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Mr. Savidge: Members of the Environmental Audit Committee asked a number of leading experts from this country, such as the Round Table on Sustainable Development, and from Europe--for example the European environment committee--for their views on what is most environmentally friendly and economic. They put

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energy efficiency first, followed by renewables and fossil fuels in order of carbon burning, and they regarded the nuclear option as the worst from both points of view.

Mr. Gibb: That is their opinion and they are entitled to it. It is an opinion that we should hear in this debate, although it is not necessarily one that is shared by many people. It is not realistic to assume that we can make up for the 8 per cent. of electricity that will be lost as a result of the closure of the Magnox stations through energy efficiency--3 per cent. is the maximum that that would save--and demand for electricity is increasing hugely. The figures do not stack up.

The Government's policy--to the extent that they have a coherent policy at all--appears to be, by default, abandoning their Kyoto targets after 2012. That lack of coherence has infected the Department of the Environment, Transport and the Regions in its equivocation over the decision to approve the commissioning of the main Sellafield MOX plant. That facility has been ready for more than two years, but still no decision about full commissioning has been made.

Paragraph 70 of the Trade and Industry Committee report cites a report by the PA Consulting Group, noting:

It warned that "any significant delay to the commissioning start date" could affect customer confidence and "place BNFL at a competitive disadvantage".

The PA Consulting Group report was published in 1997. In November 2000, a decision has still not been made. The Select Committee report concluded:

The delay in deciding on whether to permit full commissioning of the Mox plant has gone on long enough.

So it has.

Delay, dither and incompetence are the hallmark of policy making by Ministers on this issue--never more so than in the mishandling of the whole MOX data falsification affair by the Minister for Energy and Competitiveness in Europe. The House is aware that the matter first arose in September last year--as the right hon. Member for Copeland pointed out--when it was discovered that data records of secondary safety checks on a batch of MOX fuel pellets for a Japanese client had been falsified. As a consequence, operations at the facility were suspended--rightly so.

Despite initial statements to the contrary, it was later discovered that the pellets had already been shipped to Japan by the time the data falsification became known. As the House is also aware, the pellets were in fact perfectly safe. The secondary safety check was just that--an additional check on the size of the pellets, requested by the client. As the hon. Member for Ochil pointed out, the issue was one of contract compliance and not one of safety.

The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): It is important to make it clear to the House that the checks that were carried out were for quality assurance; safety has never been in question. Indeed, the nuclear installations inspectorate made that absolutely clear. It is most important that the hon. Gentleman gets his facts right; jobs are riding on this matter--as is the reputation of an important industry.

Mr. Gibb: It is very important that the right hon. Lady listen to what I am saying. My point was precisely that: it

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was not a safety issue--solely one of contract compliance. The right hon. Lady repeated what I said; I have no disagreement with her on that point.

However, the issue became one of how not to treat our most important business relationships. In February this year, just before the nuclear installations inspectorate report into that incident and into other management matters at Sellafield, a team of DTI officials visited Japan with a copy of the draft NII report to discuss the incident with the Japanese Government and the Japanese electricity industry. After those consultations, the British embassy in Tokyo--whose officials were closely involved with the negotiations--was firmly of the opinion that the MOX fuel that had been shipped out to Japan would have to be returned to Sellafield.

The advice from the embassy stated that

we feel that we have no choice but to look very seriously at the option of agreeing to return the fuel. And agreeing sooner rather than later so as . . . to avoid serious long-term damage to our relations with Japan in the nuclear field.

My understanding is that the advice from the embassy was strongly in favour of returning the fuel and warned Ministers of the consequence of not doing so.

Mrs. Liddell: Will the hon. Gentleman help the House to get to grips with how factual his position is? On which date was that advice given?

Mr. Gibb: The date of the advice was 14 February. It states:

Grudging agreement to return of the fuel after half-hearted attempts to find alternatives could be very damaging to BNFL and more widely. The most effective--possibly the only--way of restoring confidence and securing business for BNFL in a reasonable time scale would be to agree soon to return of the fuel.

Clear advice was given in February. Why did the Minister not accept that advice? Even without the advice, it was perfectly clear that the fuel would have to be returned. There were clear signals from the Japanese that they would not--indeed, could not--accept that the fuel remain in Japan.

Mrs. Liddell: Will the hon. Gentleman give way?

Mr. Gibb: I shall give way to the right hon. Lady in a minute, after I have asked a few questions. Why did she and her officials continue to refuse to allow BNFL to take back the fuel? Why did it take until July before the decision was changed and it was agreed that BNFL could take back the fuel? Will she reply to those questions?

Mrs. Liddell: I am grateful to the hon. Gentleman for allowing me to intervene because it gives me an excellent opportunity to set the record straight. The House will recall that the hon. Gentleman said that the alleged document to which he has referred was published on 14 February. I regret the fact that he has not done his homework, because on 10 February, Mrs. Anna Walker, the director-general of energy at the Department of Trade and Industry, issued a press release following her discussions on the return of the fuel with the Japanese authorities. The hon. Gentleman should have gathered from our debate that this is a serious issue, so he should get his facts right and do his homework. This is not rocket science; it is common sense.

Mr. Gibb: It is rocket science, and I have got my facts straight. The advice from the embassy is absolutely clear

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and it was not from Anna Walker. The British embassy in Tokyo told Anna Walker on 14 February that it was its firm advice that the MOX fuel should be returned to Sellafield from Japan at the earliest possible moment. BNFL was stopped from allowing the fuel to come back. It was only in response to pressure and in July this year that the fuel was allowed to come back. It was that grudging acceptance to take back the fuel in July that caused the damage to our relations with Japan.

Conservative Members understand the great importance to BNFL of its relationship with its Japanese customers and attach enormous importance to the UK's relationship with Japan. Japanese utilities have been an important factor in BNFL's commercial success, particularly the operations at Sellafield, which is the biggest employer in west Cumbria. BNFL is a world-class company with 23,000 highly skilled and competent employees worldwide with a proven track record in dealing with waste management and decommissioning. There are huge markets for those services here and overseas.

The right hon. Lady has done nothing to address my points other than to say that the DTI issued a press release on 10 February--so what? All that she has achieved so far is to misjudge totally the handling of the MOX falsification issue and thereby damage the relationship with BNFL's principal customer. Therefore, for the benefit of the House, will she tell us what will now happen to the returned MOX fuel from Japan?

The right hon. Lady and the Secretary of State have also managed to criticise the management of BNFL in public and in such a way that it has caused further damage to BNFL's reputation overseas, particularly in the United States, a crucial market for BNFL's decommissioning skills and experience. The Secretary of State's comment in The Independent on 17 February that

there is a fundamental flaw in the management at BNFL

has done incalculable damage to the company's reputation overseas.

Despite such language and the other statements by the right hon. Lady about root-and-branch reform of management, is she confident that all the managers and senior managers with direct responsibility for the data falsification issue have been moved and that the inherent problems that led to it happening in the first place have been dealt with? Indeed, my understanding is that one particular senior manager, with direct responsibility for this matter, was actually promoted, with the right hon. Lady's assent, to the board of BNFL. Is she confident that the Sellafield culture that many felt was at the root of the data falsification problem has changed? Those concerns echo the comment in paragraph 80 of the Select Committee report, which says that

the extent of change in managerial arrangements is rather less than appears.

The Government's track record on energy matters is lamentable. They have disastrously handled the Utilities Bill, which was incompetently drafted and badly taken through Parliament. That is an appalling policy basis that will burden our energy sector with millions of pounds of unnecessary costs, as will the disastrous climate change levy and the hefty duties on fuel. The Government have no coherent energy policy to deal with rising C0 ₂ levels, and now we have the crass incompetence of their handling of the problems facing BNFL. They could so easily have been sorted out--indeed, they still could.

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If the right hon. Lady had understood the validity of the advice from the British embassy in Tokyo about taking the fuel back; had used more considered language in responding to the NII report; and had understood the management issues at Sellafield and tackled them as a senior Minister should, BNFL would undoubtedly have ridden the MOX storm by now and established new and lucrative contracts with the Japanese. As it is, the Japan Times reported on 16 October that 10 Japanese electricity companies had recently awarded a £500,000 reprocessing contract to COGEMA, BNFL's French competitor. That is the legacy of the right hon. Lady's stewardship.

These are serious matters and this has been a serious debate. I hope that the Minister will address the issues raised by all Members with that seriousness in mind.

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