choosing the subject of energy. He has done a service to this House and to the country by reminding us of our dependence on oil and the small reserves of this country. He has set out to achieve a better understanding by the public of the nation's future energy needs, the threat to the nation's ability to meet them, and the strategies that are open. I should like to touch on that matter later.

The value of this debate at this time is the opportunity to ask the Minister of State to summarise the factors that that have changed the situation since general election and to outline in greater detail the difficulties that have to be faced and the pitfalls to be avoided by the Government. This afternoon the House has discussed the work of the party committees, and the evidence which the Select Committee on energy has already taken. There is the all-party energy studies group, which has just been set up, including representatives of the House of Lords, the House of Commons and outsiders, under the chairmanship of my hon. Friend the Member for Canterbury (Mr. Crouch). There is the material study group, under the chairmanship of my hon. Friend the Member for Bedford (Mr. Skeet), which last week had a fascinating presentation from Sir Denis Rooke, the chairman of the British Gas Corporation. Then again, there is the parliamentary scientific committee, which has continuously been looking at these matters.

But these committees, as has already been discussed, tend to examine the alternatives in detail, and not enough thought is being given or can be given by such committees to the political, economic and industrial strategy which is essential if the nation is to choose the right course over the next decades and well into the next century.

I have always objected to Christian Democrat and Social Democrat colleagues in Germany, let alone Opposition Members, asking for an energy policy, whether in the European Parliament or in this House, because the variables are so great. The factors of constancy are limited, and there must be flexibility for individual industries and corporations to operate within broad guidelines that are established from time to time. However, I agree with my hon. Friend the Member for East Grinstead that there are decisions that must be taken now, and I hope that we shall learn more of them.

I had hoped to speak in the debate on the EEC energy objectives on 5 February. I would have hoped to put various views on the European policy at that time to the Secretary of State. But since then I had the opportunity of attending a number of meetings about energy and I have had time to crystallise some of my own thoughts. I have been asked what I should like the British Government or the EEC to do, and in public meetings I have had to admit, in the end, that the strategy can be only an Osborn domestic strategy or an Osborn European strategy.

My hon. Friend the Member for East Grinstead referred to co-co-nuc, which is another strategy. I thank him for bringing that in. But I hope that those strategies will appeal to the Secretary of State for Industry and to my hon. Friend and the Conservative Party and to Members of Parliament in the European Democratic Group, as well as elsewhere in the appropriate industries and in the county.

There are, however, two issues that have worried me and others. First, the general public in the Western world—and I am certain that this is true of the United States of America and maybe Japan, as it is certainly for Western Europe and this country—do not see an energy crisis at present. They may complain about rising costs of gas and electricity, and, above all, of petrol. But to talk about a crisis and the immediate threat of a crisis is almost meaningless to them, and this has been proved in opinion polls time and again. Obviously, this was apparent with the British motorist last summer, when he could not find petrol at the pumps. The United States of America became a little more violent, with one or two instances of queue jumping at gas stations resulting in shooting incidents because some impatient motorists had the temerity to jump the queue. But the political uncertainty in Iran has highlighted the insecurity of supply from the whole of the Middle East.

Therefore, it must be a national as well as a European objective to obtain a degree of security of supply, and this means obtaining that security at higher costs because of the uncertainty of overseas suppliers. This has been one object of EEC policy since 1973—greater dependence on own resources and less dependence on external resources.

The second issue that has worried me has been the impact of increased gas prices on the general public and, perhaps, a failure on the part of my right hon. Friend the Secretary of State and his Ministers adequately to explain the issues to the public. I am not being critical. It is hard enough to explain a price rise, anyhow. But in the United States of America the fact that the price of gasolene has doubled in the last year or two—although it is still well below European prices—has been regarded as a conspiracy between the oil companies and the United States Administration. Certainly the recent statement about the rise in gas prices has been put to me, even by industrial users, as a conspiracy between the British Gas Corporation and the British Government. To some it makes nonsense to talk of a need for a rise in gas prices when the profit record of the British Gas Corporation has been so good. I can understand that view. But Sir Denis Rooke, privately, in a Committee of the House, reinforced the view of Members who study these energy issues that a rise in prices is essential for the long term if new exploration and production are to be put in hand, and if it is to be made worth while to supply industrial as well as domestic consumers in five, 10 or 15 years' time.

Already the increase in the gas price will mean that the British Gas Corporation will be able to pay more for its gas to ensure that producers meet the demands of its consumers of tomorrow. This will justify, perhaps, the new gathering line for Strafjord and Cromarty. I hope that my hon. Friend the Minister will touch on this matter because it affects his constituency.

It will justify less flaring of gas, with a greater development of alternative methods of utilising this wasted gas, perhaps by freezing it near the rigs, and bringing it to this country, and, if necessary, selling it elsewhere. It will justify exploration in what have hitherto been considered uneconomic areas for gas or oil. Therefore, this gives the country a greater degree of security over the next four decades—and security is important.

Reference has been made to nuclear energy. The House will know that, nearly 40 years ago, I did quantum physics. Just over 30 years ago, I was working with scientists at Harwell. I learnt then that an atomic energy programme could be developed only on a time scale of at least half a century, and I have lived through most of that time scale already. An energy strategy to save the civilisation of the Western world must be conceived as a strategy not lasting 15 or 20 years—as the Community and the British Government are doing—but as a concept of what is needed in the next 50 years or even for a century hence.

To too great an extent, market forces, and the relationship between poilticians and their constituents, demand jam today and not tomorrow. The challenge of today is that Parliaments and, inevitably, Governments, have not the chance of developing these strategies over such a time scale.

At the weekend I met two groups. One was the Sheffield group of Friends of the Earth, whose president, I believe, is Arthur Scargill, who supports coal. That meeting was attended by members of the Conservative ecology group. I stressed the value of their work in so far as it drew attention to possible alternatives and the need for safety on a nuclear programme. They stressed systems and the use of small water wheels and generators on every stream and considered whether the output from such small generators could be fed into the grid with the possibility of supplying electricity to local users. We discussed combined heat and power schemes. I still think that the heat pump is all important. Of course, there is the cost of solar energy installation and the need for incentives for it. These are alternatives on which I hope the Government will elaborate as time goes on and will provide the incentives to people to take advantage of them.

Of even greater interest was a conservative European meeting in Coventry last weekend. I addressed that meeting on a European energy policy with Mr. Madron Seligman, the chairman of the energy group of the European Parliament. The guest of honour was Gerhard Kunz, the chief whip of the Christian Democrats in the Bundestag. That meeting brought home to me the need to co-operate and work with other members of the Community at this time. A visit to Coventry cathedral after a decade, plus the fact that I had witnessed Coventry being blasted to pieces 40 years ago at the beginning of the war, brought home to me the need to work together on a European and international scale. In March 1978 Canon Kenyon Wright, according to a note in the cathedral, had referred to the fact that generations ago there were divisions within Europe and then went on to talk about divisions between north and south. I feel that there is now a danger of divisions within Europe emerging and resulting in an inability of the north to help the south.

My right hon. Friend the Member for Sidcup (Mr. Heath), a former Prime Minister of this country, recently spoke about the —17 thousand million increase in the cost of oil to the Community and the need to talk of broader issues, including energy, together. The Government have done that.

Last week, at the Fuel luncheon club on the world nuclear energy scene, the Secretary of State made some interesting points. He said that the days of cheap energy had gone for good; that the security of supply was of increasing importance; that the United Kingdom as an oil producer and consumer could help influence political forces; and that the United Kingdom was doing a great deal for the EEC. That is not clearly recognised. Last year we exported 28 per cent. of our production, and well over half our exports went to the Community. I hope that our Community partners realise that.

The confidence of the oil companies is increasing. Yet, despite these good signs, there is a need to develop coal, nuclear power and energy conservation. I could go on to reiterate what my right hon. Friend said, but I now come to the domestic strategy.

Mr. John Feilding of the Bow Group has cirticised the Government on their disappointing progress in returning public enterprise to the private sector. The House has considered proposals for the reorganisation of the electricity industry. Obviously there must now be new arrangements for distribution and a new arrangement for production input, especially from free enterprise power sources.

The first essential is that the monopoly powers must be altered to allow wider private generation, and it would be wise to sell individual power stations to private companies. However, that must be done gradually. Of course, there should be local distribution.

Gas must also be considered. Exploration and production should surely be under the auspices of free enterprise. The creation of the BNOC has been a disaster. This matter needs looking at logically. I do not want a Conservative Government to make any drastic changes, but I should like them to consider these two issues.

In the 1970s the National Coal Board wanted money for oil and gas exploration. I suggested that it should sell a coalfield and use the money for exploration, thereby becoming an energy company, and bringing about other such companies.

I should like to see European and British energy companies extracting gas, coal and oil—including coal from the North Sea, if necessary—generating electricity, whether nuclear or conventional, and selling it to common carriers of gas and electricity. The British Gas Corporation, according to Sir Denis Rooke, is not at all keen to buy Norwegian gas, unless to supply this country's needs, and he is less keen to sell it to our European partners. But he could buy gas from elsewhere. Britain could use its technology and scientfic knowledge for advance in this area. If there were to be the concept of individual energy companies, their field of interest could be Europe. If I had time I would have liked to develop those concepts further, but I will do so on another occasion.

Two factors seem certain. One is that electricity will be the energy carrier of the next century. That means that the electric vehicle will come into being, particularly in urban areas, and there will be greater electrification of transport, including rail transport.

It is interesting that the Friends of the Earth and the electricity consumer bodies are complaining of excess electricity capacity now. The nation may have excess capacity in 1980, but it is a matter of doubt. There is only 25 per cent. or 28 per cent. at the height of a rough winter. With a few breakdowns, the country could have been in difficulties. If the country could count on a European strategy it would be possible to sell electricity to Britain's friends on the Continent—France, Germany, and the rest of the EEC.

On 14 January I asked the Secretary of State
"what consideration he has given to the concept of building up a surplus energy capacity, whether electricity, coal, gas".—[Official Report, 14 January 1980; Vol. 976, c. 1189.]
I asked in a written question for figures on the export and import of all energy sources in Britain and the Community as a whole. I was in touch with a member of the European Parliament—Mr. Madron Seligman, chairman of the energy group—and told him what I was doing, because I thought that Britain could be the powerhouse for Europe.

In a Conservative journal called "The European", published by the Young European Democrats, under the heading "A Powerhouse for Europe" I found a reference to a speech that I made on this subject. This article was written by Madron Seligman, and covered much of what I put forward at the Conservative conference in Coventry. Therefore, there is co-operation between the Conservative energy committee in the House of Commons and its opposite number in the European Parliament.

I promised to be brief, as others wish to speak. The Osborn strategy—I hope that the Government will accept it—is a personal strategy. I believe that hon. Members on the Conservative side, with industry and the power industry, must look at the alternatives. I should like to see a build-up of nuclear and alternative sources of electricity supply and preparation to use it, even if it is a vehicle for bringing in hydrogen—as a possible energy carrier. The Government and the EEC—Council of Ministers, Commission and Parliament—must evolve a flexible long-term strategy with industry to allow new technologies to provide the energy and energy carrier of tomorrow. But security of energy supplies is a priority.

Great Britain, vis-a-vis the Community, needs to import food. If the EEC is to have greater interdependence, it must come from the Community. The EEC has to import raw materials. The geographical and economic circumstances of the EEC mean that they must come from other countries. Britain could pay for these imports by becoming the powerhouse of Europe. That would provide employment, which the country will need to an increasing extent for our people, and would provide the energy carrier for tomorrow.

The Secretary of State is aware, as he said in his speech, that Britain can take the lead. I believe that time is running out. It is possible for Britain to extend a hand to our European partners, and together the Community can solve the problems of Europe and achieve greater independence.

4.39 pm

I join other hon. Members in congratulating the hon. Member for East Grinstead (Mr. Johnson Smith) on raising this topic for debate.

The hon. Member for Sheffield, Hallam (Mr. Osborn) will not be surprised that I disagree with him fundamentally on the basis of his analysis. No issue divides us more in terms of market straategy than meeting future energy needs. No issue shows the fallacy of the market-orientated Friedmanite policy of the Government more than the meeting of future energy needs for this nation and for other nations. The oil companies do not believe in the free operation of the market. They never have done, and it is unlikely that they ever will.

I had some regard for the Secretary of State for Energy until I heard him speak at an Institute of Petroleum dinner. At that gathering he dished up—in some respects he spoilt an excellent meal and an excellent occasion—a lecture on the virtues of the Government's market-oriented policy, saying how good it was for us all to accept the dictates of the market. The right hon. Gentleman said that it would do us good, because we should all suffer. He may be a masochist, but consumers are not necessarily masochistic.

It is right for the Government and the Opposition to try to bring home to the electorate the severity not of our position in particular but of the world's position, our relationship to that position, and the relationship of our oil industry to the world's oil prospects.

Oil is an example of the fallacy of the market strategy. The world is faced with the operations of the OPEC cartel. For good reasons or for bad, we have to face the operations of that cartel when it is operating in a declining market or in a market of stringency. Western industrial nations suffered in 1973. More recently they have suffered because of the Iranian crisis. We have suffered increased oil prices. The Government have reacted by suggesting to the BNOC that it should follow the market and not be market leaders. That has been reflected in pricing and taxation policies. There is the potential for huge revenues to be enjoyed by Her Majesty's Government. That will give the Government the potentiality to relieve much of the public sector borrowing requirement problem. That is not the operation of the market; that is the operation of intervention.

The Labour Party has suggested other instruments, and the Labour Government created other instruments of intervention. The hon. Member for Hallam does not like one of those instruments, namely, the BNOC. Would we as a nation have been able to know as much as we now know about the operations of the oil companies if we had not created the BNOC?

The BNOC is a regulatory body, and I accept that we need regulatory bodies. They are needed even in the United States and in Britain. In that respect the BNOC has an important role. No doubt my right hon. Friend the Secretary of State will be making a statement about that. However, the fact that the BNOC is involved in regulation and production and is in competition with others has curtailed the interest of other parties. They have been less ready to share their interests with a body that has advantages because of its regulatory privileges. The BNOC as a concept has been a disaster. I hope that my right hon. Friend will reverse the concept. However, I accept that regulation is important.

There is no evidence on which to base the hon. Gentleman's assertion. However, if I accept the assertion, the Government's policy of removing the advisory role, and partly the regulatory role, from the corporation has removed some of the criticism that he advances. If the Government privatise the exploration and production side of the BNOC they will meet with the wholehearted opposition of my right hon. and hon. Friends and of others outside the House.

