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Mr. Chaytor: I understand that perfectly well. I understand that only Britain, France and Japan, and possibly Russia, are interested in reprocessing, or see it as a valuable activity. It is significant that the United States withdrew from reprocessing some years ago. In Japan, the question of reprocessing is hugely problematical. The Japanese have been attempting to build their own reprocessing site for many years, and it will be some years before it is completed. Public opinion in Japan, as in western Europe, is steadily turning against the further expansion of nuclear power, and is certainly increasingly critical of the reprocessing industry and the international plutonium trade.
I do not deny the points that my right hon. Friend makes. I simply say that we must put the matter in its international context. At the moment, the United Kingdom and France are the only countries seriously committed to reprocessing. I suspect that market forces in the United Kingdom will gradually lead to the winding down of the reprocessing industry. Part of the evidence for that is the memo from British Energy in its submission to the Committee's inquiry, and the further briefing papers that British Energy distributed before the debate.
There has been some criticism of British Energy. I hold no brief for British Energy, but there has been some criticism to the effect that it must understand that it cannot abrogate contracts. In its defence, that is not what I understand it to be saying. It is saying that it wants to renegotiate contracts. There are perfectly respectable precedents for the renegotiation of contracts, particularly when there are mutual advantages.
That brings me back to the point made by my hon. Friend the Member for Ochil in reply to my intervention, when he said that the comparative costs of reprocessing and storage are matters of opinion, not evidence. I must disagree with him, because there is now a body of evidence, part of which was produced by Dr. MacKerron, who made an important submission to the Committee and whom my hon. Friend mentioned earlier in glowing terms.
Dr. MacKerron's work at Sussex university has demonstrated that the renegotiation of the reprocessing contracts as storage contracts would have a mutually beneficial result. There would be money for British Energy and for BNFL. In that sense, renegotiation of existing reprocessing contracts seems to be a win-win situation. It is a sign of our collective political and industrial inertia that we find it so difficult to accept criticism and to accept that we have made mistakes, so it is difficult to turn policy round, even when the facts are staring us in the face.
I understand the urgency with which hon. Members who support the Sellafield MOX plant want the Government to respond, and the interest in the matter. There have been a number of consultations and inquiries into the viability of the MOX plant. I understand that the Government's position is that approval for the MOX plant, which is the responsibility of the Deputy Prime Minister, will be granted purely according to the criterion of commercial viability. As of four weeks ago, the MOX plant was not commercially viable. BNFL had committed £300 million to building it in advance of obtaining authorisation to operate it.
That in itself raises interesting questions about the provisions of the Radioactive Substances Act 1993. It is astonishing, and I cannot think of a parallel in any other industry. What other industry would allow a company to build such a plant without approval to operate it? The sum of £300 million was committed, but, because of the errors at the MOX demonstration facility, and the falsification of fuel data, we are committed to spending another £100 million to bring fuel back from Japan.
Huge amounts of what are essentially public funds have been committed in advance of any evidence that the MOX plant will be commercially viable. I recollect that the inquiry by the PA Consulting Group argued that there was a commercial future for MOX only on the assumption that the £300 million initial capital investment would be regarded as sunk costs. That is crazy economics, and all too typical of the accounting procedures in British Nuclear Fuels for many years.
I understand the reasons for the company's strenuous efforts to secure the Japanese business, but it would be amazing if it got the 100 per cent. of contracts that it needs for commercial viability. Even if it succeeded, and announced in a few weeks that it had a full work load for MOX, that contracts had been signed and sealed and that the Government should therefore grant approval, there is an overwhelming argument against the international plutonium trade that MOX represents.
The issue should be debated more widely, and the public should be fully aware of the implications of the plutonium trade. We are shipping spent fuel from Japan to the United Kingdom, separating the uranium and the plutonium, mixing them together in ceramic pellets, and shipping it back halfway across the planet so that it can be burnt again in Japan. It then generates more spent fuel
Let us consider the Oslo and Paris convention, which some hon. Members have already mentioned. Every member of the European Union in the Ospar convention--except, understandably, Britain and France--voted for the recent recommendation that reprocessing should be phased out. We should bear in mind the strength of feeling against reprocessing in all the other European countries. It is not surprising. Countries such as Iceland and Norway depend to a large extent on the purity and clarity of the waters of the North sea, because so much of their economy is based on fishing. When they find that, hundreds of miles north of Sellafield, technetium-99 is contaminating their fish stocks, it should not surprise us that they support an end to reprocessing. All the parties in Northern Ireland, and Ireland itself, also support that, because of the impact on their waters and fish stocks.
Let us consider the BNFL response to Ospar. When the Ospar conference at Sintra in Portugal reported its decision to aim for discharges that were close to zero by 2020, the management of BNFL issued a statement that that would be no problem. It said that it was possible to achieve that through abatement technology, and that it intended to meet the target. However, I understand that more recently, the BNFL position has changed, and that its submission to the current Environment Agency consultation on discharges takes a more hawkish line. It claims that it cannot possibly meet the Ospar requirements on discharges. I should be grateful if my right hon. Friend the Minister could comment on that; if she cannot do so now, perhaps she will say something later. The BNFL view of Ospar is important. Can the company comply, and what will it cost to do so? If it says that it cannot, where does that leave reprocessing?
Several hon. Members have argued that we should continue, or expand, the use of nuclear energy because of the Kyoto protocol and because burning uranium does not directly lead to CO 2 emissions. That is perfectly true, but the fact that there is no direct link does not mean that the nuclear industry is not responsible, through its other processes, for a considerable volume of CO 2 emissions. We need to view the situation in a wider context.
I am sceptical about the sudden conversion of BNFL and other parts of the nuclear industry to being clean and green. The industry's history shows that different justifications have been used in different decades to defend the industry's future. As each decade passed and the initial justification was undermined, it was quietly dropped and a new justification emerged. Arguing that nuclear power is needed to meet the Kyoto targets is the latest of those justifications.
Interestingly, when the conference of the parties to the Kyoto protocol meets next week and the week after in The Hague to discuss the precise ways in which the protocol will be implemented, the EU position in the negotiations on the clean development mechanism, which is supported by the UK Government, will clearly state that nuclear energy has no role whatever in that mechanism. I welcome that and hope that our and the EU negotiators will stick to it. It clearly demonstrates that the understanding throughout the EU is that although the
We briefly discussed the renewable nature of nuclear energy. Some people argue that nuclear energy is renewable, but they forget that its renewable dimension involves the fast breeder reactor. Research on the fast breeder reactor stopped in Britain in 1994 and in France shortly thereafter. Worldwide, only Japan continues with such research. Conceivably, the fast breeder reactor could, perhaps in many decades' time, produce a completely renewable form of nuclear energy.
When it is argued that renewables cannot take the place of nuclear energy, we should remember that nuclear energy currently provides 20 to 25 per cent. of our electricity. The Government have a target of getting 10 per cent. of electricity from renewables by 2010, by which time the closure of the Magnox stations will be reducing the total proportion of power generated by nuclear energy. The likely scenario in 2012 or 2013 is that there will be no reason why we cannot meet our renewables targets. In view of the enormous increase in renewables technology in recent years, I suspect that those targets will be easier to meet than was previously thought. By the early years of the next decade, the proportion of electricity generated by nuclear energy and that generated by renewables could be more or less the same.
We must accept that nuclear energy has a role to play, but that it is likely to be significantly smaller. The growth in energy use will unquestionably involve renewables, hydrogen, photovoltaics, biomass and the exploitation of wind and waves. To defend, or to justify an expansion of, the nuclear industry on the ground that renewables cannot replace the existing proportion of electricity generated by nuclear energy is simply not sustainable.
I support the Government's approach to BNFL. They deserve enormous credit for advancing the PPP plan, which is not revolutionary--it was envisaged when the company was established under the Atomic Energy Authority Act 1971. The 51-49 per cent. split meant that primary legislation was not necessary to establish such a partnership, which meant that the matter could be approached slightly more secretively than would otherwise have been the case. I hope that our Government will not do that, and that there will be ample opportunity to debate the details of the partial privatisation in the months ahead.
The key question is: what is going to be privatised? My concern is that when the PPP is constructed the taxpayer should not be left with all the liabilities. The temptation, especially if there is little interest in the City because of the enormous liabilities attaching to BNFL, will be to do some hiving off and separation. The taxpayer will pick up the liabilities and the new PPP company will gain all the assets and lucrative work for the future. In my view, and in the view of an increasing number people across a wide spectrum, the future for BNFL is not in reprocessing, the international plutonium trade or attempting to expand what is rapidly becoming obsolete technology, but in the massive task of nuclear clean-up and decommissioning across the world.
Secondly, paragraph 47 on page 20 refers to the study by Touche Ross in 1993, which was supposed to be among the evidence that led to the approval of THORP. As I recollect, the Touche Ross study did not exist, and nobody has proved that it did. People working under the auspices of Touche Ross may have considered such matters, but there was no written report that could conceivably be described as a study. I should be grateful if my right hon. Friend would comment on that.
The report has done a service to the cause of open debate about energy policy in the United Kingdom. It has done a service to the company, because the secrecy in which it has operated for some years has done it and the industry no good. I echo the call by other hon. Members for greater transparency and openness in the future.