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Orders Of The Day

Volume 227: debated on Monday 28 June 1993

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Opposition Day


Thermal Oxide Reprocessing Plant

4.38 pm

I beg to move,

That this House believes that, as evidenced by the hardening of international opposition, there are increasingly strong economic, environmental and proliferation reasons why it would not be in the interests of the United Kingdom or the rest of the world for Her Majesty's Government to bring the thermal oxide reprocessing plant at Sellafield (THORP) into operation; notes that the last public inquiry into THORP took place more than fifteen years ago, since when all relevant circumstances have substantially changed; and therefore urges Her Majesty's Government to investigate and make public all relevant aspects of THORP and alternative processes for dealing with spent fuel including dry storage, to ensure full disclosure of the terms of all contracts for the use of THORP and of the calculations supporting its economic justification, and to ensure that all information is available for public comment, independent appraisal and proper cross-examination before any decision is taken.
In The Observer at the weekend, there was a three-line NIB—news in brief—entitled "Small Tremor". It stated:
"An earth tremor measuring 3·0 on the Richter scale hit south Cumbria and north Lancashire."
Perhaps it was the Almighty reacting to the fact that, for the first time in 15 years, there is to be a debate in the House on the future of THORP.

The thermal oxide reprocessing plant at Sellafield is a very important project. It was commissioned, and approval for it was sought, by British Nuclear Fuels plc back in the late 1970s. BNFL saw THORP as a means of treating partially used nuclear fuel, from home or abroad, from advanced gas-cooled reactors or light-water reactors and, by that reprocessing operation, separate out uranium and plutonium and separately place the waste.

The inspector who held the inquiry in the late 1970s was the very eminent judge, Mr. Justice Parker. It was very clear to him that he was making a decision based on the evidence at the time. It was clear to him that the evidence and circumstances might change and the matter might have to be reconsidered. From the beginning, it was clear that everyone who participated in the debate regarded the decision as conditional.

There were two debates on the matter, one very shortly after the other. The first debate was on a motion for the Adjournment of the House and it was initiated by the Government. The then Secretary of State for the Environment, the right hon. Member for Bethnal Green and Stepney (Mr. Shore) commended THORP to the House. During that debate, and in the debate in May 1978, many hon. Members on both sides of the House made the conditionality of the project clear.

The second debate was initiated by the then Leader of the Liberal party, my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel). He initiated the debate by praying against the order that provided planning permission for the Windscale proposal. He said:
"In my view, the arguments on both sides are finely balanced and contain many uncertainties. It is because of that that I believe the burden of proof ought to lie quite firmly on the side of those who are pressing this order and who argue that we should now be taking this firm step into the plutonium economy."
My right hon. Friend ended his speech by saying:
"This House has a straight choice between looking at the longer-term results of a decision that we take tonight against the undoubted economic value of the Japanese and other contracts which we could acquire. I believe that the onus must lie heavily on the Government, who have brought forward the order, to persuade us that we are wrong. If they do not persuade us beyond a reasonable doubt, it will be right to vote in favour of the order being withdrawn."—[Official Report, 15 May 1978; Vol. 950, c. 111–18.]
In the event, the order was approved by the House, though not without many hon. Members, including the present Secretary of State for Trade and Industry, making it very clear that it might not be, and should not be, the final decision on the matter.

Today's debate has produced great benefits. We have flushed out where other people stand. We have flushed out the Government's position which—there is general agreement on this—had been secret for several months. The Government received advice, as they were bound to under statute, several months ago. BNFL, the operators, and the opponents wanted to hear a decision about that. However, until the end of last week, not a peep was heard.

Not only have we forced the Government's hand today—and therefore I hope that today's debate is welcome, no matter what view people take on the issue—we have also flushed out two other things. We have flushed out an announcement, which has been made in the past hour, about how the Government intend to respond to the two reports that have been given to them. We have also flushed out the advice provided by the body that advises on radioactive material.

In addition, we have flushed out the Labour party's position. We have forced Labour's hand and it has made a decision. Labour is going to abstain, just as it did in respect of Maastricht—

Well, perhaps not all Labour Members. However, the official Labour position is that it is not for THORP and it is not against it. It is not for a public inquiry and it is not against one.

I challenge Labour Members to tell us what words in the motion they disagree with and why. I challenge them to tell us how, after all this time for deliberation, they cannot either endorse the project which they started in the 1970s or oppose it because circumstances have changed. As with Maastricht and income tax rises or public expenditure cuts, the Labour party is neither for them or against them. Yet again, the Labour party is sitting on the fence.

The hon. Gentleman is talking about flushing out the views and opinions of a variety of people, particularly hon. Members. Does he accept that the work force at Sellafield are one of the best-trained work forces in the country? Is he aware that he could have flushed out the view of that work force if he had been on College green at lunchtime when the work force made their views known? They want THORP to continue. They believe that it is safe. It is their work and they want it to be allowed to be commissioned.

Of course they do, and understandably so. My hon Friend the Member for Orkney and Shetland (Mr. Wallace) said last week that the workers at Rosyth wanted their work to continue, and, as the hon. Member for Rochford (Dr. Clark) will be aware, many miners wanted their work to continue last October and this March. However, at the end of the day, the Government and the Conservative party could not endorse that.

Of course the work force argued their case, and the hon. Member for Rochford has raised very proper concerns about that work force and their future in Cumbria which has significant unemployment, if not the highest in the country. I respect the view of the work force. I have spoken to some of the shop stewards and I hope to meet them again when I visit Sellafield in about 10 days' time. I have undertaken to meet the shop stewards and the work force as well as the management.

The hon. Member for Rochford is well versed in these matters and his point alludes also to the fact that there is a quite reasonable debate about the issue and an understandable and honest entitlement to a difference of view. Complex issues such as the general debate about nuclear power and about nuclear weapons, do not necessarily drive to a unanimous conclusion along party lines. People in the Conservative party hold different views about the desirability of THORP and about a public inquiry, as they do in the Labour party and in my party.

Hon Members such as the hon. Members for Workington (Mr. Campbell-Savours) and for Copeland (Dr. Cunningham) have proper constituency views and we would expect them to speak on the matter. Indeed, my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), who represents Dounreay, has made no secret of his views over the years. There is an honest disagreement of views.

Since my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale spoke in the late 1970s, it has been my party's policy to oppose THORP, because we were not persuaded about it, and to argue that the only basis for supporting reprocessing is when it is necessary on safety grounds. That was the position on which we went into the last general election and to which we are committed as a party.

I do not only take a constituency view: I am a believer in nuclear power.

I may have been unfair to the hon. Gentleman. I tried to make the point that there is a difference in respect of the fundamental issues and that hon. Members are quite properly entitled to take a constituency view. The hon. Member for Workington has argued his views. I hope that he welcomes the debate. as he and I were in a meeting recently when we were asked to try to facilitate such a debate and I have now provided that opportunity.

My colleagues and I do not intend—and it would be improper—for this to be a debate about the future of nuclear energy in Britain. That is a huge and wide subject. We may complain about the fact that we have not had such a debate. We do complain about the fact that the way in which we debate energy policy in this place is nothing short of mad and we complain that the logical sequence of events should not have been what we have seen, are seeing and are about to see: a debate on coal in the late autumn of 1992 and the spring of 1993; a debate about THORP today; a debate about the national Audit Office view on the economics of the nuclear industry before the Public Accounts Committee on Wednesday; a possible announcement about the nuclear review originally heralded to be made by the Minister for Energy at a meeting tomorrow night, although he will no doubt tell us that whether that will be the case, but certainly with a timetable envisaged to be announced before we break for the summer recess—

The Minister says no, so it will not. And there will be a debate about renewables some time later.

The only point that I want to make about the energy debate is that it is a mad system which does not look at Britain's strategic energy needs first and then decide what the implication is for each of the component parts—for example, whether we should have a nuclear industry, how much coal we should have, whether we should have opencast coal, and so on. [Interruption.] As my hon. Friend the Member for Orkney and Shetland says, having previously spoken on the subject while holding this brief for our party, it does not help when we have a Government who do not believe in an energy strategy.

Workers at Sellafield, like us and, indeed, the management at Sellafield, wish that the Government had had a clearer strategy on these matters for a long time. There is consensus that the way the Government are acting is no way to run a country, and, with or without the President of the Board of Trade present—we wish him a speedy recovery—it is certainly no way to decide an energy policy.

There is one obvious linked point. What happens at THORP and the contracts at THORP are relevant to the economic viability of nuclear power and nuclear energy. A very timely article in today's issue of The Guardian made that point very clear. I do no more than allude to part of that article, but it makes it very clear that there is a battle royal going on between BNFL on the one hand and Nuclear Electric and Scottish Nuclear on the other about who underwrites the risk. Unless we make that clear, it could make all the difference to the viability of the nuclear energy industry. Indeed, there is a strong argument from the nuclear energy industry to take the THORP equation—the reprocessing issue—out altogether. Some believe that they would be better served if that were not part of the equation.

Some of us were the guests of Robin Jeffrey and James Hann of Scottish Nuclear. We asked them, and they were quite clear that there was no animosity of any kind whatever along the lines that the hon. Gentleman suggests. [Interruption.]

As my hon. Friends say, they would say that, wouldn't they? The hon. Member for Linlithgow (Mr. Dalyell) is eminent in these matters. It is clearly a matter of controversy where the liability lies. One of the things that are apparent from the contracts as they were originally drafted and as they have been in the public domain—one criticism is that they are not generally in the public domain—is that it is not clear exactly where liability lies. The hon. Member for Linlithgow is entitled to challenge that point, and, if he is correct, I hope that the Government will tell us whether that matter has been resolved or whether there is still a dispute. The Minister is in a better position than anybody else to tell us that.

I am sorry to interrupt once again. That was said in the presence of the former Chairman of the Energy Select Committee, the hon. Member for Rochford (Dr. Clark). It was only 10 days ago. Frankly, the hon. Gentleman has to accept it.

I was making the point, with which the hon. Gentleman will agree, that the finances of the nuclear industry will be different if we include or exclude the prospective financial benefit to Britain of the THORP process. That is an uncontroversial point and I hope that the hon. Member for Linlithgow will accept it.

I will give way one more time and then I want to make the substantive part of my speech.

At the time of the Parker inquiry, I had the privilege to represent Workington, and I am also a member of the Public Accounts Committee. Leaving to one side the aspect that it could cost 2,000 jobs and the cost of£2 billion, I hope that, when the hon. Gentleman does his economic calculations, he will take into account the compensation that this country might have to pay if we do not go ahead with the THORP process: that has been estimated at£5 billion. [Interruption.]

That would be a very good point if, as the hon. Member for Carmarthen (Mr. Williams) says, we had seen the contracts. If the contracts were in the public domain, as the Government committed themselves to doing at Rio in respect of environmental information, we could see the compensation clause. With respect, as someone whose job used to be commercial contracts before I came to this place, I know that what they do and do not include is highly relevant, and they can make a difference of billions of pounds; but they are not in the public domain and until they are the figures will be speculative. Also, it is not acceptable for Parliament to accept the view only of BNFL, which clearly has a vested interest, as the hon. Gentleman will accept.

I made the point that I am a member of the Public Accounts Committee. The report came forward with the endorsement of the National Audit Office. Is the hon. Gentleman calling into account the National Audit Office's integrity on this matter?

The National Audit Office, as the hon. Gentleman knows, has just produced a report which is to go to the Public Accounts Committee on Wednesday. It makes it clear that the costs of decommissioning are uncertain, to put it neutrally, and it certainly does not endorse the figures that have been put forward by BNFL and others. In answer to the point about the Committee's earlier report, what is not clear—the NAO did not say that it was clear—is what the automatic compensation entitlement would be.

I will tell the hon. Gentleman why it is not clear. First, it is not clear in what form the waste might be able to be sent back within the contract. There is a debate about substitution, and I shall refer to the Radioactive Waste Management Advisory Committee report in a minute. Secondly, it is also not clear whether the contract would be fulfilled if BNFL—Britain—held on to the waste and put it into dry storage as opposed to reprocessing it.

There are many ways in which the contract might be able to be honoured without any compensation having to be paid. As the former hon. Member for the relevant seat, the hon. Member for Hertfordshire, South-West (Mr. Page) might like to persuade the chairman of BNFL to give us a copy of the contract. We could all then take legal advice and we would all be the wiser. I hope that the hon. Gentleman will use his good offices—

No, I do not know what is coming. I have given way once. I anticipate that the hon. Gentleman will be called if he catches your eye, Mr. Deputy Speaker.

I am certainly not frit. We put the subject on the agenda, for heaven's sake.

Because I have even better points to make. and I am about to make them.

In our motion, we make one general point and three specific points, and we call for one specific conclusion. We make the general point that there is growing international opposition to the reprocessing of spent fuel in a way that increases the amount of uranium and plutonium in the world. My hon. and learned Friend for Fife, North-East (Mr. Campbell) will address that matter, too. It is very clear that, over 10 years, the process will add about 60 extra tonnes to the global plutonium surplus of which there is already plenty.

I cite nothing less than the most radical and non-Conservative document, The Economist, and an article written only earlier this month. It is clear that the risk of proliferation, particularly in the former Soviet states, is now considerable and that article argues strongly against it. Not only the Administration in the United States but two senior members of Congress are now putting into Congress Bills a provision to make sure that there is a control that could, at the time of the renewal of the non-proliferation treaty in 1995, actually make the THORP process illegal. I ask the Minister to address that matter. When the Euratom treaty is renegotiated, the process itself may offend against international law.

There is that growing international opposition, but there is growing international opposition much nearer home. Earlier this month, in Berlin, the member states of the Paris commission on prevention of marine pollution from land based sources met to consider what to do about the Sellafield plant. By a majority of nine to two, including four countries that have customers of BNFL within their borders, they voted, including other matters, to request
"information on the need for spent fuel reprocessing …"
a full environmental impact assessment;
"the demonstration that the…discharges are based upon the use of the Best Available Techniques"
and that they be consulted before THORP goes ahead. Only in the past fortnight, a motion was tabled in the European Parliament asking for a public inquiry.

There is increasing evidence in Japan—one of the big customers—that there is growing public discontent. That is not answered by a newspaper advertisement this week, which appeared to answer the protest from the Japanese last week. We discover that the advertisment was placed not only by the Japanese utilities but, apparently, in association with BNFL. That is hardly an impartial response. Finally, it is only one year ago this month that the Prime Minister signed us up to principles in Rio, especially article 10 of the Rio declaration which stated that we were committed to full environmental information.

There is growing international concern, and I break it into three areas—I can only be brief, because the debate obviously must allow hon. Members fully to participate. Those three areas are economic, environmental and proliferation. I have alluded to proliferation and I do not intend to elaborate on that now. It is a fairly obvious point that if a process produces uranium and plutonium, and that plutonium is available to be used, even though there may be legal constraints for nuclear weapons, one has increased the danger of nuclear escalation in the world.

I shall deal with the economic point. The figures are difficult to work out because we have not seen the contracts and the market for the product is not nearly as buoyant as it was in 1978. They are also difficult to work out, because, although there may be contracts for the next 10 years, THORP is meant to have a life of about 25 years, and considerable extra costs of decommissioning are added once one starts to operate the plant.

A lot of money has been spent on building the plant and getting it ready for operation, but there is a history of white elephants in Britain and other countries The argument is not how much we have spent and whether we can afford not to go on, but whether it is the wonderful earner economically for Britain, that BNFL has told us that it will be. Unless the figures are in the public domain and can be examined, and people can cross-examine on them, the economic case cannot be clearly made out.

An important part of the economic case relates to jobs. It is not clear how many jobs at Sellafield might be at risk. I accept that it is in the order of between 1,500 and 2,500. Any job lost is a job that one certainly should try to preserve. I tell the people of Cumbria directly that those of us who advance this argument do not do so with no care whether people should have work—I say that as the Member representing a constituency with double or more the unemployment level of either Workington or Copeland—but we ask whether there is an acceptable alternative.

Well validated figures suggest that, if we take the dry storage option, which is much less environmentally damaging, we could have many more jobs on that site than we would have through the reprocessing option. We could have many more jobs and many less dangerous ones. That is another question which needs to be examined, because some people have been taken on ready for the site to be up and running and will be laid off in any event as they will probably not be able to be kept in construction or operating jobs in the interim period if there is further delay, as the Government announced today that there will be.

More importantly, one must distinguish between the number of people whose jobs will be operating such a plant and the prospective thousands of jobs that there would be over a period of up to 10 years in constructing a dry storage facility to honour our international obligations or national contracts. In all probability, according to much of the evidence, such a facility would give much more work than is currently envisaged for West Cumbria or Sellafield in particular.

The hon. Gentleman has asked for a lot of evidence relating to contracts and other matters. Can he outline his evidence that suggests that a dry store facility would employ more people than the reprocessing plant? On top of that, can he tell us what one does when one has stored the specific materials for some time? Is he suggesting that the materials should be stored for ever?

I shall deal with the first question first. Many people have done studies of the alternative job implications for a dry storage facility. I have taken advice from at least three sources about what the alternatives would be. I shall give the hon. Gentleman the best answer that I can now, and I will be happy to pursue the matter with him later.

In option 1, commissioning THORP—the proposal supported by the Government—BNFL estimates that the number of jobs in the THORP division would be about 850, probably plus a few. Jobs related to the THORP operation but in the Magnox division would probably be in the order of 500. That is a total of 1,350. Abandoning THORP and building a dry storage facility, and management of it, would provide about 520 jobs plus about 500 support jobs and thousands of construction jobs in the foreseeable five years or more.

They are juggling around with my constituents—throwing them in the air.

We are absolutely not throwing the hon. Gentleman's constituents in the air—we are trying to give them much more long-term employment than they might get from a process that may have no takers at all in 10 years' time. [Interruption.] I quoted the former Chancellor of the Exchequer. We believe in long-term economic solutions, not short-term ones, and I hope that the hon. Gentleman's constituents agree.

I will finish my point, then answer the question. The third point is the environmental one. That point is made best by, first, a Minister writing in the last month and, secondly, a report that has come out only today.

The hon. Gentleman can bellow all he likes. I told him that I will answer his question but finish my point first. This is my speech for a change. We get many more chances to make speeches on subjects of our choosing than he does because of the unfairness of the system. However, that is an argument for elsewhere.

On 25 May, Baroness Cumberlege, an Under-Secretary of State for Health, endorsed by letter—I have a copy here—the comments of the committee that gives advice to the Government on the medical aspects of radiation in the environment. That committee considered the draft authorisations for discharges from Sellafield and said that it had not had adequate time to consider the discharges and was not satisfied that they were safe. The Minister explicitly set out the position almost exactly a month ago. She said:
"I attach a copy of the text of COMARE's response to the authorising Departments on this matter. The Department of Health, which was also invited to comment on the proposals, has endorsed COMARE's comments."
Only today, we have flushed out—this is another achievement of my hon. Friends and myself—the advice—[Laughter]—Conservative Members should not laugh. It is true.

I am grateful for that support from the hon. Gentleman. The advice of the Radioactive Waste Management Advisory Committee to the Government was in my tray at 3.15 pm today. It says:

"RWMAC had originally been requested to provide advice to the Secretary of State by July 1992 but was unable to meet this deadline because insufficient information was provided by BNFL…The advice submitted by RWMAC to the Secretary of State is not as comprehensive as RWMAC would have wished because information that was requested from BNFL is still outstanding."
Waste equivalence is an important point to do with substitution and the question whether it can be converted and compacted so that only the high level is sent back and the intermediate or low level is retained, or vice versa.
"The radiological basis chosen by BNFL for calculating waste equivalencies has not yet been agreed by BNFL and its overseas customers."
The RWMAC advised that until there is agreement between BNFL and its overseas customers on the technical basis of substitution, the BNFL substitution exercise should not be approved. That recommendation was made not 20 or 10 years ago, but today, 15 years after the plant was approved.

The RWMAC made two other points:
"The substitution scenario proposed by BNFL depends on the Nirex repository being available to accommodate the foreign intermediate-level waste and low-level waste resulting from the reprocessing by 2005 and is based on a best case return time of the ground water from the repository to the surface environment".
Nirex has said that the repository will not be commissioned before the year 2007 at the earliest and the RWMAC has said that waste is unlikely to be disposed of before 2010, if the repository is sited in Sellafield.

"As the site will not be available in 2005, it will be necessary to evaluate the implications for both the UK site currently used for the disposal of low-level waste"—
next door at Drigg—
"and for various interim ILW stores."
The RWMAC advised the Secretary of State that until the studies are complete, it was not in a position to be able to comment fully on the radiological and environmental impact for the United Kingdom of the introduction of substitution.