We are not moralising about right and wrong; we are trying to indicate a future energy policy. If we are to take the people with us we shall have to accept that the people require some information, some safeguards and some security. There is no point in Conservative Members accusing the Opposition of being doctrinaire and embarking on policies for doctrinaire reasons when in government. They cannot make that accusation when the suggestion is that they are to dismantle an important public arm of information and the searchlight of public accountability. If they do that they will do it for no reason. No oil company desires that course of action.

Is there a Conservative Member who can name one oil company that thinks that the corporation should be privatised now? I am willing to give way to any Front Bench spokesman or to any Back Bencher. It seems that no one wishes to intervene. As I have said, if the Tories embark upon that dismantling they will be embarking upon an extremely doctrinaire policy, which the Opposition will resist. I shall be in favour of bringing the corporation back into public ownership.

The British people demand some assurances about the exploitation of an important and finite resource I turn to the importance in the short term—not in the longer and medium terms—of the Government's depletion policy in our consideration of future energy needs. We shall shortly reach self-sufficiency in oil. In a few years' time we shall be producing in excess of self-sufficiency. However, present prospects indicate that that will be for only a few years. Present forecasts indicate that self-sufficiency will account for about two and a half years of United Kingdom internal consumption. What is done during that period will be crucial. Self-sufficiency will be crucial in buying time with the swing fuel, namely oil. We shall have to buy time to cater for future energy needs. We shall have to buy time for wind and water power, and perhaps solar power. We shall have to buy time for a future nuclear energy strategy. We shall have to buy time for conservation. It is important to obtain answers from the Government.

Would the hon. Gentleman like to see the policies that he is advocating pursued by the Government of Saudi Arabia? If the Saudis adopt that policy, what consequences does he envisage?

That is a good debating point. If the Saudi Arabian Government decided to reduce oil production from about 10 million barrels to 5 million or 4 million barrels we should have something in hand. If we pursue maximum production we shall have nothing in hand.

I have suggested throughout that we should do deals with the producing countries. We are in an extremely favourable position as an honest broker. That does not prevent our leaning on the oil companies, and having an instrument to employ to enable us to lean on the companies, to ensure that our depletion policy is implemented. If the Minister suggests that we should do nothing about a depletion policy—that we should accept various assurances and do nothing about pushing the hump in the curve into the future—I shall be extremely disappointed.

I turn to another example of the fallacy of relying on the market strategy. We are about four years behind in the gas gathering system. We have flared gas unnecessarily. I am aware of the production and technological constraints. However, we are about four years behind our competitors because of the difficulties in bringing competing oil companies together. The Government have been laggards in persuading those concerned that it is in the national interest to create a transmission system spinally to link the smaller fields in the northern section of the North Sea.

Does not the hon. Gentleman accept that the real reason why we do not have a gas gathering line is that Governments have been too reluctant to allow the market price of gas to rise so that it would have become worth while for the gas to be brought ashore and marketed rather than burnt?

No matter which way we take it, that is Government intervention. I am in favour of a Government intervening in terms of the price of energy. The trouble with this Government is that they do not intervene in market terms only; they intervene—not for the sake of energy—to suit their PSBR arrangements. Perhaps the hon. Member for Derbyshire, South-East (Mr. Rost) is delighted to have it both ways, but it would not be right for me to allow him to have it both ways. In order to meet our energy needs the country requires substantial Government intervention and underwriting. An important ingredient in terms of future energy needs is to know our reserves of North Sea oil and gas. We are about three years behind in the deep drilling programme. Again, it would require Government intervention to step up the programme.

Perhaps it is the previous Government's fault. I do not deny that. Government intervention is required to get that done.

Does the hon. Gentleman believe that the oil companies would go ahead and do it on their own? The oil companies would require to know the licensing system and the conditions that will apply if and when the blocks are allocated. The whole matter requires Government intervention to put it together.

There is no point in arguing that we can solve our future energy needs on the basis of the market. The Friedmanite analysis does not work here. We are trying to call into creative knowledge an area of demand that the consumer cannot demand now because the creation of it will be X years ahead.

I shall not give way to the hon. Gentleman. I have given way sufficiently.

I have no doubt that the hon. Gentleman has a good point, which the House will hear when he makes his own speech.

I turn to the subject of another swing fuel. No doubt hon. Members will have noted the speech made by Mr. Peter Baxendell of Shell, when he was talking about coal. Particular attention should be paid to that speech, not just because of our indigenous resources of coal on land but, as the hon. Member for Sheffield, Hallam indicated, because there are possibilities, far into the future, of exploiting coal from the North Sea. I do not know what the Government's policy is on this matter. I know that there are constraints of time and the Minister of State said that he would write to me on several issues. I have not had a reply so far. If we are to conserve oil for particular requirements that cannot be met by other fuels, we will need to gasify coal for petrochemical and other products. That is far into the future and, with respect to Conservative Members, the decisions have to be made by the Government setting down the broad outlines of the strategy—not every detail—intervening and giving back. If we had taken the market mechanism system to the extreme we would have closed virtually every pit in Scotland in the 1960s. We came near to doing that under Governments of both parties.

