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Dr. Cunningham: Is not this a rather curious argument for the hon. Gentleman to advance? He is saying that BNFL should use its skills, expertise and know-how to get into the huge global market, but a few moments ago he agreed that it was not fit to operate at Aldermaston. Both arguments cannot be right.
Mr. Stunell: Both arguments can be right. My hon. Friend the Member for Newbury (Mr. Rendel) said that the existing company, with its current skills, is an unusual example of a contractor that one would appoint to run the services at a military installation. The issue of decommissioning relates not primarily to military
complexes but to civilian complexes around the world. The right hon. Member for Copeland referred to the former Soviet Union, where leaking reactors in civil nuclear power and associated facilities is a serious issue.I hope, as the right hon. Gentleman does, that the company will restore its reputation and sell its expertise. The only difference between us is that he thinks that it should restore its reputation and sell its expertise on the next generation of nuclear power around the world, whereas I think that it should restore its reputation and use its expertise on the more significant job of decommissioning, which is, in economic terms, the more realistic option. I do not believe that there is a market for long-term significant expansion in civil nuclear power worldwide, let alone in this country.
For all those reasons, I believe that the prospect of a PPP is--quite correctly--being pushed further and further away by events. Paragraph 19 of the Select Committee's report states:
- From the published summary of KPMG's work--
- it is by no means self-evident that the injection of private sector capital through a PPP is the best way of injecting private sector disciplines,
My main point about the merit of the PPP--or, in this case, its lack of merit--is that the merit ascribed to it in the report is that it would introduce private sector disciplines. It is hard, however, especially this month, to believe that those disciplines are the same as a better safety culture. Without taking too many cheap shots, one only has to say the word Railtrack, which did not go ahead with the train protection system, did not get its maintenance techniques right and cut back on its investments, to prove that.
Private sector disciplines are more associated with reducing manpower costs, which usually means fewer staff, cheaper staff and not investing in trained staff. It usually means reduced overheads, outsourcing and the use of cheap contractors. It has already been mentioned that there was an over-reliance on precisely those practices. Private sector disciplines usually mean a search for short- term returns and profits. In addition, the House might be concerned to learn that private sector disciplines mean that secrecy would be brought into play even more often because the information would be commercially sensitive.
For those reasons I have doubts about whether private sector disciplines are really what we need, never mind what we would get from such a partnership. There is a further consideration: diversification will need direction and investment that is probably not available from the private sector.
I conclude by asking the Minister some questions and issuing her some challenges. Will she undertake that, as and when the PPP goes ahead, there will be no loss of openness and transparency? That is not a high threshold to reach, given what we have now. Will she undertake to report back to the House and give the House an opportunity to decide on the issue of a PPP so that, unlike many previous decisions, this decision will not be
smuggled through without proper parliamentary scrutiny? Will she assure us about her understanding of what private sector disciplines mean as applied to this case? Will she also say something about the Government's commitment to diversification, or not, for the future business of BNFL? Liberal Democrat Members believe that only that diversification will allow us to underpin and guarantee the technology base, the manpower and the skills that the company possesses.7.57 pm
Ms Helen Southworth (Warrington, South): More than 2,000 people work at BNFL headquarters in Warrington, most of whom live locally. Unsurprisingly, the company's performance and prospects are very important in my constituency and the north-west. Even by excluding investment in external capital and joint ventures, disregarding BNFL's 15 per cent. stake in NNC, which employs 1,000 people at Knutsford, and excluding Urenco, which BNFL jointly owns with Dutch and German partners, BNFL contributes £790 million a year to the north-west economy. It has an incredible impact on the supply chain in my region.
BNFL is extremely big business for Britain. Following the acquisition of Westinghouse and ABB nuclear business, about half of BNFL's £2 billion annual turnover now comes from overseas trade. Those overseas contracts are incredibly significant for the British taxpayer because they help to reduce liability costs. For example, THORP contributes more than a quarter of the Sellafield site overheads, at around £250 million per year. Without THORP's overseas work, much of that cost would fall on the British taxpayer.
My right hon. Friend the Minister and the Chairman of the Select Committee, my hon. Friend the Member for Ochil (Mr. O'Neill), will not be surprised to discover that I am particularly interested in BNFL's impact on the region's science base. It is a knowledge-based company and a number of hon. Members referred to its world- leading skills and technologies that are vital for the United Kingdom. BNFL spent £96 million on research and development in the last financial year, which puts it in the top 20 UK companies that are involved in research and development investment.
