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Ms Hewitt: I entirely agree with my hon. Friend about the need for waste policy to distinguish between the historic liabilities—which we can do nothing to get rid of but must manage as effectively as possible and ensure that the environment is protected—and the current liabilities arising from continuing operations. As I said in my statement, there will be no transfer to the LMA of the liabilities that arise from BNFL's commercial operations. That transparency, along with the continuing work to estimate the real costs of these liabilities, will assist better policy making in future, as my hon. Friend has suggested.

Mr. Michael Weir (Angus): On behalf of the Scottish National party and Plaid Cymru, I give a guarded welcome to the statement. I say "guarded" because we would like to know more about the role of the LMA. The Secretary of State promised to publish a White Paper in the spring. She was asked earlier whether the LMA would be completely independent, and I do not think that she really answered the question. Can she confirm that it will be completely independent of BNFL and the United Kingdom Atomic Energy Authority?

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The Secretary of State said that it is proposed that current wastes will be removed from existing, ageing stores as soon as reasonably practicable and will be treated and packaged to enable them to be stored safely for decades. She will be aware, as the Minister for Industry and Energy certainly is, of the problems at Dounreay and the uncertainty about what is in the shaft. Is it proposed to remove waste from the sites to other areas or will it be re-stored in new stores on the existing nuclear sites?

Ms Hewitt: I am grateful for the hon. Gentleman's welcome for the statement, even if it is guarded. He is right to ask me about the status and independence of the LMA. I apologise for not dealing with that earlier.

The intention is that the LMA will act on behalf of Government but that it will operate at arm's length from Government. We will exercise strategic control, but the running and development of the LMA will be down to its board and management team, which will be independent of the companies with which it will contract. A framework agreement will define the authority's aims, objectives and responsibilities, and its relationship with Government. We will have more to say about that in the White Paper.

On the question of Dounreay and other sites, I was describing the future strategic intention of BNFL when it comes to dealing with historic wastes. There are no immediate proposals of the kind to which the hon. Gentleman referred.

Tony Cunningham (Workington): I very much welcome the Government's decision to reconstruct the UK's public sector nuclear liabilities. Does my right hon. Friend agree that the assets of BNFL lie very much in its work force, thousands of whom live in my Workington constituency? They have a unique technical, scientific and engineering knowledge base. The decision will mean that BNFL will be able to use the tremendous skills of its work force to the absolute maximum.

Ms Hewitt: I entirely agree with everything that my hon. Friend has said. The real assets of BNFL are, indeed, its people and their extraordinary technical expertise. That expertise is recognised world wide and the management has succeeded on building on it in the period since the earlier, rather unfortunate, incidents took place. The statement and the new arrangements will give the company and its work force the chance to build on their recent successes.

Mr. Nick Gibb (Bognor Regis and Littlehampton): Is not the truth that the statement provides a bail out of an insolvent BNFL? It is insolvent because of the transfer of Magnox Electric to BNFL in 1998; insolvent because of BNFL's bad performance in the United States; insolvent because of the Government's appalling handling of the MOX data falsification, which wrecked relations with customers in Japan; and insolvent because of the inordinate delay in the approval of the MOX plant.

Now that all the strategic decision making about reprocessing and MOX lies at the Department of Trade and Industry, with BNFL as a mere contractor, will the Secretary of State tell the House what the intentions are? Does she want more reprocessing contracts or does she want to concentrate solely on managing the liabilities and

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minimising the expense to the taxpayer? Will she commit herself to keeping the House informed about the profitability or otherwise of the commercial operations—namely, the THORP and the MOX plant operations—that will be taken over by the LMA, so that any losses generated by those operations are not simply obscured in the overall nuclear liabilities taken on?

Ms Hewitt: My hon. Friend the Minister for Industry and Energy was recently in Japan, where he met not only Ministers but representatives of BNFL's customers. I do not think that they would recognise the hon. Gentleman's description of our current relations with the Japanese Government and with BNFL's customers there.

On the future operations of BNFL and the LMA, I have already said that the new arrangements will provide much greater transparency of the liabilities and the assets. I shall, of course, continue to keep the House fully informed.

Paul Flynn (Newport, West): Is not the statement an attempt unfairly to rig the energy market in favour of nuclear power to the detriment of other power producers? Although the military legacy is certainly a national legacy, the civil nuclear industry has always been an economic basket case and has never been viable without public handouts. If we are to discharge the nuclear industry from the legitimate legacy of the past, will we charge it for the new legacy that has arisen since 11 September?

We know that France has installed surface-to-air missiles in its power stations and that jets have been scrambled near Sellafield after an emergency there. An agency in France has claimed that if an 11 September attack took place on a nuclear-powered processing plant such as that at La Hague or Sellafield, it would produce 60 times the amount of caesium that was released at Chernobyl. Who will pay for the additional costs of defending those sites? What would we have to pay to insure against 60 Chenobyls?

Ms Hewitt: The nuclear industry in the United Kingdom provides about 25 per cent. of the electricity on which all of us—both domestic consumers and business—depend. I think that the industry has served the economic needs of the country very well.

The historic liabilities that were the subject of my statement are there regardless of the future of nuclear power generation. They have to be managed in the most effective and environmentally responsible manner possible. I hope that my hon. Friend will agree that the arrangements that I set out in the statement are a real step forward in that direction.

My hon. Friend also raises the important issue of the security implications that arise from the atrocity on 11 September. We and the director of civil nuclear security have reviewed security procedures in the light of that attack, although for obvious reasons I do not propose to go into the detail of those arrangements. Each country makes its own judgment of the measures that are necessary to ensure the security of its infrastructure, including nuclear power stations. The RAF certainly maintains a high state of readiness in support of the air defence of the United Kingdom, and that readiness was reviewed in the light of the attack on the United States.

John Thurso (Caithness, Sutherland and Easter Ross): May I welcome one aspect in particular of the

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quinquennial review? It relates to the UKAEA pensions office located in Thurso in my constituency. I understand that the review praises the office for being particularly efficient and effective. As it has been the subject of two quinquennial reviews, could the Secretary of State give it time out from the next quinquennial review, because it has clearly done such a good job?

On Dounreay, significant changes will clearly be made as a result of the announcement of the new statutory body, but they should not alter the practical priorities for the UKAEA. Will the Secretary of State assure me that the Dounreay site restoration will proceed as planned, in a full and effective manner?

Ms Hewitt: First, I agree with what the hon. Gentleman says about the excellence of the pensions administration for the UKAEA. The office will continue to operate out of Thurso. Secondly, one reason for the recent change at Dounreay was to ensure that it was possible to focus more effectively on the management of the liabilities. I am sure that the hon. Gentleman would join me in welcoming that.

Mr. David Chaytor (Bury, North): I welcome the statement and congratulate my right hon. Friend on getting to grips with the issue so early in her term of office. My only regret is that the statement was not made 30 years ago. Had that been the case, we might have had a better understanding of the economics of nuclear power generation and avoided some of the worst public policy mistakes of the past 50 years.

First, is it not the case that the liabilities to which my right hon. Friend referred are not the totality of historic liabilities? The sum of £42 billion—£35 billion for BNFL and £7 billion for the UKAEA—constitutes only a minority of the total sum of liabilities and decommissioning costs in the United Kingdom, which stands at £85 billion. The additional £43 billion is presumably primarily for decommissioning costs and the liabilities of British Energy. Will my right hon. Friend assure the House that there will be no Government bail out of the liabilities of British Energy or other private nuclear establishments?


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