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Volume 124: debated on Monday 14 December 1987

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To ask the Secretary of State for Energy when he next expects to meet the chairman of the Central Electricity Generating Board; and what subjects he expects to discuss.

I meet Lord Marshall regularly to discuss a range of issues concerning the electricity supply industry.

When the Secretary of State next meets the chairman, will he say that the public liability insurance in respect of each nuclear plant of only £20 million is woefully inadequate? Will he tell him that, if the industry is privatised, it should make proper provision for this risk and not rely on the state to underwrite the risk, thereby giving a generous public subsidy to cover one of the major running costs of the industry?

The hon. Gentleman has raised an important point. There is a great deal of additional expenditure — far in excess of £20 million — to ensure that accidents do not take place. We set high standards of design, construction and operation. We have a Nuclear Inspectorate, which is wholly independent and has the right to license, or refuse to license, plants. We set a great deal of store by safety. The £20 million cover is cover of last resort. The real effort goes into making sure that it is never necessary.

When my right hon. Friend next speaks to the chairman, will he remind him, as the provider of cheap off-peak electricity, that that electricity is being taken up in Lancashire by only 6·2 per cent. of the population and that further promotion of cheap-rate electricity would assist those low-income categories who will have to bear the extra charges to which reference has been made in earlier questions?

I shall make sure that I make that point and that the area boards press hard the opportunities for taking off-peak electricity at very keen prices. I shall make sure also, as I have already done, that my Department runs a campaign to make elderly people aware of the possibilities that are available for saving energy and for using energy efficiently at little cost to themselves.

Before the Secretary of State meets the chairman, will he give a guarantee to the House that, unlike what happened with British Telecom—when both industries were fattened up before privatisation—if the electricity industry is privatised, the fattening-up process will not allow any Tory Member of Parliament or ex-Cabinet Minister to take on the job of non-executive or executive director of the privatised industry?

I note what the hon. Gentleman says, but I cannot give him that undertaking.

When my right hon. Friend meets the chairman, will he discuss the CEGB's ability to import coal freely? Will my right hon. Friend confirm that, if the CEGB were able to import coal freely, it would be able to meet the real rate of return on assets which he requires of it and that there would be no need for a price increase next April?

I should tell my hon. Friend that we dealt with this question a little earlier. I made the point that although it is possible to buy coal more cheaply from overseas, I doubt whether one could buy the quantities necessary to replace the coal produced by British Coal. We are approaching the problem the other way round. We are trying to help British Coal to make itself a modern, efficient and competitive supplier. We think that our coal reserves are a very important asset, which should be used properly.

Will the Secretary of State confirm that the members of the Central Electricity Generating Board are unanimously agreed that the transmission grid should not be separated from the generation of electricity? What does the right hon. Gentleman think of Lord Marshall's view that if the two were separated—whether in public or private ownership — the security of our electricity supply would be lowered and there would be a greater risk of blackouts?

It is true that the CEGB thinks that the grid should be retained by it and that we need an integrated system, whereby the CEGB controls the power stations and the grid. However, others in the industry do not think that that is essential. There is a strong body of opinion that argues that transmission should be separated from generation if one is to encourage private generators to come into transmission and competition in generation. We have not yet made a decision about those two arguments.