Finally, let me attack the bogus view of the market. The best miners are miners' sons. They are not created overnight by the market mechanism. People are not inspired to go into mining by the destruction of the sociological pattern of villages and communities. That is a vital ingredient, which cannot be assessed in market terms. If any Conservative Member wants me to give way on that issue I shall do so. Miners go down into the bowels of the earth because they are part of a team, and the sociology of that is not measurable in pounds, shillings and pence—I talk in the older currency.

Therefore, if we are looking for an energy strategy we must convince our people that the world is constrained. The OPEC countries in particular are saying "You will not get our oil on the previous basis. We are suspicious of the operation of the multinational oil companies and, therefore, deals must be done Government-to-Government." We must persuade our people to conserve energy. Again, that means Government intervention in terms of insulation, and so on. We have to persuade our people that the resources are finite. We have to persuade not only our people but those in the European Community and in the United States. Thanks to the misuse of the market mechanism in the United States, that country's use of energy has been profligate.

What has destroyed the energy equation in the United States has been the interference by Government in establishing regulations on pricing which have prevented the market from operating and lifting prices to the correct level.

I have a certain sympathy for that argument, particularly in relation to natural gas. I concede the point. However, the intervention of the Texas Railroad Commission was a useful method of establishing a regulating authority. The plain fact is that the United States consumers take the view, in view of the history of that country, that there is an inexhaustible source of oil supply. We must try to dissuade them from that view, particularly in our discussions with the President of the United States. That requires an abhorrence of the market mechanism.

Therefore, we have to conserve, the Government have to intervene and set down a strategy and persuade the consumer that we have an energy strategy, part of which is to ensure at the end of the day that the rewards stemming from the natural resources will come to the people as a whole and will not be the profits of a few multinational companies.

4.58 pm

Those brave enough to forecast energy trends would do well to restrain their audacity and use a crystal ball. I regard myself as modest enough to offer only one assertion, and that is that there is no energy shortage, nor need there be, unless politicians meddle sufficiently to create one. There is no energy shortage, only a reluctance to pay the going price for what energy there is. There is no energy shortage, only a shortage of cheap energy. There is no, nor need there be any, energy shortage, but there is a great deal too much waste of energy.

We have the extraordinary scene in this country whereby millions of our people cannot afford enough energy to heat themselves to a decent standard and yet, within sight of their homes, we have a system of producing electricity whereby two- thirds of the fuel put into power stations is thrown away as surplus heat. That surplus heat produces a thermal efficiency of about 30 per cent. That is evidence, if ever there needs to be any, that there is no energy shortage, but a great deal of waste of energy.

The short contribution that I wish to make to this discussion is to present the case that one of our primary energy options should be to do something to eliminate that waste. Waste is the result of misguided political intervention, of subsidised pricing policies, and of a monopoly of bureaucratic and over-centralised planning that results in vast amounts of public money being misspent. Meanwhile, the needy go without heat.

I hope that those who have heard me speak ad nauseam on this subject before will forgive me if I promote yet again the most important energy option available. We must eliminate enormous waste in our system of electricity production, by developing more combined heat and power. That energy option has the greatest potential. It has far more potential than new energy sources such as those of solar, wind, wave and tidal power. Such sources of energy remain in the future and their costings are problematic. Combined heat and power is far more cost-effective over a period of time than the building of more nuclear power stations. I am not opposed to the nuclear programme. However, that programme should be continued in conjunction with the far less wasteful use of existing sources of energy.

The development of combined heat and power should be the first priority when considering capital investment. At present we are at the bottom of the European league in utilising reject heat from power stations. There is an enormous saving to be made. Heat, rather than electricity, is in demand at present, and one must consider the heat loads that could be marketed. We are stupid deliberately to frustrate this source of energy. Combined heat and power will provide the quickest addition to our resources. It is also the cheapest and most cost-effective form of investment.

About 60 million or 70 million tonnes of coal equivalent are now discarded from power stations. That is enough to heat every building in Britain. After years of study and deliberation we are now in receipt of Dr. Walter Marshall's report—Energy Paper No. 35—which was commissioned by the Government. It shows that combined heat and power is economical and technically practical, and it urges early action. It also shows that the rest of the world has been doing this for far longer than we have. We are botttom of the league, and we lag ever further behind because other countries are moving ahead at a faster rate. I know that my colleagues in the Department of Energy are more than sympathetic to the report. However, a memorandum from the Department shows that, in its estimation, combined heat and power will contribute only 2½ million tonnes of coal equivalent by the year 2000. That is extraordinary. That is to be compared with the potential 60 million to 70 million tonnes, and with the larger figure anticipated by the report.