BNFL is a major player in science in the north-west. It is encouraging universities there to build on BNFL technological development. Developments, such as chemical vapour deposition technology at Salford University, laser scabbing at Liverpool university and UMIST, auxetic materials technology at the Bolton Institute and radiation neutron selectors at Lancaster university have been mentioned, but are worth considering in more detail. On average, over the past five years, the company has sought patent protection for about 40 inventions a year. That adds up to about 240 individual patent applications pursued over the years. The novel technologies include microchemical engineering, auxetic materials, sensing technologies, new methods of separation, laser technology, biotechnologies and supercritical fluid separation.
The company has more than 100 relationships with 35 universities, most of which are in the United Kingdom, through which it directly invests more than £3 million each year. It has established a radiochemicals centre in partnership with Manchester university and a
particle technology centre with Leeds university. It also supports Westlakes postgraduate centre in Cumbria, in the constituency of my right hon. Friend the Member for Copeland (Dr. Cunningham), where nuclear, non-nuclear, environmental, genetic and epidemiological research is undertaken. BNFL makes far more than a minor contribution to the north-west science base. It provides staff and other resources to several university courses and a number of the company's staff hold professorships at UK universities.BNFL is a high-tech company that is driving Britain forward in the international knowledge-based economy. The prospect of the PPP gives us a timely opportunity rigorously to scrutinise the operations and performance of the company and to ensure best possible value for the taxpayer, within a framework and culture of safety for the public and the environment, while protecting crucial investment in what I and many of my right hon. and hon. Friends believe is the best and most important region in the country.
It is disconcerting that after 30 years in public ownership, it has taken the review of BNFL's status and structure that was decided on early in this Government's tenure, for the shareholders on behalf of the public--Ministers--fully to exercise their responsibilities. The evidence given to the Committee by my right hon. Friend the Minister for Energy and Competitiveness in Europe is extremely welcome, especially her commitment to "shine a light into dark corners" at BNFL. We want the company to succeed and the shareholder on behalf of the British taxpayer must ensure that that happens.
Also welcome is my right hon. Friend's commitment to pursue the achievement of safety and performance targets set for the company, and her undertaking not to take her eye off the ball in respect of BNFL's performance. I am happy to put those statements on the record, because they are extremely important aspects of the evidence taken by the Committee. The Government's reply to the Committee's recommendation that new stringent, but achievable, targets should be set, linked to the company's own objectives and with clear time scales, promises revision in the light of the year's performance and the corporate plan. Will my right hon. Friend state what progress has been made and when the revised targets will be published? We shall continue to take a close interest in the targets, because they can be used to demonstrate whether the company is making progress.
Like many right hon. and hon. Members, I consider the appointment of a new chairman and chief executive who have said that they are
- determined to make a real and lasting change
Sellafield has an unhappy distinction: according to their manifestos for elections to the Northern Ireland Assembly, the only policy on which the political parties within the Assembly agree is their demand for Sellafield to cease operations and to stop discharges into the Irish sea.
I have made it clear before to board members and I say now, on the record, that Sellafield has to clean up its act and, most important, it must be seen to do so. The new team promises that safety and cultural issues are being addressed. Its members say that they recognise that safety is not only in the equipment, but in the mind. They have to be sure that it is in the mind of every person working in and monitoring activities of the business, which includes people who are contracted to carry out work for the company. Public confidence, both national and international, depends on their performance in the coming months.
We all know that safety has huge environmental and commercial significance. It has to be like the lettering in Blackpool rock, running all the way through, so that wherever one cuts it the message is clear. BNFL is a global player in the international energy market and making sure that it is a safe and successful player is the responsibility of the owner--the Government.
The Select Committee investigation clearly stated that BNFL has been allowed to go its own way for far too long. For most of the past three decades, it has been more constrained by regulators and pressure groups than by supervision and scrutiny exercised by Ministers and Parliament. British Ministers have to take seriously their responsibility for a business that has great significance to the British taxpayer. I am pleased that my right hon. Friend the Minister for Energy and Competitiveness in Europe has put on the record her commitment to doing so.
One of the most significant opportunities that the PPP will bring to BNFL is swifter decision making on required investment. The company is of major economic importance to UK plc. Business lost by BNFL goes overseas, into a market worth more than £20 billion. The system that has been in operation for the past 30 years has proved to be over-long and cumbersome, and too often disconnected from the demands of business.
The company has reported that nearly half of the forty-odd key action points from the Health and Safety Executive Sellafield inspection report have been addressed--and so they should have been. There must be constant and systematic progress within the company in respect of safety management. Concerns about discharges from Sellafield and other BNFL sites, which the Environment Agency expressed to the Select Committee, are critical in every sense of the word. One of the regional general managers told the head of Magnox generation in November 1999 that
- the agency has gained an overall impression that the company is not demonstrating sufficient corporate ownership of the problem.
