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Column 768Skeet, Sir Trevor
Smith, Sir Dudley (Warwick)
Smith, Tim (Beaconsfield)
Spicer, Sir Jim (Dorset W)
Spicer, Michael (S Worcs)
Stanley, Rt Hon Sir John
Stewart, Allan (Eastwood)
Stewart, Andy (Sherwood)
Stokes, Sir John
Tapsell, Sir Peter
Taylor, Ian (Esher)
Taylor, John M (Solihull)
Taylor, Teddy (S'end E)
Thompson, Patrick (Norwich N)
Townend, John (Bridlington)
Townsend, Cyril D. (B'heath)
Twinn, Dr Ian
Waddington, Rt Hon David
Wakeham, Rt Hon John
Waldegrave, Hon William
Walker, Bill (T'side North)
Walters, Sir Dennis
Wardle, Charles (Bexhill)
Young, Sir George (Acton)
Tellers for the Noes :
Mr. David Heathcoat-Amory and Mr. David Maclean.
Question accordingly negatived.
Mr. Tony Benn (Chesterfield) : May I go back to the point that I raised with you about hybridity, Mr. Speaker? I appreciate that what the Secretary of State said to the House--I do not know if he is still the Secretary of State--has no legislative authority and, having consulted the Table, I understand that only when the wording of the Bill was changed would the question of hybridity arise. I have had the opportunity of having a quick look at the Bill. I do not believe that you, Mr. Speaker, could possibly answer now the question that I am putting because there may be enough in what I am proposing to submit to persuade you that you should seek advice before you give a ruling against what I am saying.
Clause 62 states :
"all property, rights and liabilities to which each Area Board is entitled or subject immediately before that date shall become by virtue of this subsection property, rights and liabilities of a company which, in relation to that Board, is nominated for the purposes of this subsection by the Secretary of State."
However, the Secretary of State has said that that will not be the case any more. In effect, he has said that certain financial liabilities in respect of the Magnox stations will remain in the public domain.
Clearly, those are only words from a Secretary of State and have no legislative authority. However, had they been part of the long title of the Bill--the right hon. Gentleman has told us that the Bill will be interpreted in that way--you, Mr. Speaker, would have been bound to consider whether we were getting a mixed arrrangement for the supply of electricity which would affect private and public companies and consumers separately.
In view of the sensitivity of matters relating to hybridity, which affect the House and the protection of private rights and so on, I believe that you should not reject my submission out of hand until you have had the opportunity of considering it. Therefore, I submit that
Column 769you, Mr. Speaker, in your judgment, should not allow the Lords amendments to be proceeded with until you have had the chance of taking that advice.
Mr. Speaker : I will certainly consider carefully what the right hon. Gentleman has said, for, as he correctly stated, no legislative change is made to the Bill as a result of what the Secretary of State has said. I suggest that the right hon. Gentleman submits his reasons for what he has just said to me in writing so that I may consider them carefully.
Now we move on to Lords amendment No. 158 with which--
Mr. Bob Cryer (Bradford, South) rose --
Mr. Cryer : I simply want to ask you, Mr. Speaker, at what stage does the House have the opportunity to refer such a Bill, if it is indeed hybrid, to the Examiners of the Bill, who, as you know, consist of officials from both Houses, to check on the question of hybridity? Is it following a statement by yourself when you make a decision, Mr. Speaker, that a formal motion is moved, and is that motion subject to a vote like the vote that we have just had, in which the Government can use their vast majority to tear the procedures of this place apart and thus remove the rights which protect ordinary citizens, as they have just done?
Mr. Bruce Grocott (The Wrekin) rose --
Mr. Grocott : I am sure that you will recall, Mr. Speaker, as we all do, the tremendous seriousness that was attached to the issue of hybridity during the 1970s on crucial matters of legislation which, as far as I can recall, included a whole day's debate on whether a piece of legislation was a hybrid measure. We are all dealing with information that has come to light only recently and the information that I have received seems of similar import to the discussions that took place in the 1970s. Therefore, can we have your assurance that, when the ruling is made, the opportunity will arise, so far as it is in your power, Mr. Speaker, to determine it, for us to discuss it in the same way and with the same seriousness with which it was discussed in the 1970s?