If these issues are left to the Department of Energy, we shall remain at the bottom of the league. Millions of people will continue to suffer from lack of heat. Electricity and other forms of heating will price themselves out of the energy market. Heat will continue to be thrown out of cooling towers and into rivers. We should ask ourselves why we are bottom of the league, and why we have been so slow to develop combined heat and power. Some combined heat and power is used by industry because it realises that it is more economic to develop its own electricity and heat than to rely on that provided by nationalised industries.

About 8 per cent. of electricity and heat is produced by combined heat and power. In Germany, France and the Scandinavian countries about 20 per cent. to 40 per cent. of heat and electricity is produced in that way. Their progress has been more rapid. We are bottom of the league because there is a monopoly of electricity. The CEGB is not interested in selling heat. Why should it be? North Sea gas has also been a major restraint. It has been artificially underpriced. It is not sold at European market prices. It has therefore undermined the viability of the coal industry and the more efficient use of combined heat and power.

We lag behind also because politicians, those in charge of capital investment and those who give directives to nationalised industries have got their priorities wrong. We hope that some rethinking is now taking place. A short-sighted attitude exists. It is all right to invest huge sums of money in providing new energy sources. We are now embarking on a masssive new nuclear power programme, and I support that programme in the long term. It is often held that it is respectable to allocate huge sums of money for investment to increase our energy sources, yet improper for huge—or even small—sums of money to be spent on energy conservation, even if it is more cost-effective than building new sources.

Governments, nationalised industries and our over-institutionalised system tend to regard investment in new power stations, coal mines or North Sea oil and gas as useful and essential. I do not quarrel with that. However, why do they not consider it equally useful and essential to invest in marketing heat? Any such investment is downgraded and is referred to as a subsidy. It therefore becomes unacceptable. I do not regard investment in combined heat and power as a subsidy. The Marshall report has proved my point.

No energy strategy could produce better results or be of more advantage to the economy over a short term than combined heat and power. However, the idea has not been put into practice because no one organisation is responsible for building up a system of heat distribution. We know that the gas industry has to produce pipelines in order to sell gas. The water industry has to build and lay pipes in order to sell water. The telephone system has to lay wires in order to sell telephones. The electricity industry has to lay a grid in order to sell electricity. But there is no co-ordinated organisation to produce a heat grid. As a result, heat is thrown away. It is not sent where it is needed, and where it could provide a cheap form of energy.

Combined heat and power is expanding rapidly in some countries, primarily because of co-operation between the electricity utilities, local authorities and Governments in providing a heat grid. In those countries it is accepted that investment in that form of conservation provides a new source of energy which is at present wasted and which is more cost-effective than investing in other new forms of energy. If combined heat and power had been developed in Britain as part of our national energy strategy we should have had the co-operation of the utilities which are at present responsible for the energy industries. We should not then have had such a disproportionately unbalanced energy market. For example, the gas industry would not have taken such a large slice and the electricity industry would not have suffered as a result.

The arguments against combined heat and power come mainly from the vested interests, which refuse to look abroad to see what is happening there, and why. One of the arguments is that combined heat and power does not give the consumer a choice, that one would have to take hot water as a heating system or do without. That is nonsense. The consumer will always choose the energy which is the most economic for himself. That is why the consumer is switching to gas. If hot water is piped to a road, the consumer will take that hot water because it will be the cheapest form of heat. That will be the consumer's choice.

There are arguments about pollution, construction upheaval and the cost. Of course it is costly, as are most other forms of energy investment. The comparisons that are often made about the cost of harnessing heat from our power stations are totally misleading. The cost of piping the heat for district heating and industry should be compared with the costs of building new power stations to achieve the same energy benefit. Such a comparison is never made. A proper cost comparison would show that it would be more economical to convert some of the smaller city centre power stations which are being abandoned and scrapped as rapidly as the CEGB can manage. Those power stations are ideal for conversion. Examples can be found in York and on the Isle of Wight.

The other comparison that is never made is that which involves the cost of cooling towers, which would not be necessary under the system that I favour. What is the cost in ill health for that proportion of the population who suffer from lack of heat? What is the cost of the heating allowances which the State must pay to those who cannot afford adequate heating? What is the cost of damage to buildings from damp and other problems that arise from inadequate heating? What is the cost of lost productivity from ill health and other problems caused by dismal standards of heating? Those costs are never taken into account.

I suggest that we should leave the energy debate unconcluded until a combined heat and power policy is considered to be a major option. We should convert older power stations and use the heat from the new power stations. The French are even planning to use the heat from their new nuclear power stations for district heating. Dr. Walter Marshall said that it would be grotesque to waste the heat from our nuclear power stations. It is not satisfactory for the CEGB to boast about being able to grow a few tomatoes with the hot water from Drax B power station. That is not good enough.

