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8.25 pm
Mr. Matthew Taylor (Truro): I shall keep my remarks fairly short. I have spoken about this matter twice before in the House and I do not intend to restate the issues. Even at this late stage in the Government's plans, I stress that the privatisation is wrong and will prove hugely costly to the British taxpayer. It also carries some risks that I do not believe the people of this country will accept. Therefore, I urge the Government to think again.
The privatisation and the sweeteners that have been offered to the private sector have incurred criticism from the Select Committee on Trade and Industry. The European Commission has launched an investigation into illegal state aid and we have watched the barely concealed warring between British Energy and the Government over the scale of the liabilities that should follow assets into the private sector.
In spite of the Minister's remarks, it now appears that the war has been well and truly won by private sector interests. We have yet to count the costs that the public will pay through job losses and a tax bill that is likely to run into billions of pounds. There have been repeated ministerial pledges that the taxpayer will not lose out, but the recently published prospectus does not back them up. Amid confusion about the detailed figures, one thing is striking: the taxpayer will be significantly worse off after privatisation.
As the motion points out, proceeds from the sale of the nuclear power stations that are up for grabs are likely to be less than the cost of building Sizewell B alone. In a previous debate on the subject, I described the nuclear industry as a white elephant. Although I was taken to task on that occasion by the hon. Member for Ayr (Mr. Gallie), I stand by my words. How can something that is eventually sold for less than it took to build, and which will be a cost to the taxpayer well into the next millennium, be described as anything but a white elephant?
The money that must be paid out will go towards decommissioning the white elephant. Pledges that the private sector would shoulder the cost of cleaning up the
power stations after privatisation have been quietly and comprehensively ditched. Long-term bills for the seven advanced gas-cooled reactors and the Sizewell B pressurised water reactor--amounting to an estimated £6.9 billion--will fall on the taxpayer. Even taking into account the likely proceeds from the sale, that leaves the public sector at least £1.2 billion poorer after privatisation. Why must the taxpayer cover that huge cost? The answer is simple: the privatisation would be impossible if the private sector took on all liabilities as well as the so-called assets of the nuclear industry.
Sir Michael Grylls (North-West Surrey):
The hon. Gentleman is talking about the costs of an industry or a product. If he were selling his car, its cost would be quite irrelevant. The price that he gets for it is the price in the market. The price at which people who have applied for shares in this privatisation is the price that they are prepared to pay. He must understand that the price has nothing whatever to do with the cost of the industry.
Mr. Taylor:
When we sell a car, that should be the last we see of it. The peculiarity of the nuclear industry is that, once the individual who has bought the car has finished with it, the car is returned and we face an even larger cost for scrapping it safely.
We now know that British Energy is to be exempted from at least some of the costs of reprocessing spent fuel--worth £17 billion. We now know that British Energy is paying only £16 million a year into the fund to pay for the cost of the clean-up operation--which is estimated to be a £3.6 billion saving in comparison with a more realistic and appropriate amount. We now know that the long-term fund assumes investment rates that are likely to leave the taxpayer with a lump sum bill of at least £1.6 billion. Whichever way privatisation is viewed, it is difficult to escape the reality that, yet again, the taxpayer is expected by the Government to subsidise shareholders' profits.
As I have said in the House before, the British public have already paid towards decommissioning through the fossil fuel levy on electricity bills, which has raised£1.8 billion. That public money was diverted to building Sizewell B. Given that the taxpayer is being asked to fork out again for decommissioning, will the Government return that money to the British public? Clearly, the answer is no.
Let us not forget that the privatised power stations are not the only nuclear power stations that will, at some point, need to be decommissioned. What of the Magnox stations--the dirtiest nuclear power stations in the world? They are too much of a liability for even the Government to attempt to privatise them. Who is to pay for that decommissioning? The answer, once again, is the taxpayer. Any profits from the advanced gas-cooled reactors should be going into a decommissioning fund that will cover the eventual cost of all the power stations, but instead it will go into the pockets of British Energy shareholders.
I simply do not believe that there is any way in which private sector efficiencies can cover the liabilities, or the loss of the income stream that the Government would have had for meeting those liabilities--an income stream that we know was inadequate because the Government accept that it is unlikely that the privatised industry will
be building any further nuclear power stations. In other words, it is not worth their while. Profits will simply not cover the real costs of the industry.
At the very least, do the Government agree that proceeds from the privatisation should be specifically designated to help meet Magnox public sector liabilities? The proceeds would probably not cover the cost of decommissioning the Magnox stations, but they would certainly go some way towards doing so. The proceeds should be placed in a segregated fund, and perhaps, the Government could add to them the £228 million gifted by the taxpayer to British Energy in the form of an endowment--a gift that remains totally without justification.
As we have already heard in this debate, this privatisation raises serious questions about safety in the nuclear industry. I do not agree with the hon. Member for Beckenham (Mr. Merchant) that safety issues should be underrated, although I am glad that he accepts that the nuclear industry carries safety risks. Not all Conservative Members would even accept that. I credit him with being honest. After that, we can disagree or not about whether those risks are worth bearing.
When I spoke in a previous debate on the nuclear industry, I was accused by a Labour Member of scaremongering about safety. I do not think that it is scaremongering to remind the Government of the submission made to the Select Committee on Trade and Industry by Captain Killick, the former director of safety and quality at Scottish Nuclear. He sought to remind the Government that a privatised nuclear industry is likely to
Leaked internal documents from the Clifford Chance law firm show that the Government have been warned that cuts in manpower are compromising safety. Do the Government accept that advice, or do they dismiss it, too, as scaremongering? We have learnt that vital safety information was omitted from the privatisation prospectus. We have learnt that nuclear inspectors are increasingly concerned about the loss of skills in the industry and the ability to cope with an emergency. Do the Government consider them to be scaremongering too? As more and more details about privatisation are brought into the public domain, this privatisation makes less and less sense.
Standing in the Chamber today, it is difficult not to feel a sense of deja vu. We are debating for the third time what everyone knows, but which the Government in their quest for privatisation and short-term Government revenue at any cost still refuse to admit: the proposed sale of the nuclear industry is an expensive error of judgment that will cost the taxpayer dear. The Government's approach to the privatisation can be described only as deceitful and inept. We have received assurance after assurance from Ministers that liabilities will follow assets into the private sector. Those assurances have been steadily watered down over recent months, as the extent to which Parliament has been misled has been slowly uncovered.
The Liberal Democrats have not opposed every privatisation that the Government have proposed. We have sought to address them one by one.
Mr. Eggar:
I think that I heard the hon. Gentleman say that Parliament had been misled. I am sure that he did not mean to say that; perhaps he could withdraw that comment.
Mr. Taylor:
I think that what the Government have said is misleading. For example, in the previous debate on this subject, I said that the Government had gifted£265 million of taxpayers' money to the privatised nuclear industry. Ministers and others argued that it was not taxpayers' money, but the truth is that that money would otherwise rest with the taxpayer. On a number of other issues, the way in which this privatisation has been addressed is misleading. I do not think that that is unparliamentary or inaccurate.
"seek to make small erosions into safety margins for commercial gain."
I do not think that that personally criticises individuals. It is simply in the nature of the profit-centred job that they will be carrying out. The hon. Member for Beckenham was over-optimistic on that front. If a former director of safety and quality in the nuclear industry is concerned at the safety implications of privatisation, surely it is not scaremongering to take those concerns seriously.
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