There is some final advice to BNFL that is relevant to the Government. The RWMAC also advises that BNFL should
"examine to case for the return of intermediate-level waste to determine whether the return of foreign waste in this form, rather than the return of equivalent quantities of vitrified high-level waste is viable."
The RWMAC suggests that BNFL should
"document its case demonstrating that retention of foreign intermediate-level waste resulting from reprocessing will not cause health or safety concerns to the UK population.…There should be a trial return of high-level waste."
The RWMAC advice sets out a number of issues which the committee believes needs to be addressed by BNFL and the Government before the substitution of high-level waste by intermediate and low-level waste should be approved. The RWMAC
"looks forward to receiving this additional information and at that time would hope to be in a position where it could advise more fully on the BNFL proposals for substitution".
That is not scaremongering from political parties, but information from the Government's official advisers on the medical effects of radiation, endorsed by Health Ministers, and information from the relevant advisory committee which says that it does not have the facts.

Not long ago, the controversial proposal for Torness in Scotland was the subject of a public inquiry. The inspector made it clear in his report that dry storage was not only a possible option and a viable option, but a reasonable alternative option. My friends in Scotland, who have campaigned for many years against the Torness plant, would agree that as it now appears that Government policy—on the advice of inspectors—is not universally and unilaterally in favour of reprocessing, but considers that there is an alternative, the entire logic of THORP is questionable.

Is the hon. Gentleman aware, when he quotes the numbers of jobs that would be available in dry storage, that, at the recent public inquiry into the proposed dry storage at Torness, Scottish Nuclear Ltd. said that the store would require only 10 to 15 staff during loading and that thereafter, staff requirements would reduce to those required for occasional monitoring and maintenance? In that light, how can the hon. Gentleman talk of 1,000 jobs in dry storage?

That would be a fair—[Interruption.] That would be a fair and relevant comparison if the size of the two plants were equivalent.

No. They are not equivalent. We know what the contracts currently placed for THORP are, and we know the contracting party and the amount of work involved. The hon. Gentleman quotes figures, which I quoted, for the far smaller element in the debate—maintenance of the dry storage operation—but has left out the amount of people needed for the construction.

Yes, but many of the jobs that have been created in Sellafield have been sub-contractors' jobs, for building.

We are talking about some long-term jobs. I agree with the hon. Gentleman that such facts need to be the subject of a public debate. That is why the Liberal Democrats are specifically proposing a public inquiry. It is no good the Minister laughing, because, by law, he may be obliged to hold one. He may not have been in the House—he is a contemporary of mine and I was not present either—in 1960, when the Radioactive Substances Act was passed. He may not have followed the amendment process to that Act in the Environmental Protection Act 1990.

Under sections 11 and 12 of the 1960 Act, it seems that there is a strong case that, once the reports have been given to his two right hon. Friends who are the determining authority—the Minister of Agriculture, Fisheries and Food and the Secretary of State for the Environment, for whom the inspector of Her Majesty's inspectorate of pollution acts—there is an obligation to consult on that report.

Surprise, surprise, today at last, the Government have responded to that request. In a written answer from the Secretary of State for the Environment to the hon. Member for Norwich, North (Mr. Thompson)—it may be a planted question—[HON. MEMBERS: "He is not here."] The hon. Gentleman is not here. The question was tabled a couple of days ago, and only after it was announced that we were having today's debate. The Secretary of State for the Environment said that he had received the report and that he and his colleague had considered it. He makes an earth-shattering proposal:
"My right hon. Friend and I propose that there should be a further round of consultation".
I pause to tell the workers in Cumbria that the Liberal Democrats are not saying that there should be further delay, but that the Government are saying that there should be a further round of consultation. In that consultation, the questions raised by the response to the HM IP draft authorisations should be considered. I might add that 108 local authorities, as respondents, are opposed to the operation of the plant.

The Secretary of State's officials are writing to BNFL seeking further information. The written answer continues:
"I shall make their reply available for public comment, together with other material. My right hon. Friend and I do not propose to take final decisions on the exercise of our functions under the Act until after this further consultation."
There we have it: the stories in the press were true. The Government were not going to make a decision. The arguments put to them, from advice given by leading counsel to Greenpeace among others, about the legal case, have resulted in the Government's agreeing that they have to have further consultation. They propose simply to write to BNFL, to seek information, and to make their reply available for public comment, together with unspecified other material. How on earth can there be an objective assessment of jobs, of the economics issue and the environmental issue, unless the people and their evidence are put in the public domain and cross-examined?

We do not want a long delay. There need not be one. Mr. Justice Parker's inquiry took 100 days. An inquiry could be held and a decision could be made before the end of the year, providing that the Government and the system move quickly. There would then be an up-to-date appraisal of the facts this year, as was suggested might be necessary in 1978.

One does not embark on a process that has hidden additional costs of decommissioning before the cost of doing that is known. One should evaluate the radiological impact and wait for the judgment of the case where families have brought an action against BNFL alleging that leukaemia results from discharges from Sellafield. I am reliably told that the judgment is likely by the autumn. One can get the facts. My hon. Friends and I put a simple proposition to the House. We want the facts, and we propose the most independent way in which to get them.

I shall answer the question that I was asked, and I shall then make the case for the Government to reconsider. I answer now the hon. Member for Linlithgow to whom I can show the figures, and I am happy to go through them with him. The best advice that I was given on the calculations for the job prospects was by Friends of the Earth, which did the first analysis, and by Media Natura, which did the second analysis. I also received advice from the third analysis, which was done on the basis of local research into job prospects in Cumbria. I can go through the documents with the hon. Member for Linlithgow. I have them here and they are available in the House this afternoon.

My hon. Friends and I believe that what the Government have not done by their answer is preclude the option of a public inquiry. The Government have not ruled out a public inquiry. It is a bit like the public expenditure review, in which nothing is ruled in and nothing is ruled out. There is still a chance for the Government to take that course. If they do not, they risk protracting the commissioning of THORP or the decision not to commission it even longer.

The Government know as well as I do that there is strong legal advice that, on the basis of planning guidance, of our obligations under the Rio convention, and, more explicitly, of the requirement for an environmental impact assessment for this project under the directive passed by the European Community in 1985, which is now law here, and, above all, of the Radioactive Substances Act 1960 and the Environmental Protection Act 1990, they have an obligation to ensure that the facts are put into the public domain. If the Government do not go down that road now, they will prejudice the very jobs that they seek to protect, they will risk the project that they support and, worse, they will allow Britain to go ahead with the development of a project which the rest of the world increasingly regards as undesirable and uneconomic.

We argue for jobs and sanity. We hope that the Government do not press their amendment. If they do, we hope that that is not their final word, because we believe that they are wrong.

5.21 pm

I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:

'congratulates the management and workforce of British Nuclear Fuels plc on the completion of its high technology thermal oxide reprocessing plant (THORP) for the reprocessing of spent nuclear fuel at Sellafield; welcomes the 3,000 jobs, mainly in the North West, which the plant supports; recognises that around 90 per cent. of its £1,850 million capital cost was spent with British industry; notes that the plant is needed to fulfil the customers' requirements for reprocessing, represented by contracts already won worth £9 billion; recalls that it is a major example of international inward investment which the chairmen of the ten Japanese nuclear power generators strongly endorsed last week; expresses confidence in the non-proliferation arrangements that underlie the plant's work for all the overseas customers; and, subject to receipt by BNFL of such consents as are required by law, supports the commissioning of the plant at the earliest practicable date.'.
The choice of debate today by the Liberal Democrat party is interesting. It can choose four half-days of debate this Session. Not for the Liberal Democrats a debate on the issues about which they claim to care really passionately. There is no debate about proportional representation. There is no debate about local income tax. There is no debate about the economy, nationally or locally. There is none of that.

What do they choose to debate? They choose to table a motion which, if passed, would lead directly to the loss of 3,000 jobs, net of dry storage considerations. If passed, the motion would lead to the closure of a high-technology plant. If passed, it would lead directly to a loss of confidence by overseas investors and by our major trading partners. That says a lot about the priorities of the Liberal Democrats.

Despite the length of the speech of the hon. Member for Southwark and Bermondsey (Mr. Hughes), I turn briefly to the general tone of his remarks. What did he do? He took a series of comments out of context. He deliberately misconstrued Government reports and responses. He relied extensively—as, to be fair, he admitted—on the briefing of such eminently objective organisations as Friends of the Earth. It was a pretty shoddy performance even by the standards of his own party.

Does the Minister agree that the most shoddy part of this afternoon's event was his own laughter at the suggestion of a public inquiry? Why does he find the idea of a public inquiry on this most important of issues funny?

It is instructive that the hon. Gentleman is the first to jump to the defence of the Liberal Democrats. Perhaps he should join the Liberal Democrats. The hon. Gentleman should reflect on this point. Is it not typical of the Liberal Democrats that they go at length into the difficulties of the issues? They put forward an analysis, bogus though it may be, and then come back with the magic solution—a public inquiry.

What do they want? Do they want government by public inquiry? That may make sense to the hon. Member for Southwark and Bermondsey, but he knows perfectly well that it does not make sense to Liberal Democrat Front-Bench Members—and, to the credit of the Labour party, it does not make sense to the Labour party either.

What the Labour party and the Conservative party want are firm decisions in accordance with the legal constraints and the legal framework within which we operate.

I welcome the chance to set the record straight today. In the past few months, a great deal has been said about THORP by unelected pressure groups and by people speaking at the prompting of such groups. My right hon. and hon. Friends may like to know that my right hon. Friend the Secretary of State for the Environment has today answered a question from my hon. Friend the Member for Norwich, North (Mr. Thompson). In that answer he outlines the steps that he and my right hon. Friend the Minister of Agriculture, Fisheries and Food are taking on BNFL's request for revised discharge authorisations for the Sellafield site. As the House knows, there are copies of the relevant answer in the Vote Office.

It is important that the hon. Member for Southwark and Bermondsey listens to this, because he went some way to misconstrue the answer, which explains that my right hon. Friends intend to undertake further consultation before—I stress the word "before"—taking final decisions on the authorisations. The answer states:
"the inspectorates have concluded that no points of substance have been raised that should cause them to reconsider the terms of the draft authorisations, save for some minor amendments/corrections. In their judgment, the provisions of the draft authorisations would effectively protect human health, the safety of the food chain, and the environment generally."

I am sure that the hon. Gentleman will repeat that point. I wish that the hon. Member for Southwark and Bermondsey had also referred to it in his remarks.

As the House would expect, in addressing the matter of the Sellafield discharge authorisations and their relevance to THORP, the Government are careful to ensure that their general functions in relation to the nuclear industry are properly distinguished from the specific statutory responsibilities of my right hon. Friends the Secretary of State for the Environment and the Minister of Agriculture, Fisheries and Food.

What Conservative Members say today does not constrain the statutory discretion of my right hon. Friends. They have to make their own decisions, although I am sure that they will take note of today's proceedings. It would be wrong to seek to constrain or to prejudge them in the exercise of their functions. Certainly nothing that I say should be construed as seeking to do so.

As this is an important issue, neither of us should quote selectively. I add to the quotation given by the Minister by quoting the third short paragraph. The answer says:

"However, a substantial number of the responses raised questions as to the justification for the operation of the thermal oxide reprocessing plant (THORP), and therefore whether that part of the site's total discharges arising from this plant should be allowed. Other respondents expressed their support for THORP. These questions were not dealt with by the inspectorate because of the wider issues raised."
That is one of the considerations. Logically, because it is also part of the answer which has led to the conclusion, there must be a further round of consultation.

Yes, of course those issues are relevant, and my right hon. Friends have to take into account the legal background against which they operate. They have made clear what the next steps will be. My right hon. Friend the Minister of Agriculture, Fisheries and Food and I do not propose to take final decisions on the exercise of our functions under Radioactive Substances Act 1960 until after this further consultation. There is no disagreement.

I should like to go back to the paragraph which says:

"However, a substantial number of the responses raised questions as to the justification of the operation of the thermal oxide reprocessing plant."
Why were these matters riot dealt with six or nine months ago? During the course of the consultations, such representations were received as early as January. Ministers knew in August or September that arguments about that aspect of the matter were being raised. Has there been a cock-up, preventing these matters from being dealt with? Did Ministers fail to give the right remit? Is that the cause of the delay?

:Bearing in mind the legal position of my right hon. Friends, I have to be careful in this area. Because of the judicial implications, the precise decision of my right hon. Friends is a matter that the hon. Gentleman should refer to them.

As one who is dismayed that there is not to be an announcement that THORP should go ahead straight away, without further consultation—as I believe it should—may I put two questions to the Minister? I am told by my right hon. Friend the Member for Copeland (Dr. Cunningham) that the delay is costing £2 million per week. Do the Government's own figures confirm that? Secondly, is i t true that compensation of up to £5,000 million could be claimed? That figure has been given in the debate already. Is it the Government's figure?

The estimate of £2 million per week was provided, I believe, by British Nuclear Fuels plc. I think that I can confirm that that is the company's figure.

There is no point in the hon. Gentleman's yelling, from a sedentary position, "What is the true figure?" The figure was provided by BNFL.

With regard to the £5,000 million to which the hon. Member for Linlithgow (Mr. Dalyell) referred, I understand that in certain scenarios, under the terms of the contract, compensation of that order could be due to BNFL's customers if THORP were cancelled and were never to go into operation. The Liberal party ought to stop and think about the consequences of urging such action.

That remark from the hon. Gentleman is a typical and classical cop-out, as he knows. He knows perfectly well that the summary of those contracts was made available at the inquiry a number of years ago.

One answer would be to let us see the contracts. However, there is another way. The Comptroller and Auditor General is an officer of Parliament. If he were prepared to look at the contracts and to assure us that his interpretation of them is the same as that of BNFL, would the Minister be prepared to accept his word?

Order. Several hon. Members, including the hon. Member for Workington (Mr. Campbell-Savours), are hoping to catch my eye during this debate. If these long interventions continue, the hon. Gentleman may not be successful.

I am rather enjoying being a spectator during my own speech.

There is today, I suspect, a sense of deja vu as we talk about THORP. In 1978 the two major parties in the House of Commons supported the construction of THORP, while the Liberals opposed it. Now, 14 years later, the plant has been built and is ready to operate, advance orders amounting to £9 billion have been placed and staff have been recruited and trained. Despite all this—despite the clear evidence of the success of the project—the Liberal party calls for a public inquiry.

Let me qualify what I have just said about the Liberal party's call for a public inquiry. There is a glaring omission from the list of names of those who have signed this motion. Where is the hon. Member for Caithness and Sutherland (Mr. Maclennan)? He is not even here to listen to the debate. Why is that? The hon. Gentleman understands the motion's implications for his constituents and for the nuclear industry. I believe—though, as he is a very discreet individual, I cannot know for sure—that he would rather absent himself from the debate than be forced to disassociate himself from the case being made by his hon. Friends.

In a short debate last December the hon. Member for Clackmannan (Mr. O'Neill) supported the plant, subject to the views of Her Majesty's inspectorate of pollution on the disharge authorisations. I am happy to agree with that approach. I agree also with the views of the director-general of the Confederation of British Industry who, when he visited the plant in May, said:
"The case for commissioning is an extremely strong one, and I have been very impressed with what I have seen and heard today."
I agree, too, with the author of a letter to the Financial Times which described BNFL and THORP as a flagship for Britain. The Liberal Democrats might do rather better if they listened rather more to that author—Sir Ian Wrigglesworth. The hon. Member for Southwark and Bermondsey (Mr. Hughes) raises his eyes to heaven. How typical that is. A former leading and very widely respected member of his party has now stated his view very publicly, but the hon. Gentleman dismisses it with a lift of his eyes to heaven, as though it were of no account whatever.

The hon. Gentleman is a Minister now, and not a member of the Cambridge union, as he was when I first met him. That being the case, he should rise above such an approach. I stated explicitly that on this issue there is proper, honest dissent in all parties. Unlike the hon. Gentleman's party, my party has conferences and debates. We take decisions by majorities. I have enunciated the policy of my party. I do not dismiss Sir Ian Wrigglesworth's views or those of my hon. Friend. I was honest enough to admit that there is a difference of view, and to suggest that politicians may know less than inspectors at independent inquiries.

I would have rather more respect for the hon. Gentleman's views if he had bothered to visit the plant, as the hon. Member for Clackmannan and I have done. The hon. Gentleman subscribed to the manifesto and has drafted this motion. He has been throwing people's jobs in the air as though they mattered not at all, but he has not bothered to go to the plant. He does not have the guts to go and see for himself. What is more, he has been invited.

And accepted. That is typical. The hon. Gentleman will go there after subscribing to the Liberal party's manifesto and mounting this debate. He will sneak up there, and I suppose that he will go round the plant and say that his view has not been changed. I challenge him to give some of his time to the work force. Let him have a talk with the unions. Let him argue his case.

I have on numerous occasions met the BNFL unions, as the hon. Member for Workington (Mr. Campbell-Savours) knows perfectly well. I should like to hear the hon. Member for Southwark and Bermondsey argue how other people's jobs are to be redistributed round the economy. Let him explain the advantages to the skilled workers—how they would be employed in dry storage. Let him for once expose himself to the difficulty of making decisions.

The Minister does not listen. I said in my speech that I had accepted the invitation before the motion was tabled and before I knew that there was to be a debate. I also said that I had had some discussions with the work force and the management and that I had agreed to have more. There are more people unemployed in my constituency than in that of the Minister. I do not throw jobs around, but the Minister condemned 30,000 miners to lose their jobs. We did not do that.

I look forward to the hon. Gentleman's report of his meeting with the unions at BNFL and to his seeing the THORP plant, after which I hope that he will reflect carefully on his position.

I am willing to give way, but I am conscious of the time and the fact that other hon. Members wish to speak.

I am grateful to the Minister for allowing me to express the view from the other side of the Irish sea. All Northern Ireland Members are concerned about the effects of THORP on the Irish sea. I impress on the Minister the fact that few people in Northern Ireland will be satisfied or will have their concerns allayed until every fact is known and every possible safeguard is put in place.

I am aware of that concern. I assure the right hon. Gentleman that, under section 37 of the Euratom treaty arrangements, proper investigation has been carried out into the radiation effects of THORP. I think that the right hon. Gentleman is aware of the scientific findings, which should alleviate concern on the other side of the Irish sea.

The plant has been completed and all those who have seen it have been greatly impressed, not only by the plant but by the commitment of the work force and its preoccupation with safety. The hon. Member for Clackmannan spoke about that. There has been much debate about the importance to the area of the 3,000 jobs which flow from and are associated with the plant. Some 2,000 of those jobs are in west Cumbria alone.

The plant was built to meet the needs of its proven United Kingdom and overseas customers. Those needs are not customer aspirations but binding contracts totalling £9 billion, and half the contracts are from overseas. That in itself is a major export achievement by BNFL. In addition, THORP is a major example of inward investment. Some £1.6 billion has been advanced by overseas customers towards the capital cost of the plant, and £1 billion of that came from Japanese customers. The Government greatly value the long-standing nuclear co-operation between this country and Japan which made that investment possible.

May I confirm that there is no reason whatever why the debate cannot continue until 10 o'clock and that only custom and convention limit it to 7 o'clock? That is my information from the Clerk, so we are not short of time. Does the Minister recall the occasion on which he and I spoke from the platform of the Trade Unions for Safe Nuclear Energy, under the chairmanship of Bill Morgan of the Amalgamated Engineering Union? The Minister said at that time that general relations with Japan were affected by the THORP decision. Will he expand on that important matter?

The hon. Gentleman's initial point is a matter for the business managers. I remember the event that the hon. Gentleman mentions, and I look forward to speaking again at the union's annual dinner later this year. On the occasion to which the hon. Gentleman refers, I spoke about the major inward investment by the Japanese and said that the plant was probably the single largest export element of our trade with Japan. I said that, if there were serious problems about the start-up of that plant, it would almost inevitably have implications for Japan's perception of the United Kingdom as a trading partner and as a place in which to invest.

Some hon. Members have argued that somehow those major customers of THORP were misguided to enter into these contracts, which are inappropriate. If there was ever any truth in that allegation, it has been completely disproved by the advertisements in The Times on Wednesday by the 10 Japanese electric power companies—[ Interruption.] The hon. Member for Linlithgow (Mr. Dalyell) seems to dismiss that on the grounds that in some way BNFL was associated with that advertisement.

Does the hon. Gentleman think that the chairmen of the major electricity generating companies in Japan would append their names to an advertisement just because somebody wanted to organise it? Of course not. They must have considered the matter extremely carefully and would have wanted to make a clear statement of their views because people such as the hon. Gentleman and the Liberal party were misconstruing their stance. Those Japanese companies felt that it was time to make their views clear.

As the Government have made clear, it is for the owners of spent nuclear fuel to make the commercial decision about whether to reprocess. In recent months, various pressure groups have been telling the world that those customers are somehow wrong and that they should not want the reprocessing. Some of the pressure groups have gone so far as to suggest that BNFL should take the initiative and tell its customers that their choice is wrong.