Mr. Speaker : I must first consider the submission that is put to me. Of course I do not control the timing of debates in the House, but I shall certainly bear in mind very strongly what the hon. Member has said.
Mr. Benn : The point is that the passage of the Lords amendments today could lead to an attempt to get Royal Assent for the Bill immediately. Clearly, when the House has dealt with the Lords amendments, the Bill will have completed its passage through both Houses. [Interruption.] I do not know whether it depends on how the House rules on the matter. However, the point is that the matter of hybridity would have to be settled before the Bill was cleared for Royal Assent. Once the Bill has gone for Royal Assent, it becomes an Act of Parliament. There
Column 770is, therefore, an urgency about the matter. When you come to it, Mr. Speaker, you would have to interpose your judgment between the final stages in either House and the Royal Assent. You have given me an opportunity to put in such evidence as I can, which will concern clauses 62 and 63 on the generating board.
Mr. Tony Blair (Sedgefield) : Further to that point of order, Mr. Speaker. Will you confirm that it will be necessary to have a ruling on the question of hybridity before the Lords amendments are passed, since otherwise the opportunity is lost? The matter is therefore urgent.
Lords amendment : No. 158, in page 117, line 21, after "incurred" insert "or to be incurred".
"(1A) Subject to paragraph 4 below, the Secretary of State may, with the approval of the Treasury, enter into an agreement with any person under which the Secretary of State undertakes that, if such conditions as may be specified in the agreement are satisfied, he will exercise the power conferred by this paragraph in such manner and to such extent as may be specified in the agreement."
Amendment (a), after first agreement,' insert
to be no longer than 5 years in duration.'
Lords amendments Nos. 160 to 162.
Mr. Spicer : The amendments will fulfil the commitment given by my noble Friend in another place to put the provisions of schedule 12 on a firmer footing. It is important that the nuclear generators should have the certainty of knowing that the Government will stand by their assurances to provide funds, and the amendment simply provides for the Secretary of State to enter into contracts to meet those obligations.
The Opposition amendment (a) to Lords amendment No. 159 seeks to restrict the length of the contract to five years. That would make the policy unworkable. The contracts need to last long enough for the Government to make the payments when they fall due. The stage 3 decommissioning of power stations may not take place for 100 years after the station has closed, and vitrified high-level waste will not be finally disposed of until at least 50 years after vitrification. It is essential, therefore, for the contracts to be capable of lasting for a long time. While accepting the Lords amendments, I would ask the House to reject the Opposition amendment.
Mr. Blair : The Lords amendment alters substantially the position as it was in the Committee and Report stages of the Bill here. The Secretary of State said in his statement today that if there had been any benefit of privatisation, it was to have exposed the economics of nuclear power. It is worth pointing out that it was only two and a half years ago that Mr. Hadley, the secretary of the Central
Column 771Electricity Generating Board, appeared before the Sizewell inquiry and proclaimed that the Magnox reactors, about which we have heard a lot this afternoon, were saving the consumer some £250 million a year. Throughout the history of nuclear power until privatisation, we were told consistently that it would be cheap. Indeed, that was the primary case submitted by the CEGB in support of Sizewell. What has happened since then is not that by some magical process of privatisation or a great evolution of market power it has become clear that nuclear power has become more expensive, but, in crude terms, that, where it used to be in the interests of the electricity board to tell us that nuclear power was cheap, it is now, short-term at least, in its interests to tell us that it is expensive so that it can get more guarantees and more subsidies from the Government. When we debate the schedule and the Government amendment, we should remember that we are not merely debating those nuclear liabilities, but we are debating them against the background of the nuclear tax to pay for the new PWR stations that will be costing the consumer about £20 or £50 a year. The nuclear quota will remain in being and will ring-fence the nuclear industry in that special way, but the cost of decommissioning, which will form part of the nuclear liabilities cost, will arise not merely in respect of the Magnox stations that have been shuffled back into the public sector today, but in respect of the PWR stations that are about to be decommissioned in the United States. The estimates of cost for commissioning the advanced gas reactor stations are again escalating at a fairly rapid rate. During our deliberations we heard much from the Secretary of State about how he wants to rid us of the iniquities of the cost-plus system, but under privatisation, and under the provisions relating to nuclear liabilities, we will have cost plus and then the profit on top of that necessary for the private sector to take a dividend for its shareholders.
