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Mr. Clapham: I want to return to that point.
Lady Olga Maitland: Nevertheless, I am going to continue.
The nuclear industry has been a source of enormous pride to the country. I am delighted by the idea that, at long last, we are going to privatise it, which is marvellous news for customers, for taxpayers and, ultimately, for the nuclear industry.
I first became interested in the industry in the 1960s, a long time ago, when my father was known as Patrick Maitland and was the prospective Member of Parliament for Caithness and Sutherland. I remember going around Dounreay, which was up and running and a thriving show for the future: there was no doubt about it. Ultimately, we will run out of fossil fuels and everyone, everywhere will have to rely on the nuclear industry. I had an opportunity to learn at first hand how it would become part of our everyday lives and how not only we but our children would depend on it. Dounreay meant a great deal for the whole country and brought a tremendous amount of vibrancy to the local economy in terms of jobs and infrastructure.
Moving on from those early days, it is exciting to think what privatisation will do for the industry and the country. Nuclear energy will undoubtedly gain much greater commercial freedom. It is appropriate for the Government to hand over all management decisions to the professionals, who know the business and should control
investment--so that they no longer have to be influenced by public spending levels or other considerations. The industry should have the freedom to compete for and win business in overseas markets, like any other venture.
The right to manage the industry professionally matters, but so do the industry's customers. We will all benefit from lower electricity bills. Surely there cannot be anything wrong with that prospect. It is absolutely right to support greater competition in the electricity generation market, which will come from greater efficiency, responding to consumer need and lower prices. A typical household electricity bill is set to fall by £20 as a result of nuclear privatisation and will tumble further as time passes. The taxpayer will also benefit. The proceeds of privatisation will go into the public purse, which must be good news, and the company's liabilities will be transferred from the public to the private sector--which will then take responsibility and run the risks.
I acknowledge that safety is paramount, but I intensely dislike Labour's exploitation of that aspect for political purposes, to frighten people when there are no grounds for doing so. Scaremongering about the nuclear industry has been going on a long time and is unacceptable. In the 1980s, the Campaign for Nuclear Disarmament concerned itself with defence issues; but as soon as it started losing that argument, CND turned its attention to the nuclear industry for political purposes and tried to terrorise the public into feeling uncertain and uncomfortable. If such propagandists think that they are winning, they are wrong. The Government have consistently put a high price on safety. There is no reason, just because the industry is to be privatised, for anyone to believe that safety will be jeopardised.
The existing regulatory mechanisms will remain in place. The nuclear installations inspectorate will continue to enforce safety. Other bodies that have offered an opinion are in no doubt that safety will be properly regulated and rigorously applied. The Select Committee on Trade and Industry, after extensive investigation, concluded that the privatisation of British Energy need not result in any reduction in safety.
The World Association of Nuclear Operators said that it is
In the light of all that evidence and that strong support, I am sorry that the right hon. Member for Derby, South (Mrs. Beckett) should, on a quite unfounded basis, turn up the fear factor.
Lady Olga Maitland:
The right hon. Lady issued a press release on 17 November last year, which stated:
Mr. Ken Purchase (Wolverhampton, North-East):
It comes ill from the hon. Member for Sutton and Cheam (Lady Olga Maitland) and from Conservative Members generally to complain that Opposition Members have in some way for political purposes raised the spectre of a nuclear incident. It comes very ill from them because the purpose of this privatisation is completely political--to get a few more quid in the jam jar so that the Government can give it away in tax cuts to sweeten the electorate before the next general election. If anyone is playing politics with the nuclear industry, the blame rests fairly and squarely on Conservative Members. There should be no doubt about that in people's minds.
It is interesting that at least two Conservative Members who have spoken in this debate--especially the hon. Member for Beckenham (Mr. Merchant)--made the point that, in general, safety records of former Government-owned utilities have improved since privatisation. A report which came out only a few days ago stated that safety records had improved.
