Examination of Witnesses (Questions 300-311)
RT HON
MR MICHAEL
MEACHER, MR
RICHARD WOOD
AND DR
MALCOLM WAKERLEY
MONDAY 17 DECEMBER
2001
300. In terms of nuclear build, and you mentioned
this in your response a moment ago, is it your judgment that until
the issues of the disposal of waste have been satisfactorily resolved,
there should not be any new nuclear power stations built in the
United Kingdom?
(Mr Meacher) I think you ought to wait and see what
the results of the PIU Report actually are, and what proposals
they make or do not make about any further nuclear build. I do
not think I can go beyond that point at this stage.
301. What about the Royal Commission on Environmental
Pollution, which again said that until there was a demonstrated
solution to this problem there should not be any nuclear build?
Are you constrained from commenting on that 25 year-old conclusion
by virtue of this report?
(Mr Meacher) No. The Royal Commission Report is already
on the table and certainly before any new nuclear build was determined
it does seem to me extremely important that the Government should
have a view about the long-term disposal of waste. I am not saying
that there should be no new nuclear build until the waste has
been disposed of or until a decision has even been taken as to
how that might be done, I am simply saying it is a decision of
very great importance considering its cost and considering the
long-term implications. Mrs Thatcher was very good about talking
about sound finance, which I understand to be taking decisions
today on the basis of today's conditions which did not involve
having to borrow or find yourself in difficulties years hence,
I think that is quite a good way to go in respect of waste as
well.
302. Clearly the Chancellor in looking at his
golden rule knew where to look for the origins of it. As far as
the CO2 emission targets are concerned, as I understand it the
closure of the Magnox stations is factored into us achieving our
Kyoto target. What about the situation thereafter against your
own target, which sees a greater reduction of Kyoto and CO2, of
the programme for the closure of the advanced gas cooled reactors?
Is that reduced target achievable without having a programme to
replace the AGRs?
(Mr Meacher) The reprocessing of Magnox fuel is due
to end about 2012, and that of course is well before the Sintra
target date of reducing radioactive discharges to background levels
by 2020. Even if reprocessing in THORP continued to 2020, the
discharges will by that stage be extremely low and not inconsistent
with the strategy. You are asking a wider question about the achievement
of the climate change targets, not just the 5 per cent under Kyoto
but a significantly higher level which I would expect to be discussed
at COP 8 in November of next year when we perhaps, having got
the mechanism to deliver Kyoto under our belt through Bonn and
Marrakech, will then turn to what is called the "adequacy
of commitment" which is in fact the targets. I would expect
that many Annex 1 countries, particularly in the EU, will be arguing
for further commitment periods beyond 2008-2012 to be looking
at a level of 20, 25, 30 per cent. The Royal Commission, of course,
was talking about 60 per cent by 2050, and indeed that is what
the scientists tell us is the minimum reduction necessary to stabilise
the level of CO2 in the atmosphere, which is the only way to try
and arrest the future increase of climate change. So it is extremely
important. Britain, happily, is in a very strong position, probably
more so than any other country in the world, or equal with Germany,
in terms of our targets. We have to achieve a reduction under
Kyoto of 12½ per cent in the six greenhouse gases by 2010
compared to 1990, and we are on target to achieve around 23 per
cent. That does give us a certain leeway. I am not suggesting
we are complacent, but I do not believe the argument that it is
necessary to maintain a significant nuclear source for electricity
generation in order to achieve the climate change targets. There
may well be other arguments for doing it, in terms of security
of supply, in terms of balance, possibly in terms of cost although
it rather looks the other way at the moment, but not I think the
climate change one. The reduction will be gradual and, of course,
over time—and again it is a question whether these are synchronised—the
increase in renewable sources of energy will come on stream more
and more. You will have seen, and I am not giving away any secrets
because it has been leaked in the papers, a suggestion there should
be a 20 per cent target for renewable sources for generating electricity
by 2020, that is pretty ambitious, but again many of the companies
like Shell and BP are themselves in the market intending and expecting
to reach 50 per cent by 2050. If all those happened, and they
are broad orders of magnitude but if that kind of progress and
momentum is achieved, it is not necessary to reduce carbon generation
by new nuclear build or by extending nuclear reactors. There may
be other arguments for doing it but not climate change ones.
Mr Breed
303. Can I turn to the Liabilities Management
Agency. As soon as we started this investigation all sorts of
things happened. First of all, the House of Lords' report was
published and then suddenly we had an announcement on the LMA.