The amendments have a peculiar and coloured history. My hon. Friends will remember that in Committee those nuclear liabilities for the end-of-cycle costs of decommissioning, reprocessing and disposing of nuclear waste started off as simply those costs that were entirely unforeseeable. The only example that we received during the entire Committee stage was that a future Government might bring forward stage 3 of the decommissioning process and that would add to the cost. That would indeed add to the cost. Indeed, recent estimates show that it would add about £200 million to the cost of decommissioning the power stations. I add, too, that it appears that the fact that a future Government may change our procedures to bring them into line more with those procedures operating as best practice abroad is entirely foreseeable. Why we should guarantee and insure a private sector company against that risk, I do not know. That is the only example that the Minister gave us during Committee of where the schedule would be activated.
We were then told in the other place, when the matter was debated, that that was to be extended not merely to items that were unforeseeable, but to what were called, in the words of Baroness Hooper, factors "outside the industry's control". That is an utterly vague statement on which we should have clarification today. What has happened, too, between our debate in Committee and the Bill's returning to the Floor of the House for Lords amendments is that the discretion of a Secretary of State
Column 772to exercise power and to give nuclear liabilities the underwriting in the way I have described has gone and has been replaced by these words in the amendment :
"the Secretary of State may, with the approval of the Treasury, enter into an agreement with any person under which the Secretary of State undertakes that, if such conditions as may be specified in the agreement are satisfied, he will exercise the power conferred by this paragraph in such manner and to such extent as may be specified in the agreement."
In other words, a discretion has been replaced by a binding agreement into which the Government now want to enter to shore up the nuclear side of the privatisation.
The importance of that is that the discretion would be exercisable at the time when the contingencies against which it is guarding arise. Therefore, the discretion might be exercised when a future Government change the decommissioning plan or when the factors "outside the industry's control" materialise. I hope that the Minister will deal with that point.
Presumably the arrangement in the Lords amendment now contemplated by the Minister will be agreed to before privatisation. The purpose of the amendment, therefore, is to give binding rather than discretionary guarantees to the industry before privatisation. Surely it becomes all the more important that we should assess the contingencies that may give rise to that binding agreement and what its terms would be.
A binding agreement will be entered into as a result of the amendment and Parliament will give the power to make that agreement. The extraordinary thing is that we do not know the terms of the agreement, its duration, the contingencies against which it may arise or the consequences of the agreement for public sector funding. Nothing is known about this open-ended agreement to subsidise a private sector company from public funds. It is therefore outrageous for the Government to enter into such an agreement on our behalf in order to shore up a privatisation which, as we heard earlier today, is failing so badly.
Why have the Government not taken all the nuclear power stations rather than just the Magnox power stations out of the privatisation? The explanation is perfectly simple and it is an important one to remember when considering the amendment. The Government have not taken the Magnox stations out because they have a greater appreciation of the future success of the other stations compared with those Magnox stations--some might argue that the advanced gas-cooled reactor stations are in a worse shape than the Magnox stations. The Government have withdrawn the Magnox stations because they know that if they took all nuclear power out of the privatisation, as we urged them to do, they would have to withdraw the Bill.
In Committee and throughout the passage of the Bill we were told that the 70 : 30 per cent. split between National Power and PowerGen was necessary to ensure the marketability of the nuclear sector within the industry's structure. If the Government withdrew nuclear power from that structure, they would then have to withdraw all the structure.
It is important to remember that, under the agreement, the price that we shall pay has been upped from £1 billion to £2.5 billion. That is the sum for which we, as taxpayers,