In the years between privatisation and now, would it not be amazing if gains had not been made in industry and plant safety and operation? It would have been even more amazing if, in 1945, we had nationalised the coal industry, for example, on the basis that we wanted to improve safety. It would have been even more amazing had real gains in safety not been made.
As technology moves on, men and women work more safely, and processes, efficiency and effectiveness are improved. Those are normal developments in a dynamic technology, and they have occurred in this and in many other industries. It would therefore be quite extraordinary if the claim that safety records have improved could not be substantiated.
The point is that the nuclear industry's safety record should be second to none--a point that Opposition Members have repeatedly proclaimed. The point is that privatisation--or commercialisation--brings to bear unnecessary pressure on workers to cut corners, to increase productivity to meet specific financial targets. That is particularly relevant to safety in the nuclear industry, because, so far as possible, nuclear reactors must continue working without interruption if they are to operate most economically.
Very often--three times recently--we have heard about incidents in which a reactor should have been closed down but was closed down too late or not at all. Fines have been levied for those incidents. We are introducing an unnecessary commercial imperative into the industry. The British nuclear industry has one of the best safety records. It is continuing to make considerable productivity gains and, for as long as the installations remain in commission, it will continue to produce electricity at a lower and lower cost.
Sir Michael Grylls:
I am following the hon. Gentleman's argument carefully. He said that the
Mr. Purchase:
The hon. Gentleman need not exercise his memory any longer. Right now, the level of injuries in the coal industry is rising.
Mr. Purchase:
It is true. The level is much higher than it was under the National Coal Board.
The issue of ownership is now in the political frame for both sides of the House and there is merit in arguing that it is outcome, not process, that is important. The nuclear industry is special, because the inherent dangers of an accident are tumultuous compared to those from any other form of energy generation. Because of that, it is important that it should remain the responsibility of the Government of the day. The Government should not be attempting to get out from under that responsibility.
I mentioned earlier that the incident at Three Mile Island did not involve just a matter of ownership. That nuclear incident almost led to a catastrophe, and to this day, settlements have not been made in the civil courts for those who claim to have suffered injury.
Anyone considering investing in the British nuclear industry, particularly those intending to hold the shares for any length of time--that is another matter--should recognise that the insurable costs that he or she is likely to have to meet will grow year on year as the underwriters and the industry begin to understand that the risks cannot be properly quantified. The message that should go out is that insurance premiums will rise and there is likely to be an increasing liability on the industry in private hands to meet the unquantifiable risks attached to it.
The Secretary of State mentioned the £100 million dividend that will be provided early in the life of this privatisation. He said that it will come about because the industry has a healthy cash flow. It is true that the industry is generating cash, but the Secretary of State will surely recognise that, although the cash flow might appear to be large, it may not necessarily be positive when measured against the company's liabilities either on or off the balance sheet. Cash flow is simply a measure of ability to pay current bills, not past or future bills. In truth, the present liabilities, on a discounted basis or otherwise, are very large. That is why the Government have to make special arrangements to discount at an inappropriate rate.
It is estimated that, by some miracle--Treasury magic--£7 billion has been knocked off the cost of disposing of the liabilities. That has been done very simply. It is not a miracle and is not even a sleight of hand. It is no more than a cheap trick. The Government have changed the discount rate from 2 to 3 per cent. so that the liability is down from £21 billion to £14 billion. One can play that game for ever.
"aware of no evidence to suggest that the ownership (i. e. public or private) has any bearing on the level of safety and reliability achieved".
As my hon. Friend the Member for Beckenham(Mr. Merchant) pointed out in his speech, the Health and Safety Executive has made clear its support; it has no doubts about the matter.
"people have all along feared that safety would take second place to the Conservatives' need to raise money for tax cuts".
If that is not blatant scaremongering for political purposes--without any foundation whatsoever--I do not know what is. That quotation tells me and everyone else one thing: Labour is certainly not fit to govern.
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