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Column 1100offer quicker journey times and certainly should. The proposed large-scale pilot autoguide system will allow local authorities, the police and the Department to evaluate in detail the likely effects of a commercial system, including the effects upon minor roads. The Secretary of State would be able to impose licence conditions about the roads on to which the system could direct traffic. This power is in clause 10(8)(b).
It is quite important not to set down in advance that local authorities should be able to have a veto. When the hon. Member for Deptford was talking about integrated transport authorities, I was reminded of the county London Plan 1943, the Bressey report 1938 and "History of the London County Council 1889-1939", by Gibbon and Bell. From those we see that it was local authorities that banned the expansion of the trolley bus system in London because they did not want to see overhead wires. We must regret those decisions ; it would have been nice to see an expansion of the trolley bus system. It is important that we get the experience of the pilot autoguide system. Then we shall have better information on whether my assertion is right that we should end up with less rat-running, or whether the fears which the hon. Lady has quite rightly expressed are justified. My hon. Friend the Member for Derby, North (Mr. Knight) raised the question of the private sector and whether the Secretary of State would use his powers. We hope that he will not have to use his powers, but we have to make provision in legislation to cover eventualities. Some of us may remember the little difficulty we had on Friday in getting the cashless parking Bill through. That was to provide primary legislative cover for local authorities to charge for off-street car parks without using cash. It would be ridiculous to lose this opportunity of giving the Secretary of State the necessary powers, but we hope it will not be necessary for them to be used. My hon. Friend the Member for Keighley and also, I think, my hon. Friend the Member for Derby, North asked questions about clause 10 and the conditions which the Secretary of State might seek to include in licences for the operation of autoguide and other systems. As I have said, we hope that it will not be necessary to use these powers.
The hon. Member for Deptford asked about the effect of autoguide and similar systems on road safety. It is quite plain that if people know where they are driving--this applies to autoguide as well as to conventional signing and to the digital radio system to which reference has been made-- they get there more quickly and by a shorter route and do not have to cover unnecessary parts of the route. That reduces the exposure to risk. It also means that they can concentrate on their driving instead of wondering whether they are going in the right direction. So all the ways of improving signing are important, including variable message signs on motorways, the BBC's radio data system and a review of the traffic signs regulations.
I mentioned that 1989 is the year of the sign. We reissued our little booklet and also a traffic advisory unit guide to road signs last week in Brighton at an exhibition. We are making major moves forward. Anyone who wants can go and look at the demonstration sign project in Guildford or the A3 signing which is coming forward and will see some of the improvements. We hope shortly to announce new ideas for signing in London and autoguide will fit in with the system, subject to Parliament. I ought to say perhaps that as a result of the agricultural crisis we
Column 1101have changed the name of the illustrative motorway service area from "Good Egg" to "Good Food", in order to keep up with the times. My hon. Friend the Member for Beckenham (Sir P. Goodhart) has reminded us again of his enthusiasm for a London traffic management unit. At the moment we have organised control of the traffic system. In King's building we have the Metropolitan police with their supervision. My hon. Friend has made various suggestions following up his Adjournment debate in December and more recently there have been reports in the papers of steeper parking fines, red lines on important routes and better parking enforcement generally. All this has been very much welcomed--except by those who have been caught. I met a group of bus and coach operators this morning who also mentioned my hon. Friend's proposals.
The hon. Member for Deptford talked about autoguides and Berlin. Berlin is a scientist's dream. There is no commuting traffic ; people cannot drive in from the suburbs. The traffic management arrangement is significantly different from London's. We shall continue with the close Anglo-German co- operation.
There is much support in Europe for the British approach, which places the investment responsibility with the private sector and control and licensing in the public sector with the Secretary of State.
