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27 Jan 2003 : Column 642—continued
Anne Picking (East Lothian): It will come as no surprise to the House to hear that I support the Bill. It is a bit rich that the Government are being left to sort out another Tory privatisation disaster. Yet again, a major utility is under threat because the Tories allowed political dogma to drive an energy privatisation agenda rather than doing what was in the national interest. It is time to sort out that sorry saga.
A secure, stable and safe electricity supply is fundamental to our country's future. That can be achieved only through a diverse and balanced energy sector. My constituency has a diversity of energy supply to be proud of, including wind farms, coal and nuclear power. We should all avoid promoting our favourite causes and think of the big picture—a long-term, sustainable energy policy.
This is no time for woolly thinking. The Government have set realistic, ambitious targets to work towards renewable and reliable sources of electricity, but renewable energy, combined with hydro, meets only 2.8 per cent. of our energy needs. Nuclear power produces 50 per cent. of those needs in Scotