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28 Nov 2002 : Column 496—continued

Ms Hewitt: I should be delighted to meet my hon. Friend and other colleagues from the coalfield communities. I am happy to confirm that, far from jeopardising security of supply, my statement and all my actions have been designed to secure it.

My hon. Friend asked about support for the coal industry and coalfield communities. We have invested £150 million since 1997 in operating aid to coal companies, particularly through the Office of the Deputy Prime Minister. We have invested hundreds of millions of pounds more in helping people in the coalfield communities, including the one represented by my hon. Friend, to cope with the costs of the brutal restructuring of the mining industry under a previous Conservative Government.

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Mr. Ian Liddell-Grainger (Bridgwater): Given that both Hinkley A and B are in my constituency—one owned by BNFL, the other by British Energy—is the Minister happy that money being put aside for the decommissioning of one at the moment and another in a decade's time is sufficient to sort out the entire Hinkley Point area, which, the House will appreciate, is extremely important to my constituency?

Ms Hewitt: I completely understand the hon. Gentleman's concern. I confirm not only that we are strengthening arrangements for the nuclear decommissioning and nuclear liabilities fund in the steps that I announced today but that the Government, as always, stand as the guarantor of last resort for those nuclear liabilities.

Mr. John Grogan (Selby): My right hon. Friend referred to the aid that the Government have given the coal industry in the past. To enhance her reputation for even-handedness and fairness, will she look at the modest amount that the coal industry is making compared with the nuclear industry—nothing like £150 million to £200 million a year—and agree to lift the cap on operating aid to UK Coal?

Ms Hewitt: My hon. Friend is aware that the operating aid scheme has come to an end, although we extended it until the end of this year in order to deal with one particular problem. We succeeded earlier this year in securing, within the new European aid framework, provision for investment aid to that industry and we are now consulting on the nature of that investment aid scheme.

Mr. Simon Thomas (Ceredigion): Does not the abject failure of British Energy spell the beginning of the end of nuclear power in this country and certainly rule out new build for the future, as announced by the Secretary of State for Wales? Will the right hon. Lady take the opportunity to put on the record what the excess generating capacity is at present and what advice she has received from the regulator? Does she accept that this is a wake-up call to her Department to get moving on energy efficiency and renewables?

Ms Hewitt: No statement has been made about the future of nuclear electricity beyond what I have said in relation to both British Energy and BNFL. For the longer term, those are matters that we will consider in the energy White Paper, which, as I have said several times today, will be published in the new year. Of course we need to do more on energy efficiency and on renewables. We are already doing a great deal—with the hon. Gentleman's support, I hope—and we shall have more to say on the subject in the White Paper.

David Hamilton (Midlothian): With regard to the security of energy supply, may I draw to my right hon. Friend's attention a concern shared by many miners throughout the country that one company, UK Coal, could change the position within the United Kingdom? It is imperative that a single company should not be allowed to determine the policy of this country.

Ms Hewitt: As I understand the position, in the eventuality that my hon. Friend describes, the coal

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resources would revert to the Coal Authority. The broader issue of the place of coal in securing a diverse and safe electricity supply will be considered in the White Paper.

Mr. Nick Gibb (Bognor Regis and Littlehampton): The answer that the Secretary of State gave to my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) and to the hon. Member for Midlothian (David Hamilton) is not good enough. The fundamental reason for the insolvency of British Energy is that the market price of electricity, low as it is and welcome as that is, is lower than the production cost of nuclear energy. In making a commitment of public money, the right hon. Lady must have a policy on future nuclear build. What is that policy? If there are to be no new nuclear power stations, how does that fit in with the Government's policy of reducing CO2 emissions?

Ms Hewitt: The question of new nuclear build has nothing whatever to do with the issue of British Energy and how it will manage its responsibility for existing nuclear stations. It seems to me that the causes of British Energy's problems are many, but a company that has constantly changed its strategy, constantly sought—but failed—to secure alliances and mergers with supply companies, gone through three chief executives in about five years and lost a deputy chairman earlier this year is a company in which there have been very serious management failings. Its problems cannot be blamed on the market environment, particularly when British Energy itself, publicly and privately, welcomed the introduction of those market arrangements.

Mr. Parmjit Dhanda (Gloucester): I thank my right hon. Friend for her support for British Energy. She may well know that its national headquarters are based in Barnwood in my constituency. Does she have a message for the people of that ward who voted Liberal Democrat when the Liberal Democrats gained the seat in May this year, bearing in mind that the Liberal Democrats would take away the £650 million loan and jeopardise more than 1,000 jobs in that ward?

Ms Hewitt: My hon. Friend makes an extremely interesting point. The Liberal Democrats in Gloucester told the voters of Barnwood in my hon. Friend's constituency that they oppose the policy of immediate administration that was proposed today by the hon. Member for Twickenham (Dr. Cable), who speaks for the Liberal Democrats on these matters. As ever, what we are seeing from the Liberal Democrats is opportunism and confusion combined.

Mr. Andrew Lansley (South Cambridgeshire): Will the Secretary of State confirm—I admit that I have made my calculations while we have been sitting here—that a minimum of two thirds of the £2.1 billion discounted cost of the historic waste liabilities of British Energy will be transferred to the taxpayer? Will she clarify the relationship with the liabilities management authority, which will get from BNFL liabilities, a fund and the management of assets? What does she propose to transfer to the LMA from British Energy?

Ms Hewitt: As I said, we anticipate that the costs of the historic nuclear liabilities for British Energy will

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average between £150 million and £200 million a year for the next 10 years, although if the situation improves British Energy will be expected to put more into the nuclear liabilities fund. We are making good progress on the legislation and practical arrangements necessary for the establishment of the liabilities management authority. We will consider whether it would be appropriate for British Energy's historic liabilities to be managed through the LMA; we have not yet made a decision about that.

Rob Marris (Wolverhampton, South-West): I applaud the Government's attempts to sort out this mess. I note that they are underwriting a rescue package, that the creditors are not going to be paid in full and that they will assume all nuclear liabilities if the company goes into administration.

Will my right hon. Friend tell the House how many nuclear reactors have been built around the world in the past 25 years without direct or indirect subsidy for building, operating or decommissioning costs?

Ms Hewitt: I do not have that figure, but I know that several countries are now commissioning new nuclear power stations in order to meet their judgment of how best to achieve their carbon reduction targets.

Mr. Mark Lazarowicz (Edinburgh, North and Leith): Given the management failings that my right hon. Friend mentioned, I welcome the fact that there are to be changes at the top of the company. Will she assure us, however, that an example will not be set whereby the people responsible for presiding over massive losses in their business walk away with massive payouts as compensation for their troubles? Will she assure us that there will be no rewards for failure on this occasion?

Ms Hewitt: I have made my views about big rewards for big corporate failures very clear on several occasions. In this situation, there are certain contractual requirements, but I would be very concerned about large remuneration payments to the former chairman. I have no doubt that he we will want to face up to his responsibility for the position in which the company

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finds itself. Large payments to the former chairman or anyone else involved would send a very damaging signal when all the other stakeholders face either considerable uncertainty, as in the case of employees, or are directly bearing a share in the pain. I hope that the former chairman will take the same view as me, which is that he should play his part in sharing that pain.

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