I will finish by referring to the eyesight point. Most of the people who have the highest involvement in injury accidents have the best eyesight. The problem in general is not people's quality of vision but the processing of the information they get through their eyes. It can be befuddled by drink or misguided by youth and inexperience. I can see that the hon. Lady does not agree with me. Perhaps we had better have another meeting with the college of opthalmologists--if that is the appropriate group--and see if we can find scientific evidence from this country or other countries showing that eyesight makes a major contribution. I suspect that if one could get younger drivers to see a psychiatrist one would be able to spot the ones who will have real trouble.
My hon. Friend the Member for Faversham referred to motorists from other European countries and that is a point that we can perhaps take forward. As I said on Tuesday, there is no provision for endorsing foreigners' licences. Most countries do not have that kind of system.
Column 1102People in many more countries are interested in our systems and are going to Swansea to see how they work. In time, the European Community may move forward to our system, so that people cannot wantonly commit offences in other countries. However, courts have power to seize the licences of foreign drivers when they commit serious offences.
My hon. Friend the Member for Keighley talked about light goods vehicles. That point follows the consideration of minibus driver licensing as well. My hon. Friend the Member for Faversham talked about the format and durability of drivers' licences. We think that they are reasonably good, but we will see whether we can improve the plastic wallets for licences.
Having heard hon. Members' comments, I welcome the general support for both parts of the Bill. Whether we are concerned with the future of motor cycling, of autoguide or the other provisions, I hope that we can move forward and increase safety and provide a better service for those who use the roads.
Question put and agreed to.
Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills) .
Queen's Recommendation having been signified--
That, for the purposes of any Act resulting from the Road Traffic (Driver Licensing and Information Systems) Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of any expenses incurred by the Secretary of State in consequence of that Act.-- [Mr. Kenneth Carlisle.]
That any Act resulting from the Road Traffic (Driver Licensing and Information Systems) Bill [Lords] may--
(a) authorise the inclusion in licences for operating driver information systems of terms requiring the rendering of payments to the Secretary of State ; and
(b) provide for the payment of those and other sums into the Consolidated Fund.-- [Mr. Kenneth Carlisle.]
[Relevant document : Third Report of the Energy Committee of Session 1988-89 on British Nuclear Fuels plc : Report and Accounts 1987-88 (HC 50).]
Order for Second Reading read .
The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer) : I beg to move, That the Bill be now read a Second time A prime purpose of the Bill, defined in clause 1, is to raise the financial limit imposed on British Nuclear Fuels plc by the Nuclear Industry (Finance) Acts of 1977 and 1981. The limit is currently set at £1,500 million, and clause 1 proposes that it should be increased to £2,000 million.
The financial limit consists of payments for shares in the company, the principal on outstanding Government loans to BNFL, and the guarantees given by the Government in support of BNFL's borrowing from commercial sources. We need to raise the limit so that BNFL can borrow with Government guarantees the sums required to complete its current investment programme.
To keep its place in the forefront of the nuclear fuel cycle industry, BNFL must invest for the future, and it has in hand a massive capital programme amounting to more than £5 billion to the end of the century, mainly in support of its waste management and reprocessing business at Sellafield.
The company raises its finance in the private sector, backed by Government guarantee, and under successive Governments has been classified as a private sector body for public expenditure purposes. Its borrowing is therefore not part of the public sector borrowing requirement. Guarantees are issued only for specific loans, and each application for a loan guarantee is scrutinised by the Department of Energy, the Treasury and the Bank of England before we agree to accept the liability.
BNFL expects to breach the existing statutory limit in 1990. As acknowledged yesterday by the Energy Select Committee, the main reason for this is BNFL's need to finance, up to 1992, £500 million worth of extensions and improvements to the low active waste treatment plants at Sellafield. Those plants ensure that active effluent discharges are kept as low as reasonably practicable. Radiological effluent is already less than 5 per cent. of what it was in 1978, and with this further expenditure should be reduced to near zero by the mid-1990s. Expenditure on the scale required to achieve that level was not envisaged when the current limit was set in 1981. It is expected that BNFL's total borrowings will peak at around £1, 700 million over the next four years, provided that all present income projections are realised. In the mid-1990s, as the plants now being built come on stream and start to generate funds, BNFL expects to have sufficient funds available internally to meet its capital expenditure requirements and progressively to pay off its borrowings.