You will be aware that there has been a fair bit of criticism
about the way in which it is perceived, that the public sector
is taking over the liabilities of BNFL and leaving them with potential
profits, so it may be an area for partial privatisation in the
future. How do you respond to those sort of allegations? That
the setting up of the LMA is effectively lifting those massive
liabilities off the company and putting them very much on to the
taxpayer?
(Mr Meacher) We have to deal with what is there. I
do understand the force of that argument. There is political force
behind that argument. The total level of liabilities is calculated
at around £85 billion. Some of that is of military origin
and of course it is over a long period of time. Approximately
£34 billion of that is attributable to BNFL, something like
£30 billion to MoD, about £14 billion to British Energy
and about £7 billion to UKAEA, so it is not all BNFL by any
means and of course this is over a long period of time. I do understand
the argument, but the question is what at this stage, and this
is an uncomfortable decision, are the options. Now clearly one
has to manage those accumulated liabilities in one way or another.
Do you just leave it with BNFL or does one find another way of
trying to manage them better? Do you then look at the rest of
the organisation and decide on a business plan which might enable
the remainder, either in one or two parts or whatever, to be profitable?
That is the discussion which is now being undertaken at the present
time. It is uncomfortable but one cannot just say, "We have
huge losses, let's ignore them." We have to deal with it.
304. Doing that, effectively that is what we
have done. We have lifted those liabilities and put them very
much on the responsibility of the public sector.
(Mr Meacher) Half, or thereabouts, as I have indicated,
are in the military sector.
305. But it has been suggested that that £85
billion itself may not be accurate in respect of the potential
long-term waste and exactly what those liabilities are. RWMAC
said it may be considerably more than £85 billion.
(Mr Meacher) I cannot speak to that. The advice I
receive is that is approximately the level. It does seem to me
to be a gigantic figure and I think it is serious enough. Whether
or not it is £90 billion or possibly more, let's assume it
is £85 billion, it is a huge total. One does have to ask
the question, if you think the Government's proposal is not the
best, what is the alternative?
306. There was some suggestion about a segregated
fund for the public sector civil nuclear aspects of that, but
that would have to be agreed with the Treasury presumably. Has
there been any further discussion or any further movement on this
whole idea?
(Mr Meacher) No, but of course there is a consultation
on this. Clearly those who have got proposals are going to tell
the Government, and I am quite sure there will be parliamentary
debates about this. This is on such a massive scale that I do
not think there is not going to be a serious and sustained public
debate; there ought to be.
307. Are there any other options which might
be available?
(Mr Meacher) The Government has proposed its option,
I think it is for others to suggest theirs.
308. Lastly, does the LMA itself have a role
in developing policy? How will it interact with any independent
body? Is it going to produce its own evidence? Is it going to
be actively involved in the policy-making?
(Mr Meacher) It will of course still be subject to
regulation in exactly the same way as BNFL is at the present time.
It may well play a role in policy formation but it is subject
to exactly the same parameters as BNFL at the present time.
Chairman
309. Minister, you have said quite frequently
that you have to take a decision which is good for 10,000 years
or more. We have had people suggest to us that in fact we do not
want to do that because we do not wish to commit future generations
to a policy which they cannot retrieve, that in fact we should
do something which, if they change their mind or their technology
improves, would enable them to improve on what we do. How do you
respond to that? What are the implications which flow from a philosophical
acceptance that that might be the sensible way forward?
(Mr Meacher) I have a lot of sympathy with that. Unless
we reach a solution which everyone shouts and claps their hands
and is excited that this is obviously right and sensible, and
I do not think we are going to achieve that—
310. In which case you will panic, no doubt!
(Mr Meacher)—there will be considerable opposition
to whatever we do. To that extent, the more we can avoid irreversibility
the better it is. That is why, even if one goes for deep level
disposal, I think it should remain retrievable and monitorable
for a long period of time. But I repeat, there is a lot of technological
work being undertaken in many countries—Sweden, Finland,
USA—trying to resolve this problem. I think it would be
very unwise prematurely or precipitously to come to a conclusion
when, as you indicate, it is possible there might be some kind
of break-through in 10 or 20 years in one of these countries.
We have got 50 years, 50 years is a long time with some of the
most able people in the nuclear industry in the world having their
minds concentrated on this problem. I think there is a reasonable
prospect that we will find technology not available today which
is better than anything currently at our disposal.
311. A week is a long time in politics, Minister,
we have been talking about slightly longer timescales than that
today. We are grateful to you for coming to see us. You are one
of our more regular customers, or we are one of your more regular
customers. We thank you for your evidence today, we look forward
to seeing you in the New Year and, leaving all politics apart,
we wish you a Happy Christmas.
(Mr Meacher) Thank you, and may I you.
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