All over the world there are examples of combined heat and power being the most economical way to produce energy. It is almost always the most satisfying for the consumer. We should adopt the system here. We should take the lead from the EEC, which provides grants, and where progress is more rapid.

This is an urgent priority, because the scale of energy savings is so enormous and the investment could be so cost-effective. It could make an enormous contribution in the long term to saving oil burn. It could help to make us energy self-sufficient in Europe and provide relatively inexpensive heat for those who need it most and can afford it least.

Unless we convert our energy more efficiently we shall become less and less competitive as a nation, because the costs of production will increasingly be affected by the cost of energy. Above all, the vital argument is that of conservation. We do not know the solutions to our long-term energy stategy. We do not know whether the new energies will come, or at what price. We do not know whether the nuclear programme will succeed, be adequate or be safe. Until we know those answers, and until we can provide the alternative energies for when we have to phase out oil and gas, our only strategy must be conservation, because that will give us the time that we may need. For that reason, if for no other, it is time that the Government gave a serious lead. They should remove the disincentives and ensure that we move a little way up the league table.

5.17 pm

It is a pleasure to follow the speech of the hon. Member for Derbyshire, South-East (Mr. Rost). In the years that I have been a Member of the House, rarely have I listened to a speech with which I agreed so much. I hope that I shall not bore the Minister—if I do I shall not worry—but I intend to make a similar speech to emphasise the argument.

I congratulate the hon. Member for East Grinstead (Mr. Johnson Smith). He wants the Government to advocate a clear strategy which the British people can understand. Not many of us would vote against that, although we may argue about what the strategy should be. The hon. Member's argument boiled down to proposing a nuclear strategy. He paid lip-service to the alternatives.

I am not surprised that the nuclear solution appeals to the House, because it is the "grand solution." Politicians are always searching for the "grand solution", whether when controlling the money supply, amalgamating British Leyland or reorganising the steel industry. The "grand solution" for energy is the nuclear solution.

Several hon. Members have wondered why there is such opposition outside the House to nuclear power. It is interesting to reflect upon how many hon. Members are in the Chamber. In my experience, nuclear power is one of the few subjects which can attract substantial audiences in the hall and village. A discussion on nuclear power can attract 200 or more people. Few other subjects can achieve that. That was so in my constituency before the recent announcement. I suspect that we shall have some good meetings in the next few months. The announcement has served to concentrate the mind marvellously.

The House should not underestimate the fear. It is difficult to quantify the danger, but nuclear power stations have a jackpot potential. The Three Mile Island incident did not as far as we know cause deaths, but it was a near thing. I am an engineer and my training and background are technical. I once ran a research and development department and I learnt what I called Murphy's law: if anything can go wrong, it will—twice. That was one of the experiences of working with engineering products in an area in which something new was being achieved.

I congratulate the engineers in America on preventing any deaths in the Three Mile Island incident. But we must take the obvious warning—that this was a desparately close call, and if we do not accept that, we are not being realistic.

My area is being considered, among others, for a nuclear power station. One cannot help but reflect on local opinion on this matter. People ask me why a station this size is being proposed in such an isolated area. That goes for all five sites in Cornwall and Dorset, which are all isolated. There may be a village near by, but there are no substantial pockets of population anywhere near them. I suspect that that is because those who have responsibility for drawing up the rules and regulations for safety standards know full well that there is a jackpot accident potential. Therefore, the feeling is that if these stations are located in Cornwall or Caithness, and an accident happens, it will not cause so much damage. That may be so. That may give great consolation to Ministers or to people who live in London, but it does not make the people who live in Cornwall feel one iota safer.

I must demonstrate to the House the peculiar recommendation that has been proposed for my area. It has been suggested that a 1,350 megawatt reactor should be built in Cornwall. That figure means little to most people, but it is probably more than three times the peak power consumption ever known in Cornwall on any night. Cornwall has never consumed more than 400 megawatts in one night, yet now we are talking about 1,350 megawatts. Therefore, it is rather ludicrous for hon. Members to suggest that the only reason for a station being built in Cornwall is the need for more local power generation. I accept that there is a need for more local power generation. I accept that there is a need for more power generation in the South-West, but not of the order of 1,350 megawatts. That is a ludicrous argument.

The House knows my view about nuclear power. Fears are constantly expressed to me by my constituents, and those fears will never subside until the Government have the courage to tell us that these stations are so safe that one is to be built in Battersea, or, even more appropriately, in Finchley. The day that the Government are prepared to build a power station slap bang in the middle of one of the big built-up urban areas, I and others who represent rural areas will feel a great deal happier than we do now. However, I suspect that we are a long way from that position.

What are the alternatives? The most obvious is conservation, and this argument was brilliantly put by the hon. Member for Derbyshire, South-East. Clearly, by using the tax system, we can encourage people to use smaller cars. We should introduce a vehicle excise duty system which is inversely proportional to the car's fuel consumption performance. That would encourage people to buy smaller cars. Once a person has a powerful car, the way he drives it usually reflects his style of life, but if the car has not much power to begin with, clearly petrol will not be burnt up at such a rate.