BNFL has been consistently profitable since its inception, and has provided the Government, as shareholder, with a dividend for the past 12 years. In 1987-88, the dividend payment amounted to £36 million. There is no current expectation, therefore, that we would need to seek any further increases in the limit.
Clause 2 of the Bill will enable the costs of nuclear safety research which the Health and Safety Commission
Column 1104sponsors to be recovered from nuclear site licensees and licence applicants. The House will be aware that the Secretary of State for Energy announced last year that the role of customer for much of the safety research currently sponsored by his Department would be transferred to the Health and Safety Commission as from 1 April 1990. That will enable the commission to ensure the future adequacy and balance of nuclear safety research programmes. The programmes will be managed by the Health and Safety Executive on the commission's behalf.
The principal objectives which the commission will be asked to fulfil will be set out in agreed guidelines provided by the Secretary of State for Energy. The commission will be charged with ensuring that adequate and balanced nuclear safety research programmes continue to be carried out, and that the results of the research are disseminated to maximise their contribution to safety. This will, of course, require the commission to maintain close collaboration with the nuclear industry and the UKAEA so as to be fully aware of what safety-related work the industry is doing on its own account. The commission is establishing machinery to do that.
The commission will, however, also need to sponsor research on its own account to ensure that the totality of research is adequate and it will need to see to it that a sufficient independent nuclear safety research capacity is maintained.
The present cost of the research being transferred is about £20 million per year. The effect of the transfer will therefore be to reduce Government expenditure by that amount. Clause 2 will enable the Health and Safety Executive to recover the costs which it incurs in connection with its licensing function from nuclear site licensees and applicants for licences.
Costs relating to a licence application are not at present recoverable until a licence is granted, and cannot be recovered at all if the application is refused or withdrawn. The new provisions will enable the Health and Safety Executive to recover its costs before, and whether or not, a licence is granted.
Clauses 3 and 4 make technical amendments to the rules on insurance cover for meeting third-party compensation claims in the event of nuclear incidents. Section 18 of the Nuclear Installations Act 1965 sets out the method for determining the maximum contribution which the Government might make towards meeting the cost of compensation claims. Factors which have to be taken into account are those amounts which are available from nuclear operators' insurance arrangements, and any contributions which may be available from other Governments under relevant international conventions.
At present the UKAEA, because of its position as a public sector body, is not required to cover its liabilities by commercial insurance arrangements. However, following the Atomic Energy Authority Act 1986, the authority's operations are now being undertaken on a more commercial "trading fund" basis, and occasions may arise--for instance, when a trading partner is involved--when commercial insurance is considered a more attractive option than the self-insurance which is normal for Government bodies. This clause will remove any doubt which might exist about whether funds available from any such commercial insurance should be taken into account when computing the Government's contribution. It also removes any possible doubt about whether insurers would have a liability to pay.
Column 1105Clause 4 is designed to overcome an unintended defect which has come to light in the drafting of the Nuclear Installations Act 1965. It will avoid the need for new insurance cover to be taken out when a new nuclear site licence has to be issued for purely technical reasons--for instance, where the boundaries of an existing site are extended.
Clause 5 makes the necessary changes to our domestic law to enable the United Kingdom to ratify the international convention on assistance in the case of a nuclear accident or radiological emergency, widely known as the mutual assistance convention. That is one of two conventions negotiated under the auspices of the International Atomic Energy Agency following the accident at Chernobyl. The other relates to early notification.
We need to make no changes to the law in respect of the early notification convention, but we intend to ratify both conventions at the same time. The Government have already agreed to act as though bound by the two conventions.
Before ratification of the mutual assistance convention, two changes to our domestic legislation are required. Clause 5 makes the necessary financial provision to enable payments to be made in the event of the United Kingdom responding to a request for assistance and to receive payments if we decide to seek the reimbursement provided for in the convention. It also provides the necessary cover for affording certain privileges and immunities to persons from a state which is providing assistance. The United Kingdom was one of the first signatories to those conventions, which have been in force for some time. It is important that we should be able to ratify them as soon as possible, and the provisions of clause 5 will enable us to do that.
This is a largely technical but nevertheless important Bill. I have made my opening remarks about it essentially factual, but I will answer any points that hon. Members wish to raise if, with the leave of the House, I speak again at the end of the debate.
I should make two comments about the report of the Energy Select Committee which was published yesterday and which Mr. Speaker has ruled is debatable today. The first concerns the question of BNFL's costs. The Committee's report focuses attention on the eightfold increase in costs at the low level disposal site at Drigg. That has been interpreted by some commentators as a general criticism of cost control at BNFL. Clearly, that is a misinterpretation of the facts put forward by the Committee. The Government believe that a privatised electricity industry, in which nuclear costs in particular will be much more clearly exposed, will motivate BNFL further to improve its cost controls, especially as the switch is made from cost plus to fixed price contracts.
Secondly, I believe that the Committee has been grossly misrepresented on the question of the dumping of foreign nuclear waste from the pre-1976 contracts. All contracts for the reprocessing of spent fuel signed after 1976 are subject to clauses requiring the return of waste to the countries of origin. Reports in the press have talked today of 1,500 tonnes of waste from the pre-1976 contracts requiring storage in this country. That has resulted from a
Column 1106misreading of the Committee's report. In fact, the 1,500 tonnes is spent fuel, 97 per cent. of which is recovered in the form of plutonium and uranium.
About 100 cubic metres, or two bus loads, of high level waste--rather different from 1,500 tonnes--will arise from that reprocessing, which is a small portion of the total waste arising up to the year 2000. All contracts signed since 1976--in particular the vast majority of the £2 billion worth of business signed up with the Japanese, which makes THORP the largest earner of yen in the country--require the repatriation of waste.
Should the House wish me to do so, I will elaborate further on the Government's initial views on the Select Committee report. 6.34 pm
Mr. Kevin Barron (Rother Valley) : I thank the Minister for explaining the provisions of what appears to be an innocuous Bill. As he said, they are designed primarily to raise the borrowing limits of British Nuclear Fuels plc, to tidy up current legislation and to bring us into line with Europe so that we may comply with the convention to which he referred. Opposition Members have no wish to oppose any of those aims. Indeed, from the point of view of the convention and the tidying up of current legislation, we regard the Bill as a step forward.
We applaud the timing of the Bill, for two reasons. First, the measure relates to the privatisation of the electricity supply industry ; secondly, it forces us to reiterate many of the doubts that were raised in the report of the Select Committee on Energy which was published yesterday and which Mr. Speaker has ruled is relevant to this debate.
We are told that the borrowing limits must be increased to finance the completion of THORP, the thermal oxide reprocessing plant at Sellafield in Cumbria. The history of that construction, like that of much of the nuclear power industry, is littered with increases in costs and time scales.
When permission was first granted for the THORP plant in 1978, it was to take nine years to complete, at a cost of £300 million. By 1983, the time scale had been extended to 12 years and the cost to £1.2 billion. By the beginning of this year, the start-up was expected to take place 14 years after permission was first granted, at a cost of £1.1 billion more than the first estimate of £300 million. There has been a truly incredible increase in capital cost and time scale. Some, if not all, of those additional costs have occurred as a result of the nuclear installations inspectorate having examined the original plans and decided-- presumably because of lessons that were learned about the nuclear industry- -that it was necessary to alter the plans substantially.
While all that has been going on, the cost of reprocessing oxide fuels has risen sharply. As a result, there will be an operating loss, certainly on the earliest contracts that were made on a fixed cost basis, a subject to which the Minister referred and to which I will return. May we be told how much the loss is likely to be on those early fixed-price contracts? Who will shoulder the burden of that loss--BNFL, as a result of this measure, or the taxpayer?
BNFL reports that the cost of the construction of THORP will be recouped by about the year 2000, taking into account the early contracts that were signed with the British nuclear industry and some foreign companies.
Column 1107What the future holds, after those contracts have been completed, one cannot say. After all, the reprocessing plant has a potential life of 25 years. The potential for acquiring contracts after those already signed have expired is questionable because, by that time, there will be continental reprocessing plants bidding in competition. It is clear that, at that stage, BNFL will not be seen as the only organisation capable of handling nuclear waste. Clearly, a number of question marks hang over the future of the reprocessing plant. In the home market, the CEGB--which will become National Power if the Government have their way and nuclear generating is handed to the private sector--and the successor company in Scotland to the SSEB suggested, have no contracts for reprocessing. There is also doubt about whether fuel from the AGRs and PWRs to be built at Sizewell and Hinkley should go for reprocessing.
Nobody questions the fact that Magnox waste must be reprocessed because of its dangerous condition and deterioration after its useful life in a reactor. We must therefore take action on it. Whether or not the reprocessing of AGR and PWR fuels will be necessary in the future has been questioned in the Select Committee's report and several times previously by people who are eminent in this subject, who believe that dry storage of such fuels would perhaps be a safer and cleaner way of handling them once they have come to the end of their useful lives in nuclear reactors.
The market to which reprocessing was to sell its plutonium--the fast breeder reactor market--has currently been suspended by the Government. No doubt the hon. Member for Caithness and Sutherland (Mr. Maclennan) will want to mention that later. It was envisaged that THORP might be a place where fuel could be prepared for the fast breeder reactors, and not just in this country--we do not limit ourselves--because we might have found a market elsewhere in the world. Although it was envisaged that THORP might have played a useful role, the report has brought that into question.
The world price of uranium is lower than the cost of reprocessing recycled uranium, and is likely to remain so. The report also highlighted the fact that, in the past decade, there has not been the increase that people thought there might have been in the cost of uranium. Although the availability of that type of fuel can be limited, at the moment it is still plentiful on the market and hence there has been only a reasonable increase in its cost, which is not as excessive as that of some other fuels.
As the Select Committee report states :
"The public perception of the safety record of BNFL and the well-known difficulties here and abroad of accounting accurately for plutonium stocks have not helped the environmental case for reprocessing."
It is interesting that the Minister has said that his Department has scrutinised each and every contract entered into by BNFL. One would think that that is only right because the Government are the only shareholder of the company, but if there has been scrutiny at the level that the Minister suggested we must question why we have not had any proper explanation about increasing the cost of the THORP project.
More importantly, there is also a question mark over the further use of THORP because the first contracts that were signed on what, until the debate started, we were led to believe was a cost-plus basis have ended and, over their time scale, have presumably paid for all the extra expenses
Column 1108involved in the construction of THORP. As we are being asked to grant permission for BNFL to borrow more money, it is only right that we ask the Government to justify their already massive investment and that involved in their future plans, especially in view of what I have said about the likely use of the THORP project.
The experience of THORP does not bode well for the planned large-scale thermal mixed oxide fuel fabrication facility that is currently being contracted and built at THORP. From the Select Committee report, we understand that neither the CEGB nor, presumably, its successor, which will comprise the same people in the same business--National Power--nor the SSEB, nor its successor in the Scottish nuclear power industry, has any plans at this stage to use the mixed oxide fuel, which is also known by the abbreviation of MOX. While BNFL says that there will be a price advantage over conventional fuel, the electricity generating companies say that there will not. The fact is that £50 million may seem a small amount now but that money is currently being expended and, as the report rightly points out, there is some doubt about whether the project will produce fuel for the nuclear electricity market in years to come.
As the report stated, perhaps the Government will assess who is correct before the proposals are advanced. That point is worthy of an answer at a later stage in our proceedings on the Bill, if not tonight. I think that we shall wish to take the Bill into Committee, perhaps for just a short time. Hon. Members who served on the Committee on the Electricity Bill will be pleased to know that. Nevertheless, the report has highlighted many questions that need answering and I hope we shall receive answers to them.
Perhaps there will be an opportunity for the Minister to tell us who is to take over the ownership of the stocks of plutonium and whether the private sector electricity companies will police that. In our earlier debates on the Electricity Bill, I used the phrase, "selling off the family plutonium". Without question this important issue concerns many people.
I am sure that people are well aware of the trade in weapons-grade plutonium throughout the world. If we can believe much of the international debate, many countries that we, as a country, feel are unstable are handling such fuels. We have heard on several occasions that publicly owned or part publicly owned companies have not always been too good at handling weapons-grade plutonium. Indeed, we are led to believe that it has left these and other shores that are supposed to be responsible when handling it and that it has ended up on shores which we may not like to be used as a basic material for nuclear weapons. We are concerned about that, and this debate gives the Minister an opportunity to tell us what the Government envisage will happen in the new framework.
That issue also begs the question of some of the strong rumours that we have heard, that BNFL itself may be a candidate for privatisation in the years ahead. If the present ideology continues, perhaps the only thing that is likely to be saved from privatisation is the air that we breathe-- [Interruption.] Well, perhaps the Government are considering it, because the Minister is nodding his head. As some of the people who currently advise the Government probably are considering it, we shall have to wait and see what happens. If BNFL were to go into the private sector, that would again raise the question of
Column 1109exactly who will look after plutonium in the future. We hope to hear one or two comments from the Minister on that at some stage. As the Select Committee report stated, it seems that the Government have maintained
"the profitability of BNFL, a Government-owned plc, but" reduced
"greatly the profitability of the public corporations which the Government is about to privatise."
The Minister will remember the famous draft letter of January--one of many to which we referred in our proceedings on the Electricity Bill--written by Mr. John Baker, the chief executive-designate of National Power, who had grave concerns about privatised nuclear electricity generation and about who would have to pick up what has become, week by week, a growing and expensive bill. That fact was highlighted in the Select Committee's report. Back in January, in the letter that was drafted but not sent, Mr. Baker warned the Government that the flotation of National Power was at risk and that one of the reasons for that was the prices charged by BNFL for the nuclear fuel cycle.
Mr. Baker stated :
"we do not see how National Power with an arms length contract with BNFL is in any position to put additional incentives on BNFL if HMG as its shareholder cannot."
It appears that Mr. Baker won the argument at the time. At least, we can assume that, because we have not had a statement from the Government. However, on 23 March, The Guardian stated : "The Government signalled its willingness to provide a nuclear indemnity after ministers were told that financial institutions would not invest in a venture with as many financial uncertainties as nuclear power."
Therefore, if, according to Mr. Baker, the newly privatised National Power is only to meet the costs of nuclear power which, as The Guardian put it, are "within management control", what will be the status of its contracts with BNFL?
At the moment, contracts are made on a "cost unknown" basis at the time of signing. Have those contracts been renegotiated as the CEGB and the SSEB have wanted for a considerable number of years? If so, what effect will that have on the reprocessing plant at Sellafield? If those contracts have been renegotiated, how much will the Government give BNFL to buy out the existing contracts? That is very important, because someone will have to pay if the cost-plus contracts are being bought out.
People interested in the nuclear industry, and British taxpayers, will want to know how the change in cost-plus contracts will take place. If they have been renegotiated, are the Government content to see the contracts continue under their present terms? I understand that the overseas contracts have also been made on a cost-plus basis. Will there be a change in the British element in THORP, but no change in the foreign element? The Bill gives us an opportunity to debate those matters and seek answers to those questions.
If we give the Bill a Second Reading, we should also scrutinise the process which has been established for the costs of decommissioning. BNFL's customers' liability for BNFL decommissioning costs has risen more than fivefold despite a 58 per cent. reduction in the present value of the total liability by the use of a 2 per cent. a year discount.
Column 1110However, that is based on present prices. By the time decommissioning takes place, depending on when the very expensive third phase is finished, the costs are bound to have risen considerably. The history of the nuclear industry suggests that that will happen and that back-end costs are likely to rise in the same way as front- end costs have risen.
We can only assume that BNFL is postponing decommissioning to avoid the costs today. By putting off for 100 years the non-productive high cost end of the nuclear fuel cycle, BNFL reduces the cost for its customers today.
I hope that the hon. Member for Havant (Sir I. Lloyd), who was the Chairman of the Select Committee on Energy which sought oral evidence from BNFL in November last year, will be able to clarify a point for me. I believe that it was the hon. Member for Littleborough and Saddleworth (Mr. Dickens) who asked Mr. Neville Chamberlain a question, part of which was :
"Since the nuclear industry has always claimed that decommissioning presents no technical or safety problems, could you perhaps take this opportunity of reassuring the Committee that this delay is not designed to boost short-term profits?"
Mr. Chamberlain replied :
"We can certainly give the assurance that it is designed to boost short- term profits."
There may be a printing error in that memorandum to the Select Committee. For the year under consideraton, there would have been a difference in terms of annual profits involving £14 million. If BNFL believes that spreading decommissioning over a long period helps its annual costs, we can assume that the CEGB and the SSEB--and presumably National Power--are thinking along the same lines. Their policy will be much the same.
My next points relate to the Electricity Bill, which has just completed its Report stage in this House. The Select Committee on Energy and many other people have suggested that the time scale for decommissioning may be brought forward, while Mr. Chamberlain has said that the time scale is an important accountancy factor. Bearing those two points in mind, schedule 12 to the Electricity Bill might be triggered.
In Standing Committee, when we debated clause 88, we asked how the money in schedule 12, which is not Government money, as the Prime Minister often tells us, but taxpayers' money, involving billions of pounds, could be triggered for use in the nuclear industry if the regulatory body or the Government decided to change the time scale. Mr. John Baker's draft letter revealed his deep unhappiness at having to buy the nuclear part of electricity generation along with a substantial tranche of fossil fuel plants. If Mr. Baker is now satisfied that he will not incur any additional costs, has his satisfaction been gained through the possible use of the triggering of schedule 12 of the Electricity Bill? Has that trigger made Mr. Baker happy about taking on board the nuclear industry, because he was deeply unhappy about it last January? Post-privatisation--in a few years' time--will there be a change in the time scale for decommissioning? Will that trigger schedule 12 and bring taxpayers' money into this very expensive nuclear industry to satisfy the people who will take it over?
We welcome certain aspects of the Bill. We welcome the involvement of the Health and Safety Executive with the nuclear installations inspectorate and the United
Column 1111Kingdom Atomic Energy Authority. Hopefully, that will improve people's perception of nuclear safety. Obviously, spreading the financial responsibilities is welcome.
We welcome clauses 3 and 4, which relate to insurance cover. We assume that the proposals are the right way to proceed, although we hope that the provisions are never put to the test. However, we never know with this industry. There are large questions marks hanging over the nuclear industry, although thankfully not because of anything which has happened on a large scale in this country. But there are questions about liability should a major incident arise on the scale of Three Mile Island or Chernobyl.
Clause 5 provides that the mutual assistance convention should be ratified. While the Opposition are pleased about that, we hope that it is not undermined in a way that was described in The Independent today. A civil servant was giving evidence to the Select Committee on Defence yesterday about the scuttling of nuclear submarines. I think that "scuttling" is the correct term, and I should know because my father served in the Navy for a considerable time during the war. I had understood that the London dumping convention to protect the environment would cover such scuttling and the Government claimed that the signing of that convention was a victory and a major step towards cleaning the world's environment.
However, Mr. Nigel Paren, a senior MOD official, is quoted in The Independent as saying :
"The Royal Navy's decommissioned nuclear submarines could be dumped at sea, despite the international convention against sea-disposal of vessels and harmful waste."
If that is the case, I hope that, as soon as the convention in clause 5 is ratified, the Minister will tell all his civil servants exactly what that means. I hope that the convention will never need to be used, but these plans need to be made in case there are more incidents of the type that we saw in America and the USSR. I hope that the Government have a strong commitment to the convention. I shall be interested to see how our nuclear submarines are removed. I understand that one of them is in dry dock.
I hope that the Minister will attempt to answer my questions either during the debate or later in Committee, because these issues are important for the industry and the British taxpayer. Our electricity generating industry and BNFL have been in public hands and perhaps that means that things are not as transparent as they will be in future.
No matter what happens in future, we are talking about considerable nuclear costs. All the rights given by the Government to BNFL to borrow more money should be accompanied by instructions to use the money in a proper way. Whether or not we build new generators, Britain's nuclear industry will be with us for decades. We must make sure that it is soundly based and that investment in it is for good reasons. We must not invest in forms of technology that do not have a useful life. It is not our intention to move against the Bill, but perhaps we shall discuss it at greater length in Committee. We support much of the Bill, but some of it begs many questions. 7.1 pm
Sir Ian Lloyd (Havant) : Once again, when one surveys the vast expanse of naked green on both sides of the House, one realises that when the House is tempted to discuss technical matters it is rather inclined to rear like a temperamental horse overtaken by an unsilenced motor
Column 1112car in a country lane. Perhaps that is not surprising in view of the many technical terms and facts in the Bill and the issues surrounding it. I shall come to that.
I know that the hon. Member for Rother Valley (Mr. Barron) prides himself on two apprenticeships that he served in the energy industry. The one in which he probably takes the most pride was his experience as a coal miner. The second, in which I hope he takes some pride, was his service for a time on the Select Committee on Energy on which we were very glad to have him. I was, therefore, pleased to hear him say at the end of his speech that he accepted the undoubted fact that the nuclear industry will be with us, and probably worldwide, for a long time. If some of the preliminary evidence that we have seen on the greenhouse effect, not only in this country but in virtually all the major industrial countries that are examining this issue, proves to be what is suggested, it looks as if there could be a dramatic and major expansion of the nuclear industry.
I am grateful to my hon. Friend the Under-Secretary of State for Energy for raising the two points on which he thought my Committee had been misrepresented. I accept without hesitation or qualification that we were rather misrepresented on the question of the so-called dumping of nuclear waste. That is a highly emotive phrase, and unfortunately when it appears in any Government document or Select Committee report it tends to be the first thing that the press seizes on because I think that it shares the rather limited public perception of what exactly is meant by the results of the reprocessing of all kinds of nuclear materials.
I cannot go all the way with my hon. Friend the Minister on costs. He suggested that my Committee made an innocent--I think that was the word he used--misinterpretation of the situation at Drigg. That may or may not be so, but later I intend to deal with cost increases that my Committee and I regarded as serious matters. In a sense, the discussion on the Bill, which will increase the borrowing limits of BNFL by £500 million, is purely financial and technical. However, it raises much larger problems and graver issues.
The task of the Select Committee on Energy is to examine annually the major energy industries in the public sector. Our report was both relevant and timely, although I concede and fully understand the dismay that it may have caused to British Nuclear Fuels Ltd. I have the greatest respect for BNFL both as a company and an organisation and for what it is trying to do in and for Britain. I have also the greatest respect for its management. However, if I cannot escape the obligation of scrutiny, BNFL cannot escape its consequences. To some extent, both the Committee and BNFL were the victims of tendentious selection in the way that our results were presented. For example, as my hon. Friend the Minister has said, it has apparently been widely reported in the press that the Committee recommended the renegotiation of contracts. We did not do that at all. What we said was carefully considered. We said that we would strongly favour a recommendation that BNFL should renegotiate those contracts "were that practical." That phrase was quite deliberately inserted. We see no prospect of BNFL customers wishing to receive waste when they have entered contracts under which BNFL has undertaken to look at that matter. That is the first and quite serious misrepresentation.