It would be helpful if my right hon. Friend the Minister for Energy and Competitiveness in Europe gave an indication of progress on the decision from the Secretaries of State for the Environment, Transport and the Regions and for Health on the full commissioning of the main
MOX plant at Sellafield. The PPP offers timely decision making, but the company cannot wait: the delay in full commissioning has been costing BNFL £1.5 million a month.The Government reply stresses the need to take the decision in the light of the latest assessment of the market for MOX and its impact on the economic case for the plant. That is true, but in an ideal world it would be the responsibility of a more commercially attuned board to decide whether it was prudent to press ahead with the opening of the plant and to assess whether the low level of assured customers made the risk of opening worth while. However, we live in the real world: the issue is urgent and requires a decision to be made.
Safety management at Sellafield has been clarified by the appointment of a director of site operations, and a new team of senior independent safety compliance advisers is being appointed. The company is in the process of demonstrating that all 15 of the HSE's recommendations are being met, and Kansai has lifted its trade moratorium on BNFL. Ministers will retain rights and responsibilities as shareholders, at least for the next few years, and the Select Committee requires progress on a decision on MOX.
BNFL's importance to the north-west is not only economic. The company has a large presence in community initiatives in the region: last year, it put £5 million into local projects. I should like to thank the 120 BNFL graduate recruits who worked in Westy, the most deprived ward in my constituency, last month. They have made a real difference. Last Saturday, I visited the community centre at St. Margaret's and saw how they have transformed it. People coming to my constituency surgeries now have a wonderfully pleasant environment in which to wait to be heard.
BNFL makes a great deal of difference in the north-west in many ways. The clean-up across Westy has really improved things for the local community. BNFL is a local and national asset. It needs the active interest of the shareholder and a businesslike attitude from the Government. The taxpayer needs the Government to make timely and effective decisions about the future of BNFL. The company needs to perform excellently in addressing business and safety in the public interest. There should not merely be talk about safety, it should be demonstrated. Systems should be sufficiently transparent to enable people to believe that that is happening.
The debate allows me to refer to the significance of nuclear energy in achieving our Kyoto targets. The reality of weather changes from global warming have been brought home to hundreds of homes in Britain in the past few weeks. There have been headlines such as, "Chaos As Storms Return", "Storms Batter UK", "Sandbag Sales Rise Along With Water" and "Severe Flood Warnings For More Than 40 Rivers".
Wild weather in Britain causes misery to people and destruction to property. In the developing nations, thousands die and hundreds of thousands are made homeless. It is a catastrophe in human and economic terms. Hurricane Mitch, which ransacked Nicaragua and Honduras in 1998, caused more than 9,000 deaths. The two tropical cyclones in Mozambique at the beginning of the year left 1 million people homeless and more than 1 million cattle dead, the main form of the economy and the sustenance of people in that country.
The impact of global warming is not academic. It costs too high a price, and it is people who pay it. Thanks to the evidence of temperature records for 150 years, and information stretching over a millennium from ice caves, corals, tree rings and historical documents, there is no longer a serious argument among scientists about whether the earth is heating up. During the past 100 years, global temperatures have risen by more than half a degree. The seven warmest years on record were in the 1990s, and 1998 was the warmest year in the warmest decade in the warmest century of the millennium.
Higher temperatures mean that more water evaporates from the earth's surface. Water vapour is an energy source. It cranks up the heat engine that drives the weather. It leads to increasingly violent storms and gives greater energy to hurricanes and cyclones. Indeed, the news becomes worse. If rainstorms are more intense in one place, that means that there is less rain elsewhere. Terrible suffering is caused by drought in some parts of the world. Scientists are predicting that some areas will become steadily dryer as the world warms.
Nuclear power accounts for about 25 per cent. of Britain's electricity supply. In the past financial year, nuclear energy in the UK avoided the emission of about 79 million tonnes of carbon dioxide. That is equivalent to 50 per cent. of the carbon dioxide emitted by transport on the roads. The industry is critical in managing the balance between demand for energy and protection of the climate.
As a member of the Select Committee, one of the stranger things that I have seen this year is the Greens in Sweden managing a bizarre political coup. They closed a nuclear power station a decade earlier than planned. What is the most likely way in which they will replace that energy source? The answer is coal-fired production. We must have a realistic energy policy and an investment strategy for the future. Covering our eyes does not make global warming go away, and it is the poorest people on the planet who will pay the highest price.
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