What sort of business practice is that? It is rather like telling customers in a car showroom that it is immoral to buy a car and that it would be better to ride out of the showroom on a bicycle. Such a policy may be appropriate for the Liberal Democrats, but it is totally unrealistic in today's commercial world.

The lobby groups have recently started to go down a new track. They are going through the pretence of showing concern for the economic success of the industry. I say "pretence" because, of course, the real agenda of the lobby groups is purely and simply to shut down the nuclear industry. Those groups suggest that the United Kingdom and its overseas customers would all be better off if there were some kind of deal to abandon THORP.

It has always been open to THORP customers to tell BNFL that, on reflection, they do not want the plant to operate and are prepared to make other arrangements. What have they done? In 1989, almost all THORP's overseas customers took up BNFL's offer of additional reprocessing capacity. The chairmen of the two major German customers, RWE and Veba, recently wrote to BNFL to confirm that they would fulfil the contracts into which they had entered. I have already mentioned last week's advertisement by Japanese customers.

Much has been said recently about the dangers of plutonium. It is worth commenting on the nature of plutonium and its creation because there has been much misinformation. Plutonium is created when nuclear fuel is burnt in a reactor. It is not created by reprocessing. which extracts the plutonium from the spent fuel together with the unused uranium. When that has been done, both materials are available for recycling, which can be undertaken in most existing water-moderated nuclear reactors. The operator can load up to about a third of the reactor with a mixed uranium-plutonium fuel known as MOX fuel. When the plutonium is recycled as part of MOX fuel, much of it is used up. The use and planned use of MOX technology is increasing world wide and BNFL already has a number of orders or letters of intent to manufacture MOX fuel.

The spent fuel and plutonium have to be managed irrespective of whether there is reprocessing. The Government believe that reprocessing is a proven and safe option. If the plutonium is not managed centrally at Sellafield until recycled, it will have to be dealt with as part of the stored spent fuel. It is for the owners of the spent fuel, having regard to their contractual commitments and the appropriate regulatory requirements, to make the choice.

Why do Britain and Europe need THORP? What useful product will it provide? In the 1970s, that need was justified on the ground of the plutonium that it would produce, which was needed for the fast breeder reactors. The Government have now abandoned that programme and Europe has turned from it, so the demand for plutonium has gone. THORP provides no useful product.

I know that it is a difficult concept for the hon. Gentleman to take on board, but we need THORP because customers have signed contracts and want it. They want to make use of the process carried out at that plant. The customers can decide whether they wish to take the plutonium and store it for future use in fast breeder reactors of for MOX fuel. They are exercising their right to choose what they do with their spent fuel. That is the simple answer to the hon. Gentleman.

It is typical of the hon. Gentleman and his like to want to decide what commercial customers should do with their product. It is clear from the hon. Gentleman's question that he wants to deprive the United Kingdom of huge export orders and many thousands of people of jobs in west Cumbria and elsewhere. He should be under no illusion about his motives.

Is the Minister so sure that customers want the fuel, or do they want to avoid responsibility for the cost of cancellation of the contracts? Is he so sure that there is a genuine demand for MOX fuel relative to the fuel costs of enriched uranium?

Customers always have the right to go to BNFL and make alternative proposals. If they decided that they did not want to make use of THORP, costs would be associated with that decision. Customers not only signed up to the original contracts, however, but almost all of them signed up to additional contracts as recently as 1989. A number have expressed interest in signing additional contracts, once THORP has an operating record, beyond the 10 years agreed.

BNFL believes that there will be a demand for a Mox plant, but whether that plant proceeds will depend not only on authorisation from Government, but on customers' willingness to enter into contracts to ensure the economic viability of the plant. The answer will depend, critically, on the attitude of customers. I am sure that BNFL would not proceed unless it was confident that there was a market for the plant and its product.

I should like to press on, but I will give way—for the last time—to my hon. Friend the Member for Rochford (Dr. Clark).

Has it ever occurred to my hon. Friend that, if he had come to the House and suggested that spent nuclear fuel should be put in prepared sites in the ground and covered over—and the process had been given the fancy name of dry storage—there would have been an outcry from everyone in the House and probably throughout the country? I am sure that people would have argued for a proper scientific process to be followed whereby the waste fuel was taken to a proper processing plant and the high radioactive material isolated from the low radioactive material. They would have argued that the fuel that could be reused should be made available for that purpose and that the peril should be concentrated rather than left in the ground in dry storage. Has he ever thought that that might have happened if he had suggested dry storage in the first place?

As ever, my hon. Friend has hit the nail on the head. Apart from what he has said, at the end of the dry storage process, what then? After 50 years, the chances are that a process would be needed, not unlike the THORP one, to deal with the material.

As my hon. Friend the Member for Rochford has recognised only too well, much of the argument against THORP is not an argument against it as a plant or against BNFL, but one aimed at the destruction of the nuclear industry. The opponents of THORP know perfectly well that if they can stop the plant functioning they will deal an effective blow to the underpinning of the nuclear fuel cycle and the operation of the nuclear electric industry. No one should be under any illusions about the motivation of the opponents of THORP. To be fair, for once, to the Liberal Democrats, they know that they share that motivation.

They are disappearing from the Chamber.

My hon. Friend is right.

Whatever the cost in jobs, and whatever the costs in additional charges to electricity consumers, the Liberal Democrats are opposed to nuclear power—and they admit it. The hon. Member for Southwark and Bermondsey would have been rather more honest if he had not finished his speech by saying that he wanted a public inquiry. He should have said that the Liberal Democrats are opposed to the nuclear industry and will do everything that they can to stop its development.

I commend our amendment to the House.

5.56 pm

I welcome the opportunity for a short debate on THORP. Unlike the Minister, I believe that it is entirely right and proper for the Liberal Democrats to select this important and controversial issue for debate.

I suspect that the one achievement—I would not necessarily describe it as such—of the Liberal Democrat motion will have been to precipitate the Government into a firm decision. At least the Government appear to be taking a firm decision to proceed, if their amendment is anything to go by. They have, however, also revealed in a parliamentary answer that was tabled after lunch that they are proposing a further round of consultation.

What sort of consultation can that possibly be, when they have already announced to the entire world in the amendment to the Liberal Democrat motion their view about whether THORP should proceed? The Government are, in effect, saying that they have made up their mind, but that they will consult because, legally, they must be seen to do so. That is not a real, proper, considered process of consultation. It cannot possibly be, because the Government, by what they have said in the amendment, have prejudged it.

It is important for everyone to acknowledge that much has changed since the Parker inquiry. There were five original reasons for embarking on the THORP process: first, plutonium was to be produced for the fast breeder programme; secondly, uranium was to be recovered for re-use; thirdly, it was regarded at the time as the best and, perhaps in some instances, the only means of dealing with spent fuel; fourthly, financial benefit was to be gained from the reprocessing operation; and, fifthly, employment opportunities were to be garnered.

The employment considerations remain as compelling as ever. The impact of any decision taken on the future of Sellafield and the economy of west Cumbria need of course, to be taken carefully into account. Two of the original reasons for proceeding with THORP have, however, lapsed with time.

The fast breeder programme has now been abandoned at national and European levels. We already have a stockpile of some 30 tonnes of plutonium in the United Kingdom from the Magnox reprocessing procedures. THORP would create an additional 30 tonnes a year. There is a world stockpile of some 300 tonnes. What on earth can be the use of extra plutonium now being generated?

Moreover, the recovery of uranium is no longer a competitive exercise. Large quantities of directly mined cheaper uranium are now available and will certainly be so over the 25-year period of THORP's predicted existence.

There is consensus on those two points about plutonium and uranium. Where the debate begins in earnest is over the issue of the right option in waste management in environmental terms for dealing with spent irradiated fuel. That has now become the central nub of the THORP issue.

The Government clearly said in their response to the Environment Select Committee report in 1986 that reprocessing was their favoured option for the disposal of spent fuel. That position now seems to have changed. The Minister for the Environment and Countryside answered a question to me on 24 June. I had asked him:
"what is his policy on the preferred option for the disposal of radioactive spent fuel from advanced gas-cooled reactors, as between reprocessing and dry storage".
The answer, on which the Minister for Energy touched this afternoon, was:
"It is for the owners of spent fuel to decide on safety, technical and economic grounds whether to reprocess spent fuel from advanced gas-cooled reactors or place it in dry storage."—[Official Report, 24 June 1993; Vol. 227, c. 246.]
From that answer and an answer given in June 1989 by the then Under-Secretary of State for Energy, the Government appear to express no preference in principle between the reprocessing and dry storage options.

That attitude of no preference from the Government has again been exemplified in the evidence given to the inquiry at Torness into the construction of dry storage facilities there. Giving evidence before the Scottish Office, Mr. Hetherington told the inquiry that he
"accepted that circumstances had changed since the Government had made its response to the select committee in 1986. The relative economic advantages of obtaining uranium from reprocessing rather than direct mining had changed, and dry storage of spent fuel had emerged as a practicable possibility."
He went on:
"The reprocessing route did not appear to offer any immediate and significant advantages, from a waste management point of view."
So the Government, both in their answers to the House and in the evidence that Government officials have given at Torness, are saying that there are no advantages either way between reprocessing and dry storage. It is interesting to note that the United States, Sweden, Canada, Finland and Spain are all committed solely to the mechanism of direct disposal. They abjure the reprocessing option.

According to the evidence given by Scottish Nuclear Ltd. to the Torness inquiry, BNFL proposes to offer dry storage facilities in conjunction with the Costain Construction Group. Dry storage is clearly on the practical agenda, BNFL's agenda, as well as on the agenda elsewhere.

I wonder whether the hon. Gentleman understands that dry storage gives the management two options: either to reprocess or to destroy completely—[Interruption.] well, hon. Gentleman know what I mean. Clearly, those options exist if there is a dry storage facility. If for instance, the fast breeder reactor in Monju in Japan is as successful as the Japanese hope, and as we expect, plutonium may suddenly come back into fashion. Therefore, those options are extremely important. It is a choice between disposal—that is the word that I was looking for—and reprocessing. That is what dry storage offers for future generations.

I am pleased that the hon. Gentleman corrected himself, because radioactive waste can never be totally destroyed, at least not for hundreds, if not thousands, of years. He fails to recognise that there must be disposal of something at the end of the day, whether reprocessing or dry storage is chosen. Because reprocessing creates a substantial quantity of intermediate-level waste, it cannot simply he dumped in the ground at Drigg, where low-level waste tends to go, but must be properly disposed of in a monitored fashion. Whether we choose reprocessing or dry storage, we have the problem of ultimate disposal.

In case there is any misunderstanding, it should also be put on the record that Scottish Nuclear has a major fixed price contract with THORP, and Robin Jeffrey and James Hann made it clear that they thought that THORP was very important.

My hon. Friend, for whom I have great respect although I do not necessarily agree with everything that he always says on this issue, is right on this point. Scottish Nuclear has a contract for reprocessing at THORP and, as far as I am aware, intends to make use of it if THORP goes ahead. It is also exploring the option of dry storage as an alternative for some of its future spent fuel. It looks very much as if, for the spent fuel beyond the initial contract with THORP, it is likely to opt for the dry storage route.

The Government therefore appear to have no distinct preference between the two options. What, then, is the best waste management option? A number of considerations must be borne in mind. First, reprocessing certainly reduces the amount of high-level waste that is created, but it increases substantially the quantity of low-level waste that is generated. That is confirmed in RWMAC's. 11 th report, which states:
"Reprocessing increases the volume of radioactive waste and the amounts of radioactive material released into the environment".
Secondly, the Select Committee on the Environment noted from paragraph 186 of the report by Atomic Energy of Canada Ltd. in Manitoba, that
"if anything oxide fuel was more stable and more leach resistant than vitrified waste".
Thirdly—it is the point to which the hon. Member for Littleborough and Saddleworth (Mr. Dickens) alluded—eventual deep direct disposal must be entertained as an option, whatever intermediate route is chosen, either reprocessing or storage. Fourthly, it is crucial to know the precise arrangements for substitution of the waste generated if THORP goes ahead and what the waste stream actually generated will be. I submit that that crucial matter, even with the publication, after a seven-month delay, of the RWMAC advice to the Minister, remains in doubt. The RWMAC report says that issues are still outstanding in relation to future disposal facilities and that those issues need to be determined properly before a final decision can be taken.

The chairman of RWMAC, Professor John Knill, told

The Independent:
"the full range of evaluations has not yet been done. We have asked for them and have not seen them. It is necessary that this should be done before Thorp goes into operation".
It is clear from RWMAC's agenda for its 1 July meeting that some of its members have remaining doubts and questions beyond what is expressed in the report.

I do not believe that a proper decision can be taken on the crucial question of the best environmental waste management option, whether it be reprocessing or dry storage, until the report published today has been properly considered, its arguments analysed and—this is crucial—any additional comments have been sought from RWMAC.

The other principal environmental issue at stake is that of emissions. HMIP published its draft authorisations last year. Although it is true that it proposed lower overall emission authorisations for Sellafield, it envisaged higher discharges. In fact, the projected discharges will be about 75 per cent. of the proposed authorisation limits. Again, we know from the report published this afternoon that the original authorisations will be substantially agreed, but there are still some questions that I must ask.

First, when will the full HMIP report be made public? The Government have committed themselves to that and we want to know when it will emerge. Secondly, how do the proposed discharge levels compare with those that currently exist at Cap La Hague, where I understand that discharges of both alpha and beta activity are substantially lower than anything envisaged at Sellafield.

Thirdly, in reaching its conclusion, has HMIP taken into account the new recommendation from the National Radiological Protection Board that 0·3 mSv a year of radiation impact on the general public should be used as the yardstick against which to judge emission authorisations? It is clear that H MIP's report will have to be seen in full and considered by the public before a final decision can be taken on the environmental impact of the plant.

The environmental considerations, the best waste management options and their different impact and the full effects of emissions and discharges must take primacy of place in reaching a conclusion on how, when and if THORP should go ahead. Therefore, a full environmental impact assessment is needed, coupled with wide public debate. Indeed, the Paris commission meeting on 16 June made that a virtual necessity.

Some time ago, an all-party committee said that the Irish sea was the most polluted sea in the world. What is the hon. Gentleman's response to the suggestion of a ten fold increase in both atmospheric and maritime discharges of radioactive materials? That pollution of our environment must he ended, especially in respect of the Irish sea.

The hon. Gentleman is right to identify one of the problems of opting for reprocessing, which generates large quantities of intermediate and low-level waste. A great many of the low-level discharges go straight into the sea, which is why a proper environmental impact assessment of the discharge pattern from Sellafield is required.

What reply would my hon. Friend give to our right hon. Friend the Member for Copeland (Dr. Cunningham), who says that THORP already has £9 billion of secure orders? Our right hon. Friend, who is the local constituency Member of Parliament, also says that delay is causing losses of £2 million a week and that that money is needed to help boost investment in west Cumbria. What answer would my hon. Friend give to his shadow Cabinet colleague?

I am aware of the legitimate constituency arguments that our right hon. Friend has always made—[HON. MEMBERS: "Where is he?"] He is abroad on official duties; nevertheless, he is taking a keen interest in our debate. The figure that my hon. Friend quoted is slightly inaccurate, because BNFL puts the loss at £2·4 million a week. I accept that with every week that passes there is a loss of income to BNFL, but that should not prevent us from ensuring that we get the decision right.

It is important that we make the right decision because the moment that THORP is brought into operation, the entire decommissioning costs will be incurred. Therefore, it is crucial to ensure that the decision to open THORP is absolutely right. Even on BNFL's figures, the decommissioning costs are, at current prices, about £900 million. A few weeks of delay may be necessary to ensure that we make the right decision.

My hon. Friend's intervention was timely, because there is a continuing question over the financial consequences of a decision either to proceed or not to proceed with the plant. BNFL has told us of the projected earnings of the plant—a profit of £500 million over 10 years, with direct employment for 1,200 people and, perhaps, 3,000 in total. Those are not to be dismissed lightly. However, the decommissioning costs must be borne in mind. We know from the National Audit Office report that some of the estimates of decommissioning costs within the nuclear industry are open to some challenge, to say the least. If the decommissioning costs for THORP are even 60 per cent. greater than currently envisaged, that would entirely wipe out the projected profit from the operation.

In addition to the decommissioning issue, a mystery surrounds the exact content of the contracts for the reprocessing of spent fuel from abroad. We are told that there are severe penalties for cancellation by either side, but we cannot know whether that is right, because none of us has seen the contracts. At the very least, the proposal that the contracts should be shown to the Comptroller and Auditor General should be taken up because it is impossible for the public to make a judgment about the penalties that might be imposed. Surely greater transparency about the contracts would assist the public to make that judgment. Surely also, the Touche Ross report on the overall economic prospects for THORP should be published so that everyone can make his own assessment rather than leaving it to the managers of BNFL to tell us.

We should also know the outcome of the dispute reported in The Guardian this morning between the nuclear generators and BNFL over who should be laible for any unforeseen additional costs that might arise and that are no longer underwritten by the Government. We must establish clearly, in the public doman, some of the important issues about the likely financial future of the plant. As I said, once THORP opens, its entire decommissioning costs will be incurred. We must be as reasonably certain as possible about what that cost will be and what benefit will be derived in return.

I have listened with interest to my hon. Friend's speech, and I agree with much of what he says. I understand that if the uranium processors were opened up at THORP, which would take the first two or three months, the decommissioning costs would be only £250,000 up to a certain point in the development process. The company has offered to pay the bill. If that is the case, my hon. Friend may want to temper his remarks in that light.

I am somewhat puzzled by the figure given by my hon. Friend. The decommissioning cost that he has given sounds rather small for any portion of such a plant of any size. However, I suspect that, if that were to happen, we would have another case of the tail wagging the dog in three, six or 12 months. We would be told that, because things had started, they might as well continue. It is important that we get the decision right at the outset.

A range of unanswered questions have arisen about the emissions and discharges from the plant, the nature of the waste stream and the waste management consequences of alternative options, the future decommissioning costs and the content of the spent fuel contracts, and the employment implications of any decision that is taken. The RWMAC report has been published this afternoon and needs careful analysis. The Touche Ross report should also be published. A proper environmental impact assessment should take place. It would be foolish to leap to a conclusion either way before the issues are properly and openly determined.

The Government keep telling us how committed they are to freedom of environmental information, the precautionary principle and environmental impact assessments. None of those is evidenced in their amendment. They say that they are launching a new—if truncated—consultation process, yet their amendment shows that they have already made up their mind. Our environment deserves better.

6.25 pm

Listening to this afternoon's debate, my mind has gone back to the debates in March and May of 1978 referred to by other hon. Members. The debates followed the Parker inquiry, which itself lasted 100 days.

I remember taking part in the first of those debates. The THORP project was created as a result of the two debates. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) who has been in the Chamber for a good deal of the debate and, of course, the right hon. Member for Chesterfield (Mr. Benn) led for the Government in those debates. I am sorry that the right hon. Member for Bethnal Green and Stepney is no longer in the Chamber, because his speech during the debate was one of the most courageous and compelling that I have heard in the House in 28 years. It is a speech for which he deserved the greatest credit at the time.

As has been said in the debate, things have moved on since those 1978 debates. The plant is complete. The staff are trained and ready. The material for reprocessing is in the ponds of the site waiting for the gate to go up and for the containers to be moved into the reprocessing part of the plant. I was taken through the plant four weeks ago. I went into the chamber where the separation of uranium, plutonium and other materials will take place. It may be only a few weeks or months before that chamber is finally sealed up.

I represent a Cumbria constituency and my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) represented Workington in 1978. He also spoke during the two debates. On that occasion, all the Cumbrian Members of Parliament from all parties joined together to vote in favour of the plant going ahead. It is a vital project for Cumbria.

My right hon. Friend has mentioned the importance of employment. Is not it a fact that, if BNFL does not get the go-ahead in the near future, it will have to lay off valuable and trained staff? If the dry storage option is taken, it will mean another public inquiry, a delay of several years and even more people will be laid off. We must go ahead with the project immediately.

I agree with my hon. Friend. Of course the project is important for Cumbria, because it provides 2,000 jobs in that part of the county. My hon. Friend is right and BNFL has told me that if the project does not get the green light soon, some jobs will have to go. Some have gone already because of the delay. The House should be aware of that. The project is important to Cumbria. The investment already amounts to £1·85 billion. It is worth noting that a further £900 million has been invested by BNFL for additional plant and environmental protection infrastructure. It is important to realise how massive the investment has been.

The project is of extreme importance also to my hon. Friend the Member for Morecambe and Lunesdale (Mr. Lennox-Boyd) and to rne. A previous Member for Morecambe and Lunesdale and I were at the original inquiry and have supported the project ever since.

I am well aware of my hon. Friend's support, and I remember that she joined me and others in that debate in May 1978 to support the project.

As has been said, the project has been profitable for the United Kingdom. I am told by BNFL that, in the worst case, the project's profits will amount to £500 million in the first 10 years of operation. The Touche Ross report, I understand, says that the economic benefit to the United Kingdom will be about £900 million. It is also important for Cumbria, as I have said. The delays and the possibility that the project will not start up at all, to which opponents of the project referred, are also important. The massive cost of the delay of £2 million a week is a serious matter. If, by any chance, the project did not start up, there could be compensation of £5 billion. The economic case is overwhelming.

The number of my constituents who work at Sellafield is not enormous, so I am conscious principally of the environmental matters. Those are paramount. I have always said that however powerful the economic case, which I have just stated, it must be set aside if the safety elements of the plant are not entirely satisfactory.

I remind the House that I refused to vote in the March 1978 debate. I said that I could not agree to the opening of the THORP project until the two Secretaries of State had explained the safety provisions. They eventually did so, in the second debate in May 1978. Given the undertakings that they gave, I added my support to THORP going ahead.

It is worth noting that, since 1978, the emissions from Sellafield have been dramatically reduced. If the then Secretary of State had told the House that, by the mid-1990s, the emissions into the sea from Sellafield would be about one hundredth of what they were at their height in the 1970s, no one in the House would have believed him. He would have been laughed at.

But the emissions have been reduced by that amount. I have been given some graphs which demonstrate on a yearly basis the extraordinary reduction of emissions into the sea to one hundredth of what they were. It has been the most remarkable success story. It is a pity that no one has referred to that so far in the debate.

I note the point that the right hon. Gentleman makes about the reduction in emissions and in the pollution of the Irish sea over the years. But he must admit that the early emissions were way above the safety standards which had been set and entirely unacceptable in terms of modern science. We also know that, apart from the revealed pollution, pollution of the Irish sea has taken place which has not yet been revealed. Does not the right hon. Gentleman recall that a quarter of a tonne of pure plutonium was dumped into the Irish sea?

The right hon. Gentleman will be more familiar with the debate in 1978 than I am. I understand that one of the findings of the Parker inquiry was that the necessary cleansing equipment should be installed for the removal of krypton 85. That is not being done, and krypton 85 will be released into the atmosphere, with climatic and other consequences which the right hon. Gentleman has not even mentioned.

Now that the hon. Gentleman has made the speech that he obviously intended to make, I shall proceed with mine. I shall refer to the krypton element in a few moments.

As I drove to London last night, I played again the two-hour debate on THORP which Radio Cumbria broadcast some time ago. The debate was held in Whitehaven. Listening to it, I was struck by the local support for THORP in west Cumbria. I was especially struck by one panellist, a local trade union leader, who made the point that the work force, who had wives and families living in the area, would hardly give their support—it is full hearted support—to THORP if they felt that the plant was in any way unsafe.

I am not surprised that there is such overwhelming support for the project among the work force when I read the statistics. In a statement, BNFL said:
"the individual BNFL worker who received the highest radiation dose in 1992 will receive less than the residents of some 25,000 homes in Devon and Cornwall would receive from natural background."
That is a significant statement which puts the whole debate in its proper perspective. I understand why some of those who are passionately opposed to anything that has a nuclear tag—we heard from the hon. Member for Southwark and Bermondsey (Mr. Hughes)—use every opportunity they can dredge up to try to stop the project going ahead. They opposed the project in the Parker inquiry. They were unable to convince either the judge or his expert assessors. They have opposed every step which has been taken. Now they are using the final argument, that they want another inquiry.

I think that it was a trade union leader who made the comment that, if a second inquiry was obtained, one could be sure that, once it was over, people would find reasons for a third. We are familiar with those tactics. If people do not like something, they ask for an inquiry and create delays.

The earlier inquiry was held in 1978, when we were preoccupied with world oil supplies and oil prices, and when we were in the middle of a world energy crisis. Does the right hon. Gentleman accept that, by 1993, 15 years on, environmental arguments are much stronger, the energy situation is different and, most significantly, the demand for plutonium that was envisaged as significant has not materialised?

We have not heard much in the debate about the pollution effect of coal-fired electricity generation. If the hon. Gentleman reads about the possibilities of mixed oxide fuels, or MOX, projects he will realise that there is a possibility of using the material. There is already an order from Switzerland for this type of fuel.

Opponents of THORP keep talking about dry storage. My hon. Friend the Member for Hertfordshire, South-West asked me a question about it. The hon. Member for Southwark and Bermondsey understandably made it his business to refuse to answer the second question that was put to him by my hon. Friend the Member for Wyre (Mr. Mans). My hon. Friend asked whether the hon. Gentleman realised that dry storage was purely a short-term, transitional solution, which leaves the major problem of what to do with the material at the end of the day.

If the hon. Member for Southwark and Bermondsey believes that dry storage is the option to take, will the Liberal party and all his friends who are opposed to THORP agree to it without a public inquiry or any further delays? We know perfectly well that it is simply a plot, and that they will oppose dry storage just as strongly as they have opposed everything else.

No. I must get on, because the debate is due to end shortly.

The problem of krypton was another favourite worry which was spread around. People said, "Ah, but what about the krypton? This is the serious matter." At the beginning, I was anxious about the krypton factor. However, when I inquired into it, I was astonished to be told that the radiation from krypton emissions in the area in a year for the worst affected person was equivalent to eating a quarter-pound bag of brazil nuts, or four seconds of sunbathing in the United Kingdom. That demonstrates the absurdity of some of the arguments which have been put up to try to convince us that the project should not go ahead.

The amendment tabled by the Government is entirely correct. I hope that the plant can open at the earliest practicable date. But, of course, that must be subject, as the amendment says, to receipts by BNFL of such consents as are required by law.

The Government have decided that there will be a delay, and we must use it to make sure that the plant is entirely safe. That decision reflects great credit on the Government, even though it causes much irritation to many people. They should be given credit for making doubly certain that the plant is safe. Once that has been done, I hope that the project will continue, and that it will produce significant wealth and employment for this nation.

6.39 pm

One unfortunate aspect of this debate is that the Liberal Democrats have cast themselves as the villains of the piece, whereas the Government, because they have dithered and delayed, are the real villains.

Before I produce evidence of that, I repeat my earlier remark: that the Comptroller and Auditor General, Sir John Bourn, is an independent officer of the House of Commons. Before this debate ends, the Liberal Democrats—and my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith)—should be prepared to state that, if Sir John Bourn says that his interpretation of the contracts is the same as that of British Nuclear Fuels, they will accept it.

The preferable option is that we should see both the contracts and reports such as that produced by Touche Ross. If such a conclusion were reached by someone who is an independent officer of the House, that would be a satisfactory outcome, and acceptable but all the documents must be submitted, and that independent officer would have to make a full report.

I am pleased that the hon. Gentleman concedes that, because environmental groups have repeatedly used the same line as the Liberal Democrats—which is that, without seeing the contracts, British Nuclear Fuels cannot be trusted. I hope that that argument is settled and if Mr. Lowry is listening, I hope that he will also take note of what is said by the Liberal Democrats in the House tonight.

Does the hon. Gentleman agree that, when the Public Accounts Committee and the National Audit Office produce a report, it must be agreed by the Department under scrutiny and by the National Audit Office, so that there is no dissension when it comes before the PAC? Therefore, the agreement to which the hon. Gentleman referred is in place.

Yes, I can go that far. As the hon. Gentleman knows, I spent 11 years on the Public Accounts Committee, and we all know what happens in private session. A slight difficulty arises, but it is an agreed report.

In the first two to three months of THORP's life, there will be a process entitled "the commissioning of uranium".

Thereafter, the plant could be decontaminated at a cost of £250,000 to British Nuclear Fuels, which it has offered to pay. I fail to understand why that process cannot begin now. If the plant were to be commissioned at a later stage, a number of months would be saved.

I want to make it clear that I am pro-nuclear and pro-THORP, and have lived in Cumbria most of my life. I was in west Cumbria at the time of the 1957 fire. I am the son of an engineer who worked in the nuclear industry, but regard myself as a constructive critic of the industry.

I supported Greenpeace during the 1973 demonstration over the Sellafield pipeline and subscribed to its legal costs—and was criticised locally for that action. I did so in order that, one day, the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) would be able to say in the House exactly that which he did say. The hundredth multiplier in terms of reductions and discharges of which the right hon. Gentleman spoke arises in part as a result of that incident. I was proud to have been at the forefront of supporting environmental groups.

I have been in a number of public and private scraps with British Nuclear Fuels over the years, primarily in respect of employment, discharges, public relations, waste management and—most recently—krypton emissions. I have argued ad nauseam with the company against its legal actions against environmental groups, which I believe are nonsense. I hold the view that it should never bring such legal actions.

On this occasion, however, the industry has a substantial case and should be supported. Although BNFL is located in Copeland, it is the largest employer of my constituents. It currently has 13,500 people on site, including contract staff. THORP will provide 2,100 permanent jobs in west Cumbria. If it failed to open, that would be an unmitigated disaster for my constituency. The impact would be five times that of the imminent job losses at Rosyth, and the local economy would be devastated.

When a Labour Government proposed and planned the THORP project in the late 1970s, much of the debate centred on employment in the west of the county. Last July, we were told that a timetable had been agreed to allow THORP to begin operations at the beginning of this year. That date was never met. Seven months later, the Department of the Environment is demanding further consultation.

A parliamentary reply from the Secretary of State for the Environment made available today, which clears the air as far as I am concerned, states:
"the Inspectorate have concluded that no points of substance have been raised that should cause them to reconsider the terms of the draft authorisations, save for some amendments/corrections. In their judgment, the provisions of the draft authorisations will effectively protect human health, the safety of the food chain, and the environment generally."
What more could we want? How much more consultation must there be before the project goes on stream?

All the matters raised today were dealt with in the Parker inquiry and in the course of hundreds—perhaps thousands—of' parliamentary questions and repeated interventions during numerous energy debates on all aspects of the industry over the past 13 years.

I have every respect for my hon. Friend's professional background and integrity, but in the Parker inquiry and in the 1978 debates, the main reason given for commissioning THORP was to isolate plutonium for the new generation of fast breeder reactors. That was the energy scenario presented for the 21st century. Now that that no longer holds true, there is no valid energy reason for proceeding with THORP.

I understand that there is a large order book. It is not I who am saying that there is a demand. The utilities of Germany, Japan, Switzerland, Sweden, Spain, Netherlands, Canada and Italy all tell us that there is a market for the product. It seems that the statements made at the Parker inquiry in 1978 are very relevant, and led to the creation of a substantial market.

Does not the tendency on the part of those countries to buy British tell the hon. Gentleman something about the product and about their anxiety to get it out of their countries?

The hon. Gentleman has made a very interesting point. I went to a meeting the other day with my hon. Friend the Member for Carmarthen (Mr. Williams). A Japanese lady was at that meeting. The Japanese are not prone to giving us business when they can turn out products themselves.

I am told that the Americans, by treaty, prevented the Japanese from developing certain nuclear technologies and that, if it had not been for the existence of that treaty, we should not have the THORP plant in West Cumbria today. I am grateful to the Americans for that. It adds to the point made by the hon. Member for Banff and Buchan (Mr. Salmond). It may be that the Japanese wanted the business, but the existence of the treaty prevented them from getting it.

The truth is that a strong and articulate lobby of opponents of nuclear power wants to phase out the nuclear industry. It wants THORP stopped at all costs. The Government appear to be conceding some of their arguments, with the result that BNFL is now losing £2.4 million a week in lost profits. The Government's amendment is extremely ambiguous. Although it expresses support for THORP, it fails to reveal the Government's dithering over approval. I believe that there has been dithering and a lack of decision-taking in Government Departments.

I understand that Mr. Guinness is here to observe our proceedings, but he would have done well to come to politicians long before he did so. I understand that there is much criticism in the industry that we were not approached far earlier, so that representations could be made to us about ensuring that the right decisions were taken at the right time, with a final decision being taken earlier than now appears to be likely.

Why should the credibility of British industry be put at stake? We have signed a number of binding contracts. We did so having debated all the issues that are now being questioned. The £9 billion BNFL order book comprises eight overseas companies, many of which are now expressing open concern about what is happening. Why? Because we built the plant with their money. They paid for that plant. Therefore, they want it to be commissioned.

The largest Swiss electricity utility, NOK—a BNFL customer—has recently stated:
NOK has invested in this plant more than £90 million without taking into account the accrued interest on construction. With deep sorrow we noticed articles in the British Press … stating that the start-up of THORP could be further delayed up to one year. Such a development would badly hurt our business interests but (also) our confidence (which, we put up to now into the performance and excellency of British Industry, especially BNFL."
NOK is not alone. Hon. Members will have seen the advertisement in the national press last Wednesday by the 10 Japanese electricity companies, emphasising their support for the plant. German customers, too, have expressed concern. One company, GKN, worriedly stated only recently:
"We have made a big contribution to that facility. We assumed, that after the public inquiry years ago, there will not be basic doubts on THORP's operation."
The reality is that we are letting down our customers with this delay. So why the dithering? Why do we need this further process of consultation? All these issues have surely been dealt with in recent years. Why can we not have the decision now and let BNFL take its chance on judicial review, in the event of Greepeace bringing the case it has talked about?

These overseas customers have provided up-front payments to finance the large majority of the THORP construction costs of £1·85 billion, 90 per cent. of which was spent with British industry. I wonder how many jobs in the constituencies of hon. Members in all parts of the House were created as a result of that up-front payment by foreign contractors?

Was the hon. Gentleman in the House when the Government announced that they were not going to go ahead with the fast breeder reactor programme? Does he know how many Liberal Democrats protested, because of job losses in their constituencies?

I do not want to go into the question whether the Liberal Democrats protested on that occasion, but we can be sure that jobs in every constituency have been affected by the THORP project. I protested about the rundown of the fast breeder reactor programme. To be fair to the Liberal Democrats, the hon. Member for Caithness and Sutherland (Mr. Maclennan) protested about it at that time, I believe.

I have already said that 90 per cent. of all this money was spent with British industry. All in all, it has brought £1·6 billion-worth of inward investment to west Cumbria. It represents the biggest inward investment in our history. We shall never again experience anything like it.

These contracts, which were negotiated with the customers, are based upon both cost-plus and fixed-price terms, with about 40 per cent. accounting for the latter. On that specific point, can the Minister confirm that, irrespective of arguments over price, reported in The Guardian this morning, the business for core tonnage for reprocessing at THORP from Nuclear Electric and Scottish Nuclear is absolutely secure? Is it legally watertight?

The real issue is not that the nuclear giants are on a collision course but that the Government have withdrawn their pledge to underwrite risks attached to future legislation. It may be that the prospect of future privatisation of parts of the industry features greatly in the minds of Ministers and civil servants when decisions are taken on such matters, particularly when it comes to decommissioning costs.

My hon. Friend mentioned that Japan does not do its own reprocessing because the world did not trust Japan, because of its record, at the time. Does he not think that events have moved on, and that the greatest threat in the world is the proliferation of materials for making nuclear weapons? If THORP goes ahead, there will be two choices: either this country will become the nuclear dustbin of the world or plutonium will proliferate throughout dozens of countries, many of which are unstable. As plutonium lasts for ever, will it not enormously increase the danger of nuclear proliferation?

I shall refer to that point at the end of my speech. We must certainly address the proliferation argument. As for what my hon. Friend says about waste material, he will have heard earlier in the debate the argument about material substitution, which I think dealt with his point.

Questions have been raised about the soundness of the contracts. I am told that several joint opinions of leading counsel have been received by BNFL, confirming that they are
"commercially effective and binding on the parties."
I am equally sure that, if THORP did not go ahead, all the customers, especially those with fixed-price contracts, would seek compensation. That would cost the taxpayer, as my hon. Friend the Member for Linlithgow (Mr. Dalyell) said, as much as £5 billion. Furthermore, it would cost BNFL £1 billion in lost profits over the next 10 years. So I say again: why the dithering by the Government?

But the buck does not stop there. If THORP does not open, the cost of Magnox reprocessing will increase, as it faces the full cost burden of otherwise shared waste management facilities. Who will be forced to pay for that? Nuclear Electric and Scottish Nuclear. However, at the end of the day, the customer, the householder, will pay for it in higher electricity prices. That has to be avoided at all costs.

I want to say a few words about safety and proliferation. The public should never measure the industry's safety record on the basis of incidents at Sellafield. They are invariably in the old plant. When the hon. Member for Southwark and Bermondsey (Mr. Hughes) goes to Sellafield, he should tell the management, if they want to take him round the new plant, that he wants first to go round the old plant. I understand that management do not always take people round the old plant.

It is only when one sees the old plant and compares it with the new one that one appreciates the developments in nuclear technology over the years. That is important when one is evaluating reports on television or radio, or in the media, about incidents at Sellafield.

Will the hon. Gentleman confirm that an episode as minute as the misplacement of a used glove counts as an incident? One reads in the newspapers that such incidents are increasing, when in reality they are less significant than a glove being lost in a hospital.

The hon. Lady is right. Many small incidents are reportable. However, we must not underestimate the importance of larger incidents, which, equally, are reportable.

The old plant was built in the 1950s. Subsequent plants have a far higher safety record, as their technology is invariably state of the art. Discharges into the sea following the Greenpeace incident in 1983 are now less than one hundred of what they were 10 years ago. If we are to evaluate the effect of radiation doses on the population, we must compare them with naturally occurring background radiation.

Although the report by the Committee on Medical Aspects of Radiation in the Environment mentions the possibility of an increased risk to the general public under the proposed authorisation in the area of the plant, such levels account for only 10 per cent. of natural background radiation. Put simply, THORP increases exposure by 25 microSieverts per person a year. That must be compared with 4,300 microSieverts in Ireland, 7,500 microSieverts in Cornwall and 2,200 microSieverts in west Cumbria.

I have, however, one reservation about discharges, and it concerns krypton, about which I have had endless correspondence and conversations with the company. I have corresponded with the Japanese authorities to establish whether the krypton removal plant attached to the Tokaimura pilot reprocessing plant should be fitted to THORP.

We are now told that the Japanese do not intend to fit such technology to their new fully fledged reprocessing plant at Rokashamura, which in effect will be the same as THORP when it is opened in 10 years' time. In my view, further work is needed on krypton, particularly as the THORP facility is designed for add-on krypton removal technology.

Proliferation is an issue, and we have to address it. The Minister should tell us today whether the Americans are exerting any pressure on the Government about the potential for proliferation arising from THORP. If the answer is yes, instead of questioning the project, surely the solution is to strengthen the International Atomic Energy Agency and its enforcement powers.

One must not stop the process or shut the plant, but rather deal with the problem of shipping the product around the world and with its end use. If I recall correctly, in the 1980s. when many Labour Members were unilateralists, we argued for the enforcement of its powers and for it to do its job successfully and properly.

Many of my constituents are worried about this debate and about the future of THORP. We believe that, after 15 years, the talking must stop and the plant should be allowed to open. We cannot go on in an atmosphere of concern such as currently exists in west Cumbria.

7.3 pm

I wish, first, to declare an interest as a non-executive director of Nuclear and General Engineering Ltd. and of Cunnington and Cooper Ltd., which both manufacture for BNFL on a considerable scale. I was previously a director of a company that manufactured for coal-fired power stations and of an oil company, so I have wide experience of energy, not merely a narrow view.

The United Kingdom has no equal in orchestrating delay—it really takes the biscuit. I am talking about Ministers, civil servants. inspectorates and local planning officers. I could go on and on. Who rubs their hands? It is the French across the channel. Why? Because they are our main competitors. They have nuclear power and nuclear processing in a big way. If we do not get cracking on THORP, we will export not only jobs from Cumbria but many jobs throughout the United Kingdom that depend on contracts for THORP going ahead very shortly.

We are affecting thousands of people. We are doing a great disservice to our engineers, scientists and inventors, who have made us leaders in nuclear processing. Labour Front-Bench spokesmen say, "It is a question of storage or reprocessing." It is not; it is a question of disposal and reprocessing, which allows management to decide whether some material is stored in dry storage. Labour's Front-Bench spokesmen have their story wrong and they are not thinking clearly enough. Management wants the choice.

The hon. Member for Workington (Mr. Campbell-Savours) made a very good speech. However, he blamed John Guinness, who I believe is blameless because he was not chairman when many of these things were put in motion. Since becoming chairman, he has been quick to talk to hon. Members who have taken an interest in nuclear energy and to invite them to Sellafield to see things for themselves.

I referred to the United Kindom's orchestrating of delays, of which the Sizewell inquiry was a good example. We are simply handing contracts to our competitors. We have the designers, scientists and the skills. For goodness sake, let us capitalise on that and win trade for the United Kingdom.

The dangers were mentioned. People who live in Cornwall are subject to 7,500 microSieverts of radiation a year. People who live in Cumbria will be pleased to hear that they are subject to only 2,200 microSieverts a year. People who live close to the plant might be subject to an additional 53 microSieverts, but that equates to only the radiation level experienced on an aircraft trip to Tenerife and back. The radiation level for the whole of Cumbria equates to that experienced on an aircraft trip to Singapore and back.

Why are we talking about safety? If we are worried about safety, why let the French take the lead? They are only 20 miles across the water. If there is a disaster in France, we will suffer. It is absolutely stupid.

I have said all that I want to say in only a few minutes. I wish that other hon. Members would be as brief, because the speeches and stupid interventions that we have heard will serve only to hand contracts to the French. If hon. Members had something to say, why did not they stand up and make a speech? Why did they keep intervening? I reckon that I have said it all in two minutes.

7.8 pm

I thank the Liberal Democrats and the hon. Member for Southwark and Bermondsey (Mr. Hughes) for initiating the debate.

The key decisions about THORP were taken in 1978, since when there has not been a parliamentary debate on the subject. In those 15 years, circumstances have changed substantially. In the 1970s, oil prices went through the roof and our future oil supplies were uncertain. There was a world energy problem, because we did not know how long our oil and gas resources would last. There was, therefore, a projected energy gap. The answer with which we were presented in the 1970s was nuclear energy—advanced gas-cooled reactors, pressurised water reactors and, in the long term, fast breeder reactors.

The initial justification for THORP was that we would need plutonium to solve the energy problem, and that fast breeder reactors would be the reactors of the 21st century.

Fifteen years later, it is a completely different ball game. There is no energy problem. Oil and gas resources are finite, but we are thinking in terms of 50 years and more. Oil prices are no longer the problem that they were in the 1970s. There is a glut of coal on the world market, and it is British. The market for nuclear energy has collapsed. Orders for reactors have been cancelled, and, because of the transparent economics, we now know that nuclear electricity means a £1 billion a year levy on electricity prices. There is no demand for plutonium, although there is an embarrassment of plutonium in Europe, Russia and the United States.

The Government cancelled the British fast breeder reactor programme two or three years ago. In Europe, all work on fast breeder reactors is coming to a halt, including that on the Super Phenix in France. Only Japan is proceeding with a fast breeder reactor, but, having studied nuclear matters for the past 20 years, I can safely predict that within 10 years, or perhaps even five, Japan will also scrap that work.

What is the justification for THORP? Once we had scrapped the fast breeder reactor, there was no need for it. The only justification is the £9 billion of orders for reprocessing, which were negotiated 10 years ago. We now realise that reprocessing is quite unnecessary because dry storage is a realistic, viable and far cheaper option.

The Minister said that everyone who is anti-THORP is anti-nuclear, which is generally the case. In economic terms, it would be cheaper for Nuclear Electric and Scottish Nuclear if THORP were cancelled and if they switched to dry storage, which is their preferred option. Germany is now considering removing the reprocessing requirement from its electricity utilities so the German orders can be re-negotiated; perhaps Germany would be glad if THORP were cancelled. The £5 billion-worth of Japanese orders is not a consolation prize. I am sure that the cancellation fee would be only a small fraction of that. The Japanese do not need the plutonium because there is an embarrassment of plutonium on the world market.

Why should we proceed with THORP? We do not need the uranium, which is much cheaper on the world market. We do not need the plutonium, because there is no market for it, and the radioactive waste produced is the same as that in the dry store facilities.

The future of THORP should be the subject of a full and open public inquiry so that all aspects can be considered. As the hon. Member for Southwark and Bermondsey said in his excellent speech, a public inquiry need take no more than 100 days; the decision could still be taken by the end of the year. I am sure that the result of a public inquiry would be completely different from that in 1978. The THORP project should be scrapped. It is cheaper to scrap it than to proceed.

7.13 pm

For all the passion and certainty that have accompanied so many of the speeches, perhaps the most revealing was the passage in the Minister's speech when he was at great pains—no doubt with his eye on the Strand and the High Court—to make it perfectly clear that certain statutory responsibilities devolve on the two Secretaries of State and that, however much passion and certainty we may display in the Chamber, to a large extent the decisions may fall to be taken under the discretion that legislation affords to them.

The speech made by the hon. Member for Islington, South and Finsbury (Mr. Smith) was one of the most significant contributions to the debate. He expressed with great eloquence his and many other people's reservations. His analysis was faultless, but I found his conclusion difficult to justify against that analysis.

He concluded that an environmental impact assessment was necessary. I have seen a few of those in my time, and the one thing we know about them is that they are all based on assumptions. If one wants to challenge the assumptions, the only way to do so is at a public inquiry. I should declare an interest in public inquiries because some of the best and, I suppose, some of the most lucrative days of my life have been spent at public inquiries.

One important issue has not yet been dealt with: public inquiries are an important vehicle for creating public confidence. They are not merely opportunities for points to be scored by either side of the argument or for cross-examination; they are an opportunity to allay the public's legitimate anxieties. Of course, if a public inquiry were to follow in this case, it would cause delay and costs would also be involved. I agree with the hon. Member for Workington (Mr. Campbell-Savours) that jobs could be at risk.

I am not one of those who passionately oppose nuclear power, to use the phrase of the right hon. Member for Westmorland and Lonsdale (Mr. Jopling), but the issues go beyond the boundaries of Cumbria and have attracted the attention of and caused anxiety among sufficient people to justify a public inquiry.

Hon. Members should read with care the answer put on the board at 3.30 pm today. The Secretary of State for the Environment made it clear that the functions incumbent on him under, for example, section 11 of the Radioactive Substances Act 1960 are not to be prejudiced by the terms of his answer. If one reads the Act, one finds that the form of the consultation that the Secretaries of State may yet determine may be that of a public inquiry. The Minister dare not say that there will be no public inquiry; if he did, he would be trenching on the discretion of those Secretaries of State, and I can assure him that it would be relied on in an application for judicial review in the High Court in the Strand. The consequence of the passion and commitment that have been displayed this evening may yet be a public inquiry. If there were to be an inquiry, I do not believe that it would be against the public interest.

I understand those who support nuclear power with great passion and enthusiasm. I also understand hon. Members who are anxious to support those who work in the industry, especially their constituents. However, before we proceed, and in view of the fact that 15 years have elapsed since the Parker inquiry, is it not right to pause and reconsider?

I do not make that suggestion on an insubstantial basis. On the subject of substitution, the document produced by the Radioactive Waste Management Advisory Committee raises an important matter that has not yet been resolved. How is it to be resolved to the public's satisfaction other than through a public inquiry? I wanted to say a little more about the risks of nuclear proliferation, but time prevents me from doing so.

One consequence of THORP would be the production of more plutonium. To convert it to weapons grade material takes great skill and is no mean feat. The existence of additional plutonium and the risk of its potential diversion for illicit purposes should cause us great concern. I do not think that the United Kingdom is at risk of a nuclear attack from countries that were formerly members of the Warsaw pact or the Soviet Union, but the United Kingdom's interests will certainly be prejudiced, or at risk, if there is a proliferation of countries with nuclear weapons. That in itself should make us pause and think before we proceed with the programme.

7.19 pm

With the leave of the House, I should like to reply to the debate.

We have had a constructive debate in which a wide variety of issues have been aired. Of course, my right hon. Friends the Secretary of State for the Environment and the Minister of Agriculture, Fisheries and Food will take careful note of the points that have been made. They must exercise their functions in relation to the Sellafield discharge authorisation as that is a matter for them.

The hon. Member for Islington, South and Finsbury (Mr. Smith) urged an environmental impact statement on the House. He was answered admirably by the hon. Members for Linlithgow (Mr. Dalyell) and for Workington (Mr. Campbell-Savours). They argued against such a statement very persuasively.

The hon. and learned Member for Fife, North-East (Mr. Campbell) again urged us to have a full public inquiry. He joins Greenpeace in that request. However, unlike Greenpeace, he was not honest about what he wanted. Greenpeace has stated quite specifically that it wants a public inquiry because that would delay the operation of THORP by a year or 18 months. Why did not the hon. and learned Gentleman come clean with the House and say that that was his motivation?

My right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) and the hon. Member for Workington spoke well for Cumbria and made clear the widespread support for THORP. As usual, my hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) spoke clearly, directly and to the point.

The hon. Member for Carmarthen (Mr. Williams) revealed himself once more to be a fully paid up member of the "We know it all, but we are opponents to nuclear power and we will use every mechanism we can" brigade, as that is what, in effect, he said in his short intervention.

I wish finally to consider the motion tabled by the Liberal Democrats. They state in their motion that there is a "hardening of international opposition". There is no evidence of that and customers have supported the plant yet again. The motion states:
"there are … strong economic, environmental and proliferation reasons"
against the plant. However, the conclusions of Her Majesty's inspectorate of pollution, revealed in today's parliamentary answer, give the lie to that.

The Liberal Democrats also state in the motion that
"all relevant circumstances have … changed".
Yes, relevant circumstances have changed: THORP has been constructed; people have been recruited for the plant, contracts have been signed and people are trained and ready to work. The Liberal Democrats should pay attention to that.

The motion states that alternative processes are available. However, customers are not choosing those alternative processes. The motion calls for "full disclosure" of contracts and well it might. As my hon. Friend the Member for Littleborough and Saddleworth made clear, what would that do? It would help the French and BNFL's international competitors.

The motion also calls for "economic justification" for the plant. That is exactly what my right hon. Friend the Secretary of State for the Environment has done in his announcement today. The motion calls for opportunity for "public comment" and that, too, has been provided in the parliamentary answer today.

The points made by the Liberal Democrats have been answered. I call on the House to vote for the Government amendment to the motion.

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 43, Noes 157.

Division No. 308]

[7.22 pm


Alton, DavidKennedy, Charles (Ross,C&S)
Ashdown, Rt Hon PaddyKilfedder, Sir James
Bayley, HughLlwyd, Elfyn
Benn, Rt Hon TonyLynne, Ms Liz
Bennett, Andrew F.Madden, Max
Bruce, Malcolm (Gordon)Mahon, Alice
Campbell, Menzies (Fife NE)Mullin, Chris
Cann, JamiePrentice, Ms Bridget (Lew'm E)
Carlile, Alexander (Montgomry)Rendel, David
Cohen, HarryRoche, Mrs. Barbara
Cook, Frank (Stockton N)Salmond, Alex
Corbyn, JeremySkinner, Dennis
Cryer, BobSteel, Rt Hon Sir David
Dafis, CynogTaylor, Matthew (Truro)
Denham, JohnTyler, Paul
Ewing, Mrs MargaretWareing, Robert N
Flynn, PaulWigley, Dafydd
Galloway, GeorgeWilliams, Alan W (Carmarthen)
Harvey, NickWise, Audrey
Hughes, Simon (Southwark)
Johnston, Sir Russell

Tellers for the Ayes:

Jones, leuan Wyn (Ynys Môn)

Mr. Archy Kirkwood and Mr. James Wallace.

Jones, Lynne (B'ham S O)
Jones, Nigel (Cheltenham)


Ainsworth, Peter (East Surrey)Burns, Simon
Amess, DavidBurt, Alistair
Arbuthnot, JamesButler, Peter
Arnold, Jacques (Gravesham)Campbell-Savours, D. N.
Arnold, Sir Thomas (Hazel Grv)Carlisle, John (Luton North)
Ashby, DavidCarrington, Matthew
Atkinson, Peter (Hexham)Carttiss, Michael
Baker, Rt Hon K. (Mole Valley)Cash, William
Baker, Nicholas (Dorset North)Clappison, James
Banks, Robert (Harrogate)Clarke, Rt Hon Kenneth (Ruclif)
Bates, MichaelClifton-Brown, Geoffrey
Blackburn, Dr John G.Congdon, David
Booth, HartleyConway, Derek
Bottomley, Peter (Eltham)Coombs, Simon (Swindon)
Bowis, JohnCope, Rt Hon Sir John
Brandreth, GylesDalyell, Tarn
Brazier, JulianDay, Stephen
Bright, GrahamDeva, Nirj Joseph
Brown, M. (Brigg & Cl'thorpes)Devlin, Tim
Browning, Mrs. AngelaDickens, Geoffrey
Bruce, Ian (S Dorset)Douglas-Hamilton, Lord James

Dover, DenKnight, Greg (Derby N)
Duncan, AlanKynoch, George (Kincardine)
Eggar, TimLait, Mrs Jacqui
Emery, Rt Hon Sir PeterLegg, Barry
Evans, David (Welwyn Hatfield)Lidington, David
Evans, Jonathan (Brecon)Lilley, Rt Hon Peter
Evans, Nigel (Ribble Valley)Luff, Peter
Fabricant, MichaelMacKay, Andrew
Fishburn, DudleyMcLoughlin, Patrick
Forman, NigelMcNair-Wilson, Sir Patrick
Forsyth, Michael (Stirling)Malone, Gerald
Fox, Dr Liam (Woodspring)Mans, Keith
Fox, Sir Marcus (Shipley)Marlow, Tony
Freeman, Rt Hon RogerMarshall, Sir Michael (Arundel)
French, DouglasMartin, David (Portsmouth S)
Garnier, EdwardMerchant, Piers
Gillan, CherylMilligan, Stephen
Goodson-Wickes, Dr CharlesMitchell, Andrew (Gedling)
Gorman, Mrs TeresaMoate, Sir Roger
Greenway, Harry (Ealing N)Moss, Malcolm
Greenway, John (Ryedale)Nelson, Anthony
Griffiths, Peter (Portsmouth, N)Neubert, Sir Michael
Hague, WilliamNewton, Rt Hon Tony
Hamilton, Neil (Tatton)Nicholson, David (Taunton)
Harris, DavidOttaway, Richard
Hawksley, WarrenPage, Richard
Hayes, JerryPaice, James
Heald, OliverPatnick, Irvine
Hendry, CharlesPorter, David (Waveney)
Hill, James (Southampton Test)Powell, William (Corby)
Horam, JohnRichards, Rod
Hughes Robert G. (Harrow W)Riddick, Graham
Hunter, AndrewRobinson, Mark (Somerton)
Hutton, JohnRowe, Andrew (Mid Kent)
Jack, MichaelRyder, Rt Hon Richard
Johnson Smith, Sir GeoffreyShaw, David (Dover)
Jones, Gwilym (Cardiff N)Shepherd, Colin (Hereford)
Jones, Robert B. (W Hertfdshr)Skeet, Sir Trevor
Jopling, Rt Hon MichaelSpencer, Sir Derek
Kellett-Bowman, Dame ElaineSpicer, Sir James (W Dorset)
Key, RobertSpink, Dr Robert
Kirkhope, TimothySproat, Iain
Knapman, RogerStanley, Rt Hon Sir John
Knight, Mrs Angela (Erewash)Stephen, Michael

Stern, MichaelWaterson, Nigel
Stewart, AllanWells, Bowen
Sumberg, DavidWheeler, Rt Hon Sir John
Sweeney, WalterWhittingdale, John
Taylor, Ian (Esher)Widdecombe, Ann
Taylor, John M. (Solihull)Wilkinson, John
Taylor, Sir Teddy (Southend, E)Willerts, David
Thomason, RoyWinterton, Mrs Ann (Congleton)
Thompson, Sir Donald (C'er V)Winterton, Nicholas (Macc'f'ld)
Thompson, Patrick (Norwich N)Wood, Timothy
Thurnham, PeterYoung, Rt Hon Sir George
Trend, Michael
Twinn, Dr Ian

Tellers for the Noes:

Viggers, Peter

Mr. David Lightbown and Mr. Sydney Chapman.

Waller, Gary
Wardle, Charles (Bexhill)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments) and agreed to.

Question accordingly agreed to.

MADAM DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.


That this House congratulates the management and workforce of British Nuclear Fuels plc on the completion of its high technology thermal oxide reprocessing plant (THORP) for the reprocessing of spent nuclear fuel at Sellafield; welcomes the 3,000 jobs, mainly in the North West, which the plant supports; recognises that around 90 per cent. of its £1,850 million capital cost was spent with British industry; notes that the plant is needed to fulfil the customers' requirements for reprocessing, represented by contracts already won worth £9 billion; recalls that it is a major example of international inward investment which the chairmen of the ten Japanese nuclear power generators strongly endorsed last week; expresses confidence in the non-proliferation arrangements that underlie the plant's work for all the overseas customers; and, subject to receipt by BNFL of such consents as are required by law, supports the commissioning of the plant at the earliest practicable date.

Regional Development (Wales)

7.34 pm

I beg to move,

That this House condemns the reduction in resources for regional development by the United Kingdom Government; notes that this is in stark contrast to the policy of the European Community, which actively promotes regional development in order to improve the infrastructure and economies of peripheral nations and regions; and calls on the Secretary of State for Wales to ensure that the whole of Wales benefits from a wide range of instruments for regional development, including assisted area status.
The timing of this debate is particularly opportune, for several reasons. We have a new Secretary of State for Wales—a Secretary of State who inevitably knows little about Wales. There is nothing unusual about that—with the Tories, of course, it is par for the course. The House will know perfectly well Plaid Cymru's remedy for that chronic situation. I shall return to that point later.

It is equally significant, perhaps, that Wales knows little about the new Secretary of State. True, his reputation has come before him—a Thatcherite, as dry as a bone, a non-interventionist free marketeer, so it is said, thus inevitably one who is less than enthusiastic, perhaps highly sceptical, about what is termed regional development policy. However, that might be a completely false impression. Among other matters, the debate provides an opportunity to begin to find out what creature the Secretary of State is. I use the word "creature" in its original and best meaning—a person created. If he wishes, this is an opportunity for him to dispel the image of him that I have just presented.

I make it clear at the outset that, when members of my party speak of regional development policy, we do not mean developing Wales as a region; we mean the development of the regions of Wales. Wales is not a region; Wales is a nation. We in Plaid Cymru say that the prime reason why almost the whole of Wales is in such need of regional development policy is that we in Wales have not taken our nationality sufficiently seriously. We have failed to bring into being the institutions, in particular a properly constituted Government accountable to a democratic Parliament, that would enable the people collectively to take Wales's future into their own hands. That is an interpretation that more and more people in Wales are beginning to accept, and with more and more conviction.

One of the factors that have brought about that evolution of opinion over recent years has been the absurdity and the incongruousness—it would be comical were it not so infuriating—of the fact that three successive Secretaries of State for Wales have been English, representatives of English constituencies and members of a Government pursuing policies that are quite unacceptable to the people of Wales.

We in Plaid Cymru and other hon. Members want national development in Wales, and that entails the economic development of Wales's regions in order to provide prosperity for our people, the material underpinning of our communities with their varied Welsh cultures, opportunities for fulfilment within Wales for our young people, and the encouragement of confidence and self-reliance among the people of Wales. The underlying chronic debilitating problem of Wales has been the continued out-migration of our young people over a long period—a continuous brain drain from Wales. Building a national future for Wales must entail tackling that underlying historic problem.

Of course, the Conservative Government have made some concessions to Welsh distinctiveness, lest, I suppose, the natives become restless. Two of the three previous viceroys have become wets, as they are called. They have made much use of Wales as a laboratory to test and demonstrate the effectiveness of relatively—I emphasise the word "relatively"—interventionist economic strategies. We have been told that that is typical of Conservative administration in Wales recently. It remains to be seen whether the Secretary of State will belie his reputation or prove himself to be of the same ilk as the previous two, or perhaps three, Secretaries of State.

That relative interventionism, as we might call it, has meant that Wales has endured a reduction in Government expenditure on regional and financial assistance of 62 per cent., compared with 79 per cent. for Great Britain as a whole. If that sounds a bit like damning with faint praise, as Pope would have it, that is exactly what it was meant to be. Funds from the Exchequer for the Welsh Development Agency stood at £87 million in 1991–92, compared with £112 million in 1979–80, at constant prices.

Notwithstanding the reduction in funding, the WDA is a powerful agency. I shall be interested to hear what the Secretary of State has to say about its future. It has been suggested that the WDA has trumpeted its own success to such a degree as to imperil its future by, first, arousing envy among the English regions and, secondly, causing some people to believe that its survival is no longer necessary. The WDA is a great success story of the Welsh economy.

That weakness—that peccadillo—of the WDA is less true of the Development Board for Rural Wales. That board has done important work in the rural areas of mid-Wales and is now targeting—as it should—the western seaboard, which includes a great deal of my constituency. That work must continue. We must ensure that the commitment to those areas in Wales is maintained.