Is the hon. Member aware that we have a rather daft system in the Civil Service whereby civil servants and local government officers are paid a bigger mileage allowance for a bigger car? What incentive is that to anyone to save energy?

The hon. Member is absolutely right. Also, for reasons which I have never understood, Members of Parliament get the highest allowance of all, regardless of the size of the car. [An HON. MEMBER: "That is not true".] I am disappointed that someone gets even more than we do. I believe that we should question the sanity of all this.

It has been argued today that looking for massive energy savings by way of better insulation is not appropriate in a free society. It has been suggested that to force somebody to insulate his house is not part of the free society for which we all campaign. I fail to comprehend that argument. If the consequence of givng a man that freedom means that he must have an enormous nuclear power station in his back garden in order to maintain his freedom, it is ridiculous. The Government could take far more powers than they have in this area. In fact they could do far more than they are doing without taking any powers of compulsion. All that they need are powers of encouragement.

Another way of ensuring some measure of conservation is to slow down our "throw-away" society. It has been said that we must save oil in order to manufacture plastics and other goods. Yet when I buy my son a present he has to remove three or four layers of plastic packaging material, which are all quickly thrown in the bin, before he can play with his toy. Is that the sort of production for which we are saving oil? Obviously there could be changes in the way we live which would reduce enormously the amount of fuel we use without substantially reducing our living standards.

I return to the point made by the hon. Member for Derbyshire, South-East. He referred to the thermal efficiency of our present system as being about one-third. That is true, and it is likely to remain so. Until the engineers and scientists discover a whole new generation of materials which can maintain their shape and size under pressures and stresses of which we have not previously dreamt, there is no way in which that efficiency can he increased. That is a basic engineering fact. We might take the average from 35 per cent. up to 38 or even 39 per cent., but no one can hope that the engineers can break through and achieve electricity generation of 65 or 70 per cent. unless they can produce a material with something like 20 times the maximum stress, strain and heat resistance of present-day materials. There is no obvious solution to that problem.

Therefore, we are stuck with a situation in which at least 6 tonnes of every 10 tonnes of coal mined will be thrown away or used to heat the rivers and the sky and keep the birds and the fish warm. We are spending more energy on keeping the fish and the birds healthy than on keeping ourselves healthy. Some people who write to me regularly would be in favour of that, but as birds and fish do not have the vote, there will not be many hon. Members who would take that line. If we could save half the energy that we are now throwing away we would have a heat saving equivalent of the total generating capacity of the CEGB. We would be talking about doubling the useful output of the CEGB.

I am worried that as a result of pressure from hon. Members the Government will come forward with a token scheme in which a few blocks of houses, or perhaps even one town, will be used for an experiment. Money will be invested so that the waste heat from power stations can be used to heat the houses, but only in a token scheme. I want to see a scheme which costs at least as much as one of these nuclear power stations which the Government are so keen to impose upon us. If they want to save money on one nuclear power station, they can save it on one which they propose to build in my constituency.

On the basic question of nuclear power, will the Minister bring us up to date on the problem of waste disposal? We should not build any more power stations until we have satisfactorily demonstrated that we have solved the waste disposal problems of nuclear energy. I have held that view for a considerable time and I am interested to know just how far we have come on this matter.

As a result of this motion, which I know will be passed overwhelmingly, will it be possible to include some information about the plutonium economy and its risks, and about fast breeder reactors and how we hope to build up ever-increasing stocks of plutonium and succeed in denying them to terrorists and the Third world, while maintaining their security for ever and a day? That is obviously what is implied when it is claimed that plutonium can be kept safe from people.

As most hon. Members taking part in this debate will know—I worry about those hon. Members who are not here—plutonium is a raw material for making atomic weapons. One of the strongest arguments against a tremendous world expansion of nuclear energy is the problem of plutonium. When the Government issue their discussion document so that the British people may join in this great debate, I hope that there will be a substantial and early chapter on the problems of plutonium and how we will deal with them.

5.30 pm

First of all I wish to examine the difficulties about making predictions about energy supply and demand. Secondly, I wish to evaluate some of the arguments put forward by the so-called low energy school, and, thirdly, I wish to say why I believe that Britain has no option but to proceed with the nuclear programme recently initiated by the Government. I reiterate the importance of removing some of the popular misconceptions about nuclear power that were illustrated so effectively by my hon. Friend the Member for East Grinstead (Mr. Johnson Smith), who initiated the debate.

It is difficult to make estimates about the demand for and supply of energy. Predictions about demand for energy are based on assumptions about two factors. The first is the rate of growth of our economy and the second concerns the amount of energy that we require to achieve a given level of economic activity—in other words, the efficiency with which we use our energy. One can see at once that those are both dangerous factors on which to make assumptions. Is there an hon. Member who is brave enough to predict our rate of growth between now and the end of the century? I doubt it. Can anyone tell how successful we