Before the hon. Gentleman leaves the issue of the WDA and the Development Board for Rural Wales, perhaps he will recognise that the way in which those organisations have operated recently has led to there being much more in terms of a partnership between private business and the agencies. That is different from the situation that existed at the inception of the WDA. Does he think that that shows that the agencies have a glowing future, in line with the whole approach of Government policy in terms of a partnership between the Government and private business?

I have no objection at all to the principle of a partnership between public agencies such as the WDA and the private sector. Long may such a partnership continue and develop. However, it is not the same as always tying the funds that public agencies should he putting into certain developments to the availability of private moneys in connection with them. Be that as it may—a partnership of that sort must be welcomed.

It is worth considering what exactly has been achieved by regional policy in Wales, including the activities of the WDA over the past decade. I shall leave aside for a moment the pitiful inadequacy of the response in the 1960s and the 1970s—I make no apology for that period—to the massive structural change that the Welsh economy was undergoing. There were serious deficiencies at that time.

There were successes in the 1980s, but they were partial at best. That is not to whinge—it is simply to face the truth. It is important that we do not allow any propagandist self-deception to prevent us from looking the facts straight in the face and examining the current needs of the Welsh economy.

I agree with the hon. Gentleman's comment that the improvements have been partial. Does he agree that, if the remit of the Development Board for Rural Wales were widened somewhat so that it could take a more active part in both agriculture and tourism, its success might be rather more holistic?

I am grateful for that intervention. An holistic approach is certainly what we need in rural Wales, as elsewhere. Clearly, industrial development needs to be considered, together with the state of the agricultural industry. I go further to say that such developments need to be considered in relation to cultural issues and cultural development. Recently, the DBRW has become more sensitive to such considerations, and I am glad to see that sort of development.

In what way has the achievement been partial? Inward investment has been largely limited to south-east and north-east Wales. I have the figures for the period 1983–88, but I do not think that they would be much different today. At that time, 84 per cent. of inward investment went to the three Glamorgans and Gwent alone. With Clwyd, it added up to 93·9 per cent. Effectively, inward investment has been limited in Gwynedd and it has hardly touched Dyfed and Powys. I do not think that things have changed since then.

The United Kingdom as a whole has been lucky enough to attract nearly 30 per cent. of the total amount of inward investment in the European Community. The vast majority of it goes either to Scotland, where it is pooled by the Scottish Development Agency, or to the Welsh Development Agency. Meanwhile, the north of England, which must trundle along with the Northern Development Company, has been successful, but not to anything like the same degree as the WDA.

My hon. Friend the Member for Hastings and Rye (Ms Lait) is here to plead for the sort of assistance that the hon. Gentleman is taking much too readily for granted in southern and northern Wales. Incidentally, the people living in those two parts of Wales need regional assistance.

I am here tonight unashamedly to plead the cause of Wales. That is certainly my priority. In the creaking United Kingdom framework, it is only right and proper that the national nature of Wales and Scotland should be recognised by different agencies. I am not in the business of bandying figures about or making comparisons of that sort—I am simply examining what has been achieved in terms of regional policy in Wales as a result of the activities of the WDA. I am simply saying that inward investment has touched only relatively confined parts of Wales. Even in Glamorgan and Gwent, its effect has been strictly limited in territorial terms.

The south Wales valleys are the cradle of Welsh industrial development—[Interruption.]—with politics of various sorts. We have all read Lewis Jones and we all know about little Moscow, the great tradition of Welsh Labour politics and the rapid growth of Plaid Cymru support in the industrial valleys. I am speaking with great affection about the south Wales valleys, which are so important to the cultural make-up of Wales. Recently, unemployment in those valleys has reached the same level as that in the 1930s. Each year, 1,000 people move from those valleys. Even in south-east Wales, the effect of inward investment and industrial development has been partial. That is my point.

There is also the problem of low pay. During the 1980s, Wales fell from fourth to ninth position among the British regions for male full-time manual earnings, from fifth to 10th for non-manual males and from seventh to ninth for professional women. Activity rates—which are a key indicator of the nature and health of an economy—among males of working age are 9 per cent. below the British average. Dependency rates, reflecting in part the migration of the young, which I mentioned earlier, are high. There are deep structural deficiencies.

Meanwhile, the economy of rural Wales, and therefore of its communities—economies and communities go together—are in a truly perilous state. That is no exaggeration. In agriculture, there has been a rapid reduction in the number of holdings and in full-time employment—a process which is not yet complete, I fear. We see the centralisation of many services, out of rural areas, and out of villages and small towns. Our nuclear power stations, which are important employers, face an uncertain future. In Dyfed, the closure of military establishments is dealing a devastating blow to many areas. There are deep and serious problems in rural Wales. There is widespread cynicism in Pembrokeshire about the Welsh Office's response to the closure of defence establishments there.

The former Secretary of State, in the run-up to the 1992 general election, established a west Wales task force which was charged with drawing up a strategy for the economic revitalisation of the area. Prestigious and able consultants were appointed, and it was announced that the strategy was to be complete and ready for action by September 1992. A seriously inadequate strategy document was made available for a meeting at Gwydyr house at the end of January 1993, several months late.

The key recommendation was that the task force should be revamped and that a new project director should be appointed. That was a key appointment. It was not until 25 April this year that the WDA was told that it was to be given the job of organising the new task force. Not surprisingly, the project director is yet to be appointed. All those months of lost opportunities have been mentioned by people working in the area. It has been a disgraceful affair from start to finish. The task force is, I believe, once more under way, and I wish it well. I have been positive in my response to the existence of the task force all along and I intend to continue to be positive, despite the serious faults in the way in which the matter has been handled.

Fundamental to the recommendations about the task force was the recommendation that the Fishguard travel-to-work area should be granted full development area status. Here we come to an important theme in tonight's debate, which is mentioned in the motion. There must be full development area status for the Fishguard area. It will 13e astonishing if that is not implemented, although such implementation should not be at the expense of the parts of Wales that currently enjoy assisted area status.

Rumour currently tells us that parts of Wales, including parts of my constituency, may lose assisted area status. That is entirely unacceptable. I hope that my remarks so far have highlighted the massive task that remain:; to be carried out in regional development policy in Wales. We need not a rundown, but a strengthening, of regional policy. There is scope for modification, for refinement and for changes in direction. There is a need to pinpoint for special attention the areas, already mentioned, that are suffering severe difficulties. I think especially of the south Wales valleys, areas in my constituency and areas in the north which need special attention.

It is accepted by the development agencies, including the DBRW, that we need greater emphasis on indigenous businesses, on the encouraging of local sourcing and on the creation of networks between businesses within areas. We need more emphasis on skills enhancement, on innovation, and on the availability of information of the highest quality to individuals, to companies and to public authorities. We need such information to be facilitated through the development of modern technology. All those themes need to be pursued more now than in the past, in a general context of strengthening regional policy and especially of maintaining assisted area status for the areas that have it now.

This is no time for downgrading, partly because that would convey entirely the wrong signal to the European Community. That point leads me to the second reason why the timing of this debate is opportune. EC structural funds are currently under review, so the months from now until the end of the year are important. It is vital that European regional development policy should be strengthened, because without a really powerful regional policy—this is perhaps the central issue—the effect of the single European market, the move towards a single European currency and monetary union will be devastating for peripheral and disadvantaged regions such as Wales.

Free trade and open markets can serve the interests of people, in the short term at least, as consumers. Open markets, open borders and free trade can also serve the interests of large, powerful organisations and conglomerates. As such, those developments have an inexorably centralising tendency, favouring areas that enjoy a competitive advantage. People are not just consumers, thank goodness; they are also workers and producers, and they are also members of communities with roots in cultures specific to particular places. Regional policy is a philosophical recognition, among other things, of that second aspect of human need—the need for people to be rooted in communities and to be infinitely more than merely consumers of goods.

The recognition of that need at European level is one reason why resources under the European structural funds were doubled between 1989 and 1993. That is why Maastricht envisages a further strengthening and development of regional policy. Wales is looking increasingly in the direction of Europe, and rightly so. Objective 2 status for regions seriously affected by industrial decline has been important in the industrial south-east and in the north-east. I am sure that hon. Members who represent those areas will wish to elaborate on that point.

As I represent a western constituency, I refer to the crucial importance of objective 5b status for Gwynedd, Dyfed and Powys. The £100 million provided for the integrated development operations programme has made possible road improvements. Regional development fund money has contributed to further education for 10,000 students in Dyfed alone. We have had the excellent Leader programme administered on the borders of my constituency and that of the hon. Member for Carmarthen (Mr. Williams) by Antur Teifi. It is a most exciting development. I was there not long ago at the opening of the new Telemateg centre. That programme was initiated under the Leader programme, and was a consequence of the fact that the area has objective 5b status.

The European regional development fund grant of £2 million will enable Stena Sealink to effect improvements to Fishguard harbour. That will make possible a third crossing, which is a crucial development for that port and for the southern corridor linking the Republic of Ireland through south Wales to the European continent. The fund has made an even more significant contribution to the development of Holyhead, which is crucial for the development of the central corridor.

I have given just a few examples. It is small wonder that Gwynedd, Dyfed and Powys seek to continue objective 5b status as essential to the development strategy. I support, as a person from the south, the wish of Aberconwy, Colwyn and Glyndwr to be included in objective 5b status. Clearly, those areas in the north belong to the same category. Currently the application for the new programme for 1994–99 is under consideration. This time it is a six-year programme. Here, time is of the essence.

I dare say that my hon. Friend will be interested to know that, five years ago, Aberconwy satisfied all the necessary criteria for objective 5b status. With the passage of time, Aberconwy has declined in economic terms. Does my hon. Friend agree that it is vital that its application this year should succeed?

That proposal, and any emphasis on it, will have my whole-hearted support. It is good that Gwynedd, Dyfed and Powys are united in their support.

As I have indicated, time is of the essence in considering the application for the new programme. It is crucial that the system be in place by the end of the year so that the local authorities may make timely arrangements for co-financing—which is difficult these days, local government finance being what it is—and so that programmes may get under way promptly at the beginning of next year. The Secretary of State must ensure that progress is not held up in any way.

It seems that one area of dispute concerns the proposal in the Commission's green paper published on 16 June that 10 per cent. of total funding be given to European Community initiatives—programmes initiated by the Community itself in response to specific socio-economic situations. It is reported that the British Government want the proportion to be 7 per cent. instead of 10 per cent. In this regard, my party supports the Commission. We want to see the development of a partnership between the European Community and local authorities. Community initiatives must be given their proper place. I should say, by the way, that I am told that such initiatives are a means of ensuring that additionality actually applies. That is, of course, of great importance to the people of Wales.

In any case, at least three of the initiatives that I want to mention are particularly relevant to Wales. First, as many hon. Members will no doubt want to emphasise, we want a commitment of support for RECHAR 2—something that is very important to former coal-mining areas. Secondly, there is Konver for areas dependent on military installations and suffering the effects of cuts in that field. That is, of course, highly relevant to Dyfed and, in particular, to Pembrokeshire, which are reeling from the effects of the closure of Trecwn and Brawdy.

Applications under the current Konver programme were to have been received by June, according to information that I received earlier this year. However, until recently local authorities were unaware of the criteria for projects, as the information had not been provided. That is very worrying. I hear that the deadline has been extended by a month, and I hope that the Secretary of State will ensure that we shall not lose out. It is important that such funds be targeted at places, such as those in Wales, where defence establishments have been closed and that there be no failure by the Welsh Office to formulate and process applications.

Thirdly, there in Interreg. It is essential that the maritime border between Wales and Ireland be recognised for the purposes of this initiative. Co-operation between local authorities in Wales and local authorities in the Republic of Ireland is growing. I have attended several meetings of representatives of Welsh and Irish authorities. This is a highly encouraging development. Access to lnterreg—a very substantial fund—would enable Gwynedd and Dyfed to benefit from development in the Republic of Ireland.

Indeed, there has been substantial development in the Republic owing to its objective 1 status and its eligibility for cohesion fund money. In particular, the development of the central corridor through Holyhead and of the southern corridor through Fishguard as Euroroutesroad and rail—is of vital importance. The existence of an autonomous European state out there in the sea west of Wales is a factor of major importance and of enormous advantage to Wales, particularly west Wales.

Mention of objective 1 status, which will take 70 per cent. of all structural fund moneys, brings up the question of eligibility for rural Wales. I hope that the Secretary of State will continue to pursue this matter with the utmost energy. Eligibility would be of enormous advantage to Wales because of the size of the fund and because 75 per cent. funding of capital projects with objective 1 status would be made possible. It would be quite unacceptable if rural Wales were not included in objective I status.

I have said little about the nature and direction of the development in Wales that we wish to see by means of regional policy. That has not been my prime purpose today. I have already touched on the need for the so-called peripheral regions to develop co-operation and to become cohesive areas that trade with each other and share the benefits of contacts. I am not very keen on the term "peripheral regions", as so much depends on what one defines as the core. Developments of this kind are to be seen in a very interesting way in the statement of intent prepared by the Irish sea partnership of local authorities.

Policymakers need to be aware of the fact that the principle of environmental sustainability must very soon become the prime consideration in economic development—something of which not many people are yet aware. We need to plan accordingly. The shift towards this kind of sustainability—ultimately the only kind of sustainability—will have massive implications for transport, trade and all other aspects of the pattern of production, distribution and consumption. That is something to which we are just beginning to wake up.

Ultimately, if economic activity is not environmentally sustainable, it is not sustainable at all. We hear these days, in very responsible and well-informed quarters, talk of the future of the planet and of mankind being at stake. This is not empty rhetoric. Coming to terms with that fact will have monumental implications for regional policy in Wales, among other things. That is something of which we must be aware now.

In Wales, there are particularly relevant issues, such as our enormous potential for renewable energy. It is possible that we need new instruments of policy to ensure that those resources are developed in such a way as to strengthen the local economy and to empower the local community and enhance local self-reliance, which is a fundamental tenet of environmental sustainability.

I should like to emphasise a particular principle—that, in the context of open European borders and a completed European market, a strong and effective regional policy is absolutely essential. Naturally, we—I refer not just to members of my own party—believe that by far the best way for Wales to advocate this principle within Europe would be as an autonomous nation directly represented in the Community. Until we achieve that status—and afterwards, of course—partnerships between the Community and Welsh local authorities will have a role. So long as there is a need for such a person, we shall need a Secretary of State for Wales who is a vigorous and a committed proponent of regional development. I hope that the current Secretary of State will confirm tonight that he is such a person and that he will prove it in action over the coming months.

8.9 pm

I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:

'welcomes the progress that the Welsh economy has made in recent years as a result of the Government's policies; and notes with approval that the Government intends to continue to pursue vigorously these same policies that have brought about this success.'.
The most pressing priority for Wales and the whole United Kingdom is recovery which will bring new companies and new products, strengthen our industries, raise living standard and, above all, bring more jobs. I agree with the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) about that, but I do not for a moment agree with many of his other points.

He said that we had to cut the Welsh Development Agency budget, but the budget over which I am presiding this year is a record in both cash and real terms. As we have seen in the past few days, it and many other factors about Wales are delivering the goods in terms of many new jobs coming to Wales. I assure the hon. Gentleman and the House that the WDA has a fine future just as surely as it has had a proud track record in recent years.

Will the right hon. Gentleman also assure the House that the Development Board for Rural Wales has a fine long-term future in continuing the work that it has done so well so far?

Our current plans are for a vigorous programme through that body as well as through the WDA.

I am glad that the hon. Member for Ceredigion and Pembroke, North welcomed the idea of partnership, although it is a pity that he almost choked when he used the word "success." He should be proud of the successes of Wales and those of the WDA. It ill behoves him to be jealous of success in the valleys, although I understand his wish to succeed everywhere. But if he is serious about winning votes from Labour in the valleys, he will have to be more enthusiastic about promoting the valleys as well as the other parts of Wales.

Labour's Front-Bench spokesman, the hon. Member for Caerphilly (Mr. Davies) laughs because he does not think that the 'Welsh nationalists could claim votes in the Welsh valleys. There will be more tension between those two parties as they rival each other to paint a portrait of gloom and conduct a Dutch auction of promises that they wil not have to fulfil.

Is the Secretary of State saying that the Conservatives will not contest the valleys? In the local elections, many votes which would normally have gone to the Conservatives went to Plaid Cymru, but that was because the Conservatives did not put up any candidates.

Of course the Conservatives will contest and win many more seats in Wales at the general election because of our economic success. In the long run-up to that election, there will be many disputes between the Opposition parties.

The west Wales task force was called into question in the introductory dirge by the hon. Member for Ceredigion and Pembroke, North. The WDA director for rural affairs is already acting as the executive on behalf of that task force beause we have not yet made a final appointment. He is doing that because local authorities are involved and wanted the job formally advertised. We are now doing that, but we do not want delay; that is why the rural affairs director is carrying out the task in the meantime.

Today I had the privilege of opening a new business centre at Milford Haven which is making a home for new enterprises in that part of Wales. I hope that the hon. Member for Ceredigion and Pembroke, North welcomes that. I went on to open a remodelled youth hostel at Trevine, which will also bring business and activity to that part of the national park. I want many more such schemes thriving there, based on the partnership that our activities are bringing to Wales. I wish to see maximum local involvetment in schemes funded by the EC, by the Government or by a variety of means. That is because locally driven and locally determined schemes and locally derived ideas are usually the best, and in a true partnership local people are needed to push ideas.

Of course the Government supported the idea of objective 1 status, but unfortunately the EC was not enthusiastic. We proposed it and there was no lack of enthusiasm by the Government; nor will there be any lack of enthusiasm in pressing other joint claims by the House to the EC in its review of regional funds and eligibility.

Does the Secretary of State agree that the sustaining of objective 2 status in Clwyd, Glamorgan and Gwent is predicated on the maintenance of assisted area status in those areas? Does he also agree that the Government have designated some of those assisted areas to be downgraded? Those areas will inevitably lose the possibility of objective 2 support as a direct result of London Government policy.

I do not agree at all. We shall urge Wales's case upon the Commission for our revised regional map for our own assisted area status and in the wider connection about which the hon. Gentleman asks. Later in my speech, I shall deal with the state of play on the assisted area map.

A dynamic enterprise economy delivers recovery. The luxuries of yesterday become commonplace today. The jobs of tomorrow will be making things which are still on the drawing board or have yet to be invented. In the depth of the 1981 recession, people asked where the jobs would come from. Few predicted the speed or intensity of growth in pharmaceuticals and electronics, in biochemistry and in services, but that growth was the hallmark of the British recovery and growth of the late 1980s.

In the 1950s most homes lacked television, but by the 1980s practically every household owned one. In the 1970s few had video recorders, but they are now regular features of the living room. In the early 1980s, the rich few owned a microwave; today a majority of Welsh kitchens sport one. So it may be, too, with home computers, video cameras, satellite and cable television and a host of new products.

The hon. Gentleman jibes that all those things were invented abroad. They were not, but I wish to see more such products invented and made in Wales and I hope that he shares that aim.

I trust that in moving this motion Opposition Members want Wales to prosper, but they look at only a small part of the story of how that can be brought about. Grants can help to clinch a deal or tip the balance with the marginal investment, but investors come to Wales or expand in Wales for many other reasons, which we must also encourage and support. Prudential Insurance, Toyota and Dow Corning all came without any regional selective assistance grant and they are all very welcome.

The Government have completed their review of assisted areas and have sent their proposals to the European Commission. If we judged by unemployment alone Wales would see its assisted area coverage fall from 85 per cent. to less than half its population, such has been the success in reducing relative unemployment in Wales compared with elsewhere in the country and in the Community.

Perhaps the hon. Gentleman would allow me to complete my point. He might need to hear it all before he puts a question.

I assure Opposition Members that the proposals put to the Commission are a much better deal for Wales than that, but they will have to be patient about knowing the final outline of the map. We shall announce the results when we know the outcome of the EC review. My aim has been to ensure that Wales gets all the help that it needs to continue recovery. I have taken structural change, remoteness from markets and proximity to other assisted areas into account. I have not sold Wales short. I trust that the EC will now back our judgment.

Would the Minister care to comment on activity rates in Wales? An examination of that aspect rather than a statement about the number of people employed shows a far worse picture than the one that he has just painted.

I have explained the factors that I am taking into account. I share the hon. Gentleman's wish to see higher activity rates. I am not satisfied with one person in 10 being out of work. There is much to do, and that is the purpose of all my actions at the Welsh Office.

The Minister says that he has taken proximity to assisted areas into account. Is that good or bad for Aberconwy, which is sandwiched between two such areas?

I hope that the hon. Gentleman can work that out for himself. I made a simple point and, on reflection, he should be able to answer his question to his own satisfaction.

Why do businesses come to Wales? I have asked business men this while encouraging them to do so. They tell me of many things that persuade them, such as the warmth of the welcome and the fact that Japanese, Americans, German and other people from far afield are made to feel at home.

Those business men are attracted to Wales, above all, by the quality of the work force, who are well trained with an excellent record of Labour relations. Good cost levels and a competitive exchange rate are also attractive, because companies are shifting production from the dearer areas of Europe. Also of significance is the fact that we have the lowest interest rates in western Europe. Other factors cited by business men include the availability of good premises, the beauty of the landscape and the quality of life.

It is worth noting the achievements that the country has put together. According to Cambridge Econometrics, the growth forecasts for 1993 reveal that that of Germany is set to be minus 2 per cent., that of France to be minus 0·6 per cent. and that of Spain to be minus 0·5 per cent. The economy of Wales, however, is forecast to grow by plus 1·8 per cent. Let us hope that that forecast is wrong and that the economy will grow by an even greater amount, as it well could.

The inflation rate in Germany, Spain and Italy stands at 4·2 per cent., and 4·6 per cent. respectively. That of the United Kingdom is 1·3 per cent. The interest rates of Germany and France are around 7·5 per cent. and those of Italy 10 per cent., while in the United Kingdom they stand at 6 per cent. That is the kind of undercutting that I like to do, and that is the way to promote business.

Unit labour costs are also extremely important to manufacturers. In the past year, those of Germany, Spain and Italy have grown by 8·3 per cent., 5 per cent. and 4·8 per cent. respectively. In the United Kingdom, however, they have been falling.

No, it is not because of low wages; it is because we offer high productivity and good rates of growth in productivity. Opposition Members do not like that, but it is true.

Economic recovery is what we want. The long dole queues across Europe are a malignant growth that we must cut out—the patient needs surgery. We want low levels of unemployment and high levels of investment, low levels of business failures and high levels of success, low costs and high productivity.

Cutting interest rates from 15 per cent. to 6 per cent. was the biggest job creation programme of all—£11,000 million of extra spending power was left with United Kingdom companies. That is money for research and development and for new factories. At last the investor. choosing between Britain, France and Germany, comes to us for the cheapest money.

Keeping taxes low gives rewards for success. Opposition Members, peddling the politics of jealousy, want to tax the entrepreneur more. If they had their way, those who create jobs or make profits would be taxed more highly than our competitors. Why, then, would those entrepreneurs stay? Why should new business men come, if more than half of their earnings would be taken by the state? Keeping taxes on profits the lowest in western Europe—33 per cent. corporation tax, with 25 per cent. for small companies—counts with investors and creates the right atmosphere for business success.

The reform of our labour laws has also been telling. Employers and employees alike need to know where they stand. Everybody's rights and interests should be protected in a clear and fair way. Sensible labour laws breed good industrial relations [Interruption.] Opposition Members laugh about everything apart from assisted area status. They obviously do not have a clue about how business works. They do not know what it is that attracts investors and creates jobs. I will tell them more, because I think that they should know.

In recent years, industrial relations have been transformed. Last year, across the country, there were only 253 stoppages—the lowest ever recorded. In Wales, the record is even better. Only 10 days per 1,000 employees were lost through strikes in Wales, compared with 24 per 1,000 in the United Kingdom as a whole and many more in most of our competitor countries.

Business needs freedom—freedom from red tape, from bureaucracy and from the encumbrances of vexatious rules imposed by vexatious minds. We cannot afford to put investors off with all the paraphernalia of the social chapter, as some Opposition Members seek to do. The best social welfare policy is one that delivers jobs. There is little point in extending workers' rights too far if all that results is that they get the sack because their employers cannot afford to keep them.

As the hon. Member for Ceredigion and Pembroke, North almost identified in his speech, underlying all is the need to promote free trade. Backing business in world markets can win orders. We must avoid or remove artificial barriers put in the way of global trading. Countries like ours, with strong manufacturing bases, cannot afford to let themselves be hemmed in by protectionism. Protected trade brings longer dole queues.

It is extremely encouraging to hear the right hon. Gentleman speak with such enthusiasm about free trade, and I agree with everything that he has said about it. Does he agree that one of the greatest encumbrances to free trade in the European Community is the fact that each member state has its own currency? Will he now become a convert to a single currency, which would facilitate free trade in Europe?

No, I do not accept that point at all. People can and do trade in a single currency of their choice—the common currency—and many already do so. The hon. and learned Gentleman has not done enough deals in international markets to know the modest cost of exchange transactions against the overall costs of the deal transacted. If Opposition Members spent more time talking to business men and understood the real issues faced by the wealth creators today, they might make a more constructive contribution to the debate. We should praise the entrepreneur, not undermine him. We should encourage him, not overtax him. We should see him as the job creator, not as the pariah of socialist mythology.

Government can, of course, do a lot to help. Government must provide the roads and railway lines. They must stand up for fair and open markets. They should provide help where high unemployment, massive structural change or remote locations need it. None of that will work, however, if the general policy for growth is wrong.

Wales has been the prime beneficiary of that approach. Let no one have any doubt about the fact that Wales is making it: Wales is leading the United Kingdom out of the recession. The recovery is gathering speed all the time. Unemployment in Wales is now 0·2 percentage points below the United Kingdom average. At the beginning of the recession it was 0·8 percentage points above that average. In May 1986, it was 2·6 percentage points higher. Long-term unemployment in Wales has fallen by 40 per cent. in the past seven and a half years. How I welcome that.

Thousands of new jobs have been created by investors from overseas, who have been attracted by the skills of the Welsh work force, the relatively low taxes and the good communications. My predecessors as Conservative Secretaries of State for Wales made enormous strides in investing in communications, developing strategies to meet particular problems—as the valleys programme demonstrates—and enabling the Welsh Development Agency to play its role in attracting development and promoting the visionary Cardiff bay scheme. I pay particular tribute to their special achievement in generating a spirit of co-operation in developing the economy of Wales which transcends many of the boundaries of politics and ideology. There is a team in Wales which is out to win for Wales, and I am proud to lead it.

International competition is getting keener by the day. I want more skill added to the products that we make. We do not want to be a branch plant economy making low-value products which are vulnerable to any downturn in world markets. We must strive for ever higher quality. Wales should lead in new products and quality goods. We must be at the cutting edge of innovation. We must not concentrate on inward investment success alone and neglect the need to develop industry at home. A great deal has happened and an enterprise culture is emerging in Wales. Between 1979 and 1991, more than 16,000 firms set up business in Wales and manufacturing output has increased by almost two thirds—more than double the increase for the United Kingdom as a whole.

How sad it is to hear the hon. Member for Newport, West (Mr. Flynn) say that it is fantasy. He should see what I have seen in recent weeks—great companies in Wales with great ideas.

It has been instructive and enjoyable to hear the wish fulfilment fantasy of the right hon. Gentleman at such length, but can he tell us why the most progressive firm in Wales, at the hard edge of technology, which developed one of Britain's greatest inventions in the past 22 years, has left Wales? That invention—the transputer—is now being manufactured in France and Italy. The transputer, manufactured at INMOS at Newport, has been lost to Wales as a result of Government indolence and failure to invest in it. The French and Italian Governments have been more than happy to invest in it.

I do not accept the hon. Gentleman's analysis. I wish that he had seen some of the firms that I have visited recently, which show how Wales is innovating, has many talented minds and is putting together a great record of success. I intend to give a special push to the work to encourage more entrepreneurship, more innovation and high quality business.

We have listened to 10 minutes of extremely optimistic cliches about the economy. The right hon. Gentleman anticipate that, in the next 12 months, the Welsh economy will grow by 1·8 per cent. Would he care to speculate about what has happened to the growth rate since January 1990? I suggest it has stood at minus 5 per cent. That is what the record says.

We know that there has been a recession. It has been universal across the western world, and it is regrettable. I am discussing how we get out of recession and how Wales will lead the way. The forecast of 1·8 per cent. was independent. I have said that I hope that it will be right. Indeed, I hope that we shall improve on that.

The training and enterprise councils exist to lift the skills and encourage the new businesses of Wales. The Welsh work force has been the single most important reason for success and will be so in the future. I want the TECs to do all that they can to raise skill levels, help the unemployed to get back to work, enable young people to start off on life-time employment, and help deliver a work force that is even better qualified and skilled, and better able to adapt to new demands.

Like many advanced countries, Britain is in the throes of her fourth industrial revolution. The first three saw us change from water power to steam power to electric power; from a dominant textile industry, to a dominant engineering industry, to a strong consumer products industry; from canals and carts, through the age of the railway, to motorways. The fourth revolution takes us on to brain power, from older industries to high-tech industries, from motorways to Telecom's digital highways. Skilling and reskilling Britain is the new imperative.

Excellence in education is central to that task. A good start at school and college is vital. I want the universities and colleges of Wales to develop their links with business so that industry knows what they can deliver and the education world in Wales knows what industry wants. We must encourage joint ventures, initiatives and exchanges of ideas and personnel to maximise the enormous opportunities before us.

I also want working for oneself to be an option. The brightest and best leaving college and university should not automatically want to become journalists, civil servants or commentators writing elegantly about Europe's decline—[HON. MEMBERS: "Or politicians."] No, nor politicians—but some of us were in business and industry before we entered politics. Graduates should want to plunge into business, shaping the future with new ideas for commercial success.

We are now embarked on changing the subject and style of debate in the European Community. After months and years of sterile abstractions and constitutional wrangling, we are turning the focus to the pay packet and life style issues which affect every citizen. The Copenhagen summit began to ask the right questions about jobs and recovery. Our Prime Minister placed Britain and British ideas at the centre of the debate. He persuaded others to confront the reality that during the years in which America created 30 million new private sector jobs the EC managed only 3 million. While Japan has 2·5 per cent. out of work, the EC has almost 10 per cent. EC labour costs are now a fifth higher than in the United States and EC non-wage labour costs are almost twice as high as in the United States.

In Wales since 1988–89, United States firms have created 7,261 jobs; Japanese firms 4,964 jobs, and German firms 3,126 jobs. That is because Wales is better than the EC average in many respects and as such has benefited from more new investment and new jobs. I do not want a low-wage society, but I do want a low-cost economy because that is how to guarantee prosperity. That means high productivity and good ideas.

Britain can now lead the EC debate about restoring competitiveness. I say to many, "Come and see what is happening in Wales." As the dole queues lengthen on the continent, Wales is winning new business and new businesses. In the past week, 1,000 new jobs have been created in Crumlin from ASAT, 480 new jobs in Gwent from Aiwa, a possible 1,000 new jobs from the British Coal Enterprise initiatives, and 240 new jobs from six companies announcing expansion plans. Over the weekend, I announced 58 jobs for Swansea at Addis and another 160 new jobs are on the threshold of announcement as we meet tonight. That is winning for Wales, based on an agenda for a competitive Wales.

Fortress Europe or castle Wales could not succeed. Turning away foreign investors or putting them off with high taxes, strikes or too many regulations is the road to ruin, not the path to prosperity—[Interruption.] I am glad that the hon. Member for Caerphilly think that it is so funny; I am sure that his constituents will be delighted to know that he giggles throughout a debate on how jobs can be brought to the valleys and his area of Wales.

Over a year ago, the United Kingdom persuaded the EC not to outlaw digital technology for satellite television, and not to make the Sky transmissions illegal. Two weeks ago, the United Kingdom quietly scored another important success in Brussels: we stood up for Welsh industrial interests. In so doing, we stood up for wider United Kingdom interests—indeed, for the future success of the consumer electronics industry in Europe as a whole.

Ministers agreed an action plan to help promote wide-screen and high definition television. We were able to secure a valuable commitment that UK-based manufacturers such as Sony will be able to participate fully and without discrimination in future research programmes into digital television technology. There are those in Europe for whom this will not be welcome news, but it is good news for Wales and for the House.

We helped to shape a sensible policy for a vital new tecinology. Companies appreciate that, and many consumers and future employees in that industry will come to thank us. Those who tried to stop Europe developing digital systems were carrying out the industrial equivalent of burning books because the ideas were said to be heresies. It would have been damaging, but it could not have worked.

The Secretary of State has mentioned a significant number of job gains in Wales. How many of those are in the counties of Gwynedd, Dyfed and Powys? Am I right in saying that the answer is virtually none? In view of the difficulties that have been faced in those westerly parts of Wales, can the Secretary of State propose any new strategies to overcome that problem in the near future?

The hon. Gentleman is right to say that the bulk of the jobs were in areas other than those that he mentions, but I have already described what I have been doing in west Wales. I said that I intend to back fully the work of the west Wales task force, and the hon. Gentleman should wait to see developments. I intend to do for west Wales what I am doing for south Wales and for all parts of Wales.

The British Government's case to the EC is the case of Wales, the cause of the whole United Kingdom, and the crusade for jobs throughout Europe: do not damage competitiveness by passing unnecessary laws; do not put investors off with all the paraphernalia of the social chapter; and do not keep out new ideas or technologies just because they were dreamed up elsewhere, but realise that it is a world market and understand that the best social policy for the unemployed is a job.

All those opportunities must be grasped if we are not to fall behind. Europe must wake up, for Asia's tigers are roaring. We must reply. We must do more to curb and then to cure the European dole queues. We must shake off the shackles which still hold the economy back from developing its full potential. Away with restraint, away with petty restrictions, away with the head-in-the-sand thinking which refuses to adopt new ideas or technologies just because they were not invented here—we in Wales must scour the world for the best production processes, the best management ideas arid the best products, and we must make sure that they are produced here in Wales and sent out again across the globe.

Wales at its best is world class, able to hold its own in any company across the globe. Products are better made in Wales and should be better designed in Wales. Wales must be free, dynamic and vibrant, taking on the world—and beating it.

8.37 pm

I welcome the opportunity to speak in this debate and thank Plaid Cymru for choosing this opportune subject. The Secretary of State's speech was stronger on ideology than on facts and exhibited no detailed knowledge of Wales or the Welsh economy. I was not sure whether it was his Llangollen Tory party conference speech all over again, or some old material rehash of a Rothschild induction course for junior clerical staff. However, it was a preparation for the great betrayal that is to come over assisted area boundaries.

Until we heard the Secretary of State's speech, we were looking for a commitment to keep the assisted area map of Wales roughly along its present lines, perhaps with some tinkering on the borders. We were not expecting to have the Secretary of State speak for well over 20 minutes without saying whether Wales would lose out from the boundary revision, in which he has been playing a major preparatory part—even if it was mostly before he became Secretary of State—through the alterations that we now expect before the summer recess.

We also expected to hear about the timing and to have a clearer restatement that we shall have an opportunity to debate in the House the specific implications for Wales of the changes. We do not want the announcement to be sneaked in on the last day before the summer recess, only to find that the only opportunity that we get to debate the changes will be in October, during the spillover part of the Session.

That would be wholly unsatisfactory. It is why tonight is a suitable opportunity—there may be another later—for the Government to give a cast-iron promise that the House, and in particular Welsh Members of Parliament, will have the opportunity to discuss the sort of damage that I now expect because of the little hints in the speech by the Secretary of State.

I am sure that the right hon. Gentleman did not mention for nothing, and with great pride, the three firms that had come to Wales in the past few years without any regional selective assistance. He was not telling us that as though Wales had won the triple crown; he was basically saying that if Wales could attract those three firms without regional selective assistance, who needs it?

The three projects include Toyota's new engine plant on Deeside. Because of surplus capacity in the motor industry, the EC would not permit any regional selective assistance for either the engine plant, which came to Wales, or the much larger assembly line, which many people thought would come to Wales, until, in the words of the previous Secretary of State, it was snatched away at the last minute. The assembly plant that Wales did not get is 10 times bigger than the engine plant that it did get. Whether that was also a great betrayal is a matter of dispute between the previous Prime Minister and the previous Secretary of State for Wales but one, Lord Walker.

The Secretary of State also mentioned Prudential Assurance, which is located in my home of Cardiff. He was careful with his words when he said that that firm came without any regional selective assistance. It would be interesting to know whether he is claiming that it came without any Government grant. It received another form of Government grant—I do not know whether it was an urban development grant or some other form of grant, but it certainly had a substitute grant equivalent to regional selective assistance. Therefore, it is wrong to assume that, if Wales loses regional selective assistance, it will still attract a flow of firms.

The third firm that the right hon. Gentleman mentioned was Dow Corning, which is also close to my home. It has a long-standing commitment to Wales and I am pleased that it continues to provide employment in the Barry, Sully and Penarth areas.

The Secretary of State responded to a point made by the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) about the size of the Welsh Development Agency's budget. The right hon. Gentleman contradicted what he thought was an assertion by the hon. Gentleman that the WDA's budget had been reduced, but that was not what the hon. Gentleman had said. In fact, he said that the Exchequer grant to the WDA had been reduced, which meant that it had to fund more and more of this year's expenditure by selling more and more of its family silver. It can continue to do that for only so long.

Obviously, the pearl in the oyster—if I can mix my metaphors—in the family silver of the WDA is the Treforest trading estate in the constituency of my hon. Friend the Member for Pontypridd (Dr. Howells), which is either largely on the way to being sold or has been sold. The WDA has only so many Treforest equivalents that it can sell. Now, half the WDA's expenditure must be funded not just by the sale of the odd piece of land or by producing a bespoke factory for a client and then selling it when it is built, but by selling industrial estates that have been built up over many years—60 years in the case of Treforest.

What the hon. Member for Ceredigion and Pembroke, North said was correct. The amount of money that the Government put into the WDA each year is being reduced, so the proportion that the WDA must find from its own resources is unsustainable. If it continues at the current level, selling Treforest this year, Deeside industrial park next year and Fforestfach the year after, in five years it will have nothing left. It is not in a position to build up the asset base that would allow it to continue disposing of core assets.

Does the hon. Gentleman accept that selling industrial estates is part of the process of consolidating an economy that is becoming stronger, or does he want Wales always to have a dependency culture economy?

I am not sure that the hon. Gentleman has posed mutually exclusive questions that cover all the possibilities on the waterfront. If both rents and capital values for land become unrealistically high—rents in Wales are now above those in the London area—there will be a major squeeze on the ability of firms to fund expansion. Too much of their money will disappear in rents, which have shot up to £4 or £4.50 per sq ft a year, which is much higher than in the London area. That is frightening because, if the grants are removed but the rents remain high, Wales will become a less competitive area for production. It will lose the low-cost advantage that the Secretary of State spent 25 minutes telling us was its most important asset.

Again, the Secretary of State espouses the message that we must believe in the success of the Welsh economy and that it is incumbent even on Opposition parties to trumpet that. Anyone who doubts that or who believes that there is still a long way to go is somehow a traitor to the marketing effort of the Welsh Office and the WDA—the team Wales, of which he is the self-appointed captain. He was certainly not appointed captain by anyone in Wales; he was imposed from the outside. That makes us sceptical of his desire to lead us in a particular direction, for which most people in Wales did not vote and in which they do not want to go.

We are also sceptical of the tendency of the right hon. Gentleman and his predecessors to overclaim success and to make the figures fit the marketing strategy. They believe that if we keep talking about success, success will come. We should look objectively at the statistics for employment and unemployment and for new factories and the jobs that they create, relative to the number of jobs being lost both through the closure of coal mines and in the steelworks and other traditional primary providers of employment in Wales. It is only by balancing the new jobs being created with the old jobs being destroyed that we can work out how well Wales is doing. During the last eight or nine years, hyping up the success of Wales has become an occupational hazard of being Secretary of State for Wales. We have seen another example of that tonight.

My fundamental case is that the reason why the repackaging of Wales has been one of the great success stories of Europe is not what has been happening in Wales, but simply the choice of marketing strategy by Lord Walker and Dr. Gwyn Jones, the chairman of the WDA in late 1988 and early 1989. It was a deliberate decision to market Wales as the great success story of all Europe's regions. It involved all sorts of tricks of the trade in redefining what was an inward investment project, and the construction of dustbin lists of huge numbers of projects, many of which did not exist or were double counted so that they would appear simultaneously in two counties.

Royal Air Force stations are now being counted as inward investment projects. There are two in the list produced for the past year—RAF St. Athan and RAF Sealand. Those are not conventionally defined inward investment projects. The list also includes brass plate changes in the ownership of firms that do not result in any gain of jobs—but sometimes result in a loss of jobs—being claimed as inward investment projects simply to reach the magic figure of the 201 such projects that apparently came to Wales last year.

Is the hon. Gentleman suggesting that his marketing strategy for Wales would be to say that everything is wrong and nobody comes to Wales?

Absolutely not. We need an objective, balanced figure. We do not want a rapid growth in the statistical physiotherapy service of the Government, massaging the figures and claiming that new jobs are being created when they are not. Those are not my words. Only the other day, I received a letter from one of the most successful counties in Wales about the claim to have 201 inward investment projects in the year from April 1992 to April 1993. Of the 201 projects, 40 were supposed to have come to the county.

I wrote to the county's industrial development unit to ask what it could tell me about the 40 projects and whether it was aware of them. It sent a letter last week to say that it was not aware of 26 of the 40 projects. More than half the projects appear to be unknown to the unit. That is not to say that the projects do not exist, but it is likely that they do not exist given the knowledge base of the local county council.

Does my hon. Friend agree that we object to neither the optimism nor the sense of the view that we have to sell Wales? That is not what is happening from my point of view. I am sure that hon. Members of all parties would not want the Secretary of State for Wales to believe everything that he hears from the Welsh Office. He could do worse than read the report of the Public Accounts Committee on safeguarding and creating jobs in Wales.

The PAC exposed a case in my constituency of 1,000 jobs that were said to have been created or protected. In fact, all that had happened was that British Airways had sold the factory to General Electric in America. No new jobs were created. I am glad that the factory was sold, because the new owners look like being good employers. In that sense, the factory was safeguarded. But we shculd not play games with statistics. That is dangerous because it undermines the authority of the Government and of the Secretary of State among the people of Wales.

My hon. Friend makes a powerful point about General Electric's takeover of the extremely successful British Airways engine overhaul plant. The factory was set up at Nangarw during the war as a shadow factory and has been an exceptional success ever since. That is typical of the kind of firms that we want to see in Wales. However, no new jobs arose from that takeover. It was brass plate investment.

Another example is when, through compulsory competitive tendering, a hospital got rid of its local catering staff and employed Gardner Merchant. That was classed as inward investment. No additional jobs were involved. Health authority or local authority staff lost their jobs, and Gardner Merchant had a contract. That was one of the inward investment projects in West Glamorgan that was claimed by the Welsh Development Agency and Welsh Development International last year.

One proposed project which the hon. Gentleman has campaigned against viciously is the development of Cardiff bay. The Government are to put £160 million into that project, which has been marketed throughout Europe. It will create thousands—probably tens of thousands—of jobs and make assisted area status unnecessary in south Wales and many parts of the valleys. How can the hon. Gentleman tell the House that he wants to bring jobs to Wales when he has campaigned so hard against the biggest and most important development in any city in Europe?

I am terribly pleased that I gave way to the hon. Gentleman on that point. He said that I had campaigned viciously against the Cardiff bay barrage project. I must defer to his expertise in matters of viciousness. We are talking about whether the assisted area map of Wales is to be changed. The hon. Gentleman has ideas that that project could take the Cardiff area out of the assisted area map and mean that it would not need that status. I am sorry, but I think that assisted area status is needed in Cardiff and the other areas of Wales where the status presently applies.

No. I must get on.

We are trying to work out objectively whether the jobs coming in equal the number of jobs going out. We are extremely pleased when substantial new employers move in. I cite the Bosch development at Pontyclun, the British Airways developments at Rhoose airport and Llantrisant on the way to Tonyrefail" the Trico development in the constituency of my hon. Friend the Member for Torfaen (Mr. Murphy), the Sony expansion at Pencoed, the Toyota engine plant at Deeside and obviously the two new plants at Crumlin which were announced by the Secretary of State last week at or near Welsh Question Time. Those are eight extremely important new pillars of the 'Welsh economy. I am sure that they will provide hundreds of new jobs in the next few years.

Those eight projects are the only ones of which I am aware that have been set up in the past three years that have the prospect of employing more people than a typical coal mine. I accept that Welsh coal mines are smaller on average than pits in Yorkshire and Nottinghamshire. Welsh pits employ about 400 or 500 people. The problem is that we see coal mines closing and balance the job losses against the new projects of coal mine size that have come in.

Is the hype justified? Is the success story that has put at risk so much of our development area status justified? Two points arise. If one packs out the inward investment to produce, say, the 201 projects last year, it has a depressing effect on encouragement of local business in Wales, to which the Secretary of State referred many times. If the Government keep emphasising the importance of one statistical indicator—inward investment—they make self-generated investment seem second-class.

The Government's emphasis on inward investment has had a depressing effect and the Secretary of State should examine it. We now have a new chairman of the Welsh Development Agency and he should examine the psychology of encouraging the local business culture.

We must also consider how unemployment is calculated. When the United Kingdom Government decide whether to reduce the number of areas covered by assisted area designation, 75 if not 80 per cent. of the weighted factors that they take into account relate to the headline count of unemployment. When the European Community draws the map of regional development and assisted areas, it looks much more at gross domestic product per head.

Headline unemployment was a reasonably reliable indicator until about 10 years ago. It is decreasingly so. People might argue that the attacks on the validity and objectivity of the unemployment count should apply evenly across the regions and that, therefore, the relative status of Wales should not be affected.

However, we can see by comparing the level of employment with the level of unemployment in Wales that taking so many people off the unemployment register and putting them on to the sickness benefit register has had a particularly strong impact in Wales. It has not had such a strong impact on the south-east of England, largely because unemployment is so new that the area does not have a comprehensive employment service to get hold of the unemployed and say. "Wouldn't you rather sign on sick instead? It will get you off the register and give you more benefit."

The ultimate hypocrisy of the Government is that, having successfully persuaded so many people in Wales to sign off the unemployment register and go on to the sickness register, the Prime Minister says that he cannot believe that so many more people are sick in the light of all the money that they are spending on the NHS; so he then attacks sickess benefit. People will then be pushed back on to the unemployment register in the autumn after the changes which we fear will come. That would be seen badly in Wales.

The Government may have wanted to reduce the headline count of unemployment in the first three months of this year because they thought that it would make confidence lift off. It will be pretty tough if the Government push those same people off the sickness register back on to the dole once they think that the reduction in unemployment has taken off. We want objective data on sickness and unemployment benefit, so that there is an accurate measure across the country of which regions are doing well and which are doing badly and need assistance.

Another feature of the Welsh Office statistical massage parlour is that we arc told that we are the beneficiaries of economic miracles in our constituencies, whereas unemployment has increased 20 per cent. in my constituency and 22 per cent. in Monmouth. I asked the Government for figures on the number of jobs lost by outward divestment, through jobs moving overseas. The Welsh Office says that it cannot provide such figures because it does not collect them. It measures the jobs coming in, but not those moving out.

This is the good news only Government. They believe in purveying anecdotes as if they were objective statistics. My hon. Friend cites a classic example of the Government choosing not to consider outward divestment because it does not fit in with the marketing strategy. We want a statistically objective count of unemployment and employment, so that we may identify which areas need assistance.

Does the hon. Gentleman accept that manufacturing output in Wales has increased 25 per cent. since 1986? Is that not a general statistic rather than a detail plucked out of the air?

The hon. Gentleman is right, in that it is a general manufacturing statistic—but one can always pick out a favourable statistic as though it were a general principle. Is the hon. Gentleman suggesting that the travel-to-work area that he represents can dispense with assisted area status? I will not press him to respond immediately because that could be embarrassing for him.

We understand that Newport is in peril of losing its assisted area status, despite the statistic that the hon. Gentleman gave.

We further understand that it is possible that the Cardiff travel-to-work area will be split in two, along European regional development fund objective 2 lines, so that southern Cardiff and the southern part of the vale of Glamorgan will remain an assisted area, whereas the northern part will not. Presumably, the splitting of travel-to-work areas will occur in London, and that would set a precedent.

We want to know how much assistance will be transferred out of Wales to the southern coastal towns. I see the hon. Member for Hastings and Rye (Ms. Lait) lurking on the Conservative Back Benches, and I do not imagine that she is doing so for no purpose. I do not think that it is out of her interest for Wales; rather, it is for what she can grab from Wales. Naturally, that worries us.

Wales has a long way to go before it reaches the economic self-sufficiency that will enable it to do without subsidies. We noted all the exciting announcements made by the Secretary of State and his predecessors, and all the claims that Wales can be safely attached to the four great motor regions of Europe—Catalonia, Baden-Würtemberg, Lombardy and Rhone-Alpes. If they are the wheels of the Europe's motor regions, Wales is the exhaust pipe. We are getting there, but we have a long way to go. We cannot afford to leave it to a Secretary of State who is a bird of passage and who will be looking for promotion away from Wales. We need a Secretary of State who represents Wales and who is completely committed to the interests of Wales.

9.2 pm

It is with some temerity that I intervene in a debate chiefly relating to Wales, but the motion makes reference to regional development in the United Kingdom and in peripheral regions, and the hon. Member for Cardiff, West (Mr. Morgan) said that the southern coastal towns are quickly turning into peripheral regions.

I am a great supporter of regional development. Coming as I do from Scotland, I remember when, 30 years ago, Rootes came to Linwood—two miles from my home at the time—and the destabilising effect that that had on the local economy. I remember also IBM moving to Greenock and providing jobs for many women whose husbands were working in the shipyards that so signally failed to compete.

Later, there were road, motorway and other infrastructure developments, new factories, high-quality communications, land reclamation, tax breaks, rate relief and seedcorn capital—just the same as in Wales. The policy was very successful, despite the whingeing from the Opposition Benches.

A graphic measure of regional development policy success is that historically, Scotland and Wales were the first to enter a recession and the last to emerge from it. This time, it is reckoned that, in general, Scotland and Wales were the last in, suffered less drastic recession than elsewhere, and are emerging from it earlier. Because of the success of the regional development policy, half the personal computers sold in Europe are made in Scotland.

It takes about an hour to drive the 60 miles from Glasgow to Perth. On a good day—perhaps I should not admit it—I can drive from London to Cardiff in under three hours. The train takes two hours.

Unemployment throughout Wales is 10·2 per cent. There are only three constituencies where unemployment is above 13 per cent. In Hastings and Rye it is 13 per cent.; in Sittingbourne and Sheerness 14·6 per cent.; in Thanet 16·5 per cent.

A comparison of the coastal towns of the south-east with Wales and Scotland is dramatic. For instance, Hastings is 67 miles from London, a little further than it is from Glasgow to Perth. During the day, it takes a minimum of two hours to drive those 67 miles. It often takes two and a half hours. The train takes an hour and a half—about the same time as it takes to get to Doncaster. The southern half of the A21 is still single carriageway. The A259, the route to the channel tunnel, the continent and prosperity, would be recognised, bar the tarmacadam, by the smugglers of the 18th century.

Hastings has some home-grown companies, but it was a branch plant economy, which is how the Secretary of State described Wales historically. When the recession hit, there were the inevitable closures. Our biggest employers are the local council and the health service. While both are vital, neither can be called a wealth creator.

We have high levels of drug and alcohol abuse, many single-parent families and alarmingly high levels of child abuse. Wages are well below the national average—reminiscent and indicative of inner-city problems. one of the indicators for assisted area status. The bleak s. atistics are similar to those in Scotland and Wales 30 years ago, when they embarked upon their regional development policy. We have seen that policy work. We must help other areas which need it now.

While I understand and appreciate that the Welsh, the Scots and other regions like the north-east and the north-west would like to hold on to what they already have, places such as Hastings, Sittingbourne and Thanet need to benefit as well. We are not asking for much when we ask for assisted area status. We can only get selective and enterprise grants, help with industrial premises and the consultancy services of the Department of Trade and Industry.

There are new poor areas in the United Kingdom. The south coast towns are part of them. We must adjust our development policies to take these changes on board. We must ensure that it is not only the United Kingdom Government who are aware of the empty factories, the length of the dole ques and the harm that is being done to the good and honest people we see around us.

The EC Commissioner, who provides so much of the money now, needs also to be aware of those changed circumstances. Karel van Miert, the commissioner responsible, should visit the rich south-east, the area that he says is structurally and economically strong, and see the problems for himself. He must take on board the successes of the traditional development areas and learn about the difficulties of the new ones.

We must change our regional devlopment policy, so that it recognises the new realities and enables areas such as the south coast towns, which are weak, to become as economically strong as, dare I say it, Wales and Scotland. We must refocus our regional development policy so as to enable all the British Isles, as they need it, to benefit from it.

9.8 pm

I shall be brief, because others want to speak in this short debate.

The speech of the hon. Member for Hastings and Rye (Ms Lait) was one of the best critiques and condemnations I have heard of 13 or 14 years of Conservative rule and of the kind of ideology that the Secretary of State—I do not want to be rude to him—has espoused since the early 1980s.

When the Labour party was in power many years ago, what did it do to help peripheral towns on the south coast?

I find that interesting, but I do not think that unemployment was as the hon. Lady described. I mean no disrespect, but apparently Hastings and Rye are now on the periphery. That shows the general decline in the British economy, vis-a-vis the European economy, in the past 13 or 14 years. I cannot see how that decline will be arrested, but I shall return to that point later.

I shall concentrate on assisted area status for my constituency and the effect that removal of intermediate status would have on it and on much of west Wales. I shall try to argue briefly that we deserve an uplift to the full assisted area status that we enjoyed until the early 1980s when, in his review, Sir Keith Joseph, as he then was, removed Llanelli's full development area status.

A few months later—I am not arguing cause and effect—a large private steel works, which had operated for a long time, closed for various reasons, with the loss of 1,200 jobs and ancillary jobs. Llanelli never regained its full development area status. The map that was drawn by Lord Joseph seemed to he cast in stone, and no changes were allowed to it.

Will the right hon. Gentleman confirm that, when he was a Treasury Minister in the late 1970s, overmanning in the British steel industry was at crisis point—not unlike, perhaps, the present overmanning of the German steel industry?

I do not dispute that many sections of British industry were overtnanned for a considerable time, and much had to be done to reduce that overmanning, but the point that I am making is that, in 1980–81 my constituency lost assisted area status. We have not recovered from the closure of the steel works, which was privately owned rather than nationalised—I do not want to waste time on an argument over its ownership, because it is not important.

In 1979, fewer people were unemployed in my constituency than they are today, and income per head was higher. Economic activity rates were higher and—perhaps overmanning was a small part of this—40 per cent. of the work force in the Llanelli area were employed in production. The Secretary of State says that Wales is making it. That may be so, but in Llanelli they are making less of it today than they were 14 years ago. I accept that the statistics are somewhat simplistic, but the figure is now down to about 30 per cent.

Since 1979, the standard of living in my constituency has declined. That industrial decline is mirrored in Wales, which is the poorest region of Britain, with the lowest income per head. Unemployment is higher than in 1979. Activity rates in Wales are lower than in 1979.

That also mirrors the decline in the British economy relative to western Europe, which was shown by the speech of the hon. Member for Hastings and Rye. There has been a consequent effect not only for our economy and our industry but for our public services, with a breakdown in community discipline and family values and disciplines.

The M4 motorway has brought great benefits, but the theory was that it would have a trickle-down effect. I see the Secretary of State nodding. In the 1980s, the teenage radical right advocated the trickle-down theory in the economy.

I do not wish to be rude—not as rude as my hon. Friend the Member for Cardiff, West (Mr. Morgan)—but I do not know whether those on the teenage radical right have grown up or whether they still believe in the trickle-down theory, which has largely been discredited. In any case, it has not worked with the M4.

There has been little investment west of Swansea in places such as Llanelli, which has a great manufacturing, engineering and mining tradition. As we have heard, most of the investment has gone further east, so the M4 trickle-down theory has not worked. It was always argued that more factories would come to Bridgend, until all the land was taken, and that they would then go to Neath and Port Talbot—or vice versa—and then Swansea. My constituency has not received minor, let alone substantial, new investment in manufacturing since 1979.

I do not believe that assisted area status, or inward investment, as it is called, is a panacea. We should begin by examining local industry in terms of sub-contracting, because many major firms, especially motor firms, sub-contract. Llanelli contains quite a few motor manufacturing and component firms. We should consider ways of improving the quality of what is produced by Welsh sub-contractors.

Assisted area status is not a panacea, but it is of enormous help to a constituency like mine in obtaining manufacturing and engineering investment, which would not only provide jobs and hope for our young people but would preserve the many skills that we still have. Those skills will not last much longer unless we have the investment to enable us to take advantage of them.

The Secretary of State will no doubt say that I am whingeing and offering nothing but doom and gloom. lie made great play of his years in the City and his time at Rothschild, which I am sure was valuable experience. However, I do not think that anyone from Rothschild or any other merchant bank who was considering the world economy would be too optimistic about inward investment to my part of the United Kingdom. The world economy does not look very good, and the unification of Germany does not encourage inward investment from Europe to the west of Britain.

Perhaps the Secretary of State secretly agrees that the combination of a single market, the Maastricht treaty and the channel tunnel—the latter involves Hastings and Rye—will make it even more difficult to attract the investment that I believe we need, certainly west of Swansea and perhaps west of Bridgend.

To me, the treaty means the centralisation even further away of economic and monetary power. It takes power from politicians and puts it in the hands of technicians. It means that politicians are unable to react to the problems caused by the marketplace. I shall not continue with that argument, because we have said it all before.

The hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) did not seem to know where the periphery was. The hon. Member for Hastings and Rye believes that it is in Hastings. I can tell the hon. Gentleman where it is—he is in it. Aberystwyth is the periphery; beyond Aberystwyth is Ireland and then the United States. We usually consider Britain in terms of north and south, but let us consider it in terms of east and west. East Britain does quite well but, if one draws a line down the middle, west Britain—especially parts of Wales—will find it extremely difficult to compete.

The nationalists' motion states that the European Community is interested in the periphery. The Maastricht treaty is concerned only with the periphery in Ireland, Spain, Portugal and Greece but not in Wales. Wales does not feature in the infrastructure money, which, in any event, amounts to very little. It is no good the hon. Member for Ynys Môn (Mr. Jones) waving a document at me. I am perfectly capable of reading the Maastricht treaty, and I know that the motion would do nothing to alleviate the treaty's centralising tendencies. I would have thought that the fact that we are on the periphery is a strong argument for not changing our assisted area status.

With great respect to the hon. Member for Hastings and Rye, if I was a young person at Rothschild carrying out an analysis of economic development, I would have examined the south and south-east of England. The President of the Board of Trade has advocated the east Thames development—which no doubt the Secretary of State considered in his previous position—quite rightly and logically in the context of the south-east of England. It is clear that that area will develop and benefit because it looks towards Europe, whether it looks east or south.

In terms of the European Community, I would not be too worried about the south and south-east of England. It also has the channel tunnel. Boulogne is much closer to London than Llanelli. The problem is that the south-east will develop, as an economic area, as part of the Pas de Calais. Eventually, people will live in France and come to work in England or vice versa. That area will become partly English and partly French.

We must consider the development of Europe and the centralisation that will inevitably take place as a result of the internal market and the Maastricht treaty. I accept that there is high unemployment in the south of England, but that is mainly due to a debt-ridden service economy which is no longer producing. Only about 5 per cent. of the people who work in the south of England actually make things, and that 5 per cent. are mainly engaged in armaments factories. The rest do not make anything.

Although I have sympathy with the constituents of the hon. Member for Hastings and Rye who may be out of work, we should not argue from the particular or on a short-term basis. The south and the south-east will develop as Europe develops. However, the areas that my colleagues and I represent will find it more difficult to develop.

I make no special pleas for my constituency. However, I believe that we have a very good case for bringing back the full development area status to my constituency which we lost in 1980 before the major steelworks closed. The situation changed completely, and it has not returned to what it was in 1979. We should at least retain our intermediate status. I believe that there is a very strong case to upgrade that to full development area status, so that we can obtain the investment to allow us to continue to make things and to make more things to contribute to the economy of Britain.

9.22 pm

I was surprised that Plaid Cymru chose this topic for debate, in view of the central plank of its policy—that Wales should leave the United Kingdom. It seems to me that if that were to take place, investment in Wales would be decimated. It is very easy for a party with no prospects of forming a Government to argue for increased resources without saying where those resources will come from.

The hon. Member for Cardiff, West (Mr. Morgan) described Wales, in his usual belittling fashion, as the exhaust pipe of the motor of growth. It would have been better if the hon. Gentleman, who has not stayed in the Chamber—[ Interruption.] I apologise to the hon. Gentleman. He seems to have woken up. Would it not have been better for the hon. Gentleman to describe Wales as a fiery dragon on the bonnet? That is far closer to the reality of the current performance of Wales relative to other European countries.

Unemployment in Wales is lower than the United Kingdom average for the first time since 1924. Is not that good news? Is not that something that the hon. Gentleman should mention so that the people of Wales will be encouraged to build on success?

Since 1979, self-employment in Wales has increased by more than 36,000 to 158,000 people. During the 1980s, Wales gained an average of 1,400 new businesses a year, making a current total of 87,000 businesses. All that we hear from Opposition Members is about jobs lost. We do not hear about the jobs that have been created or that the number of employees in manufacturing has increased by 5 per cent. since 1986. We do not hear from them that manufacturing output is up by more than 25 per cent. since 1985. We do not hear from them that there are 800 new manufacturing plants in Wales since 1980, providing more than 50,000 new jobs, and we certainly do not hear from them about the 1,100 inward investment projects that have been created since 1983. Let us have an end to their doom and gloom and let us start fighting for Wales.

9.25 pm

Mr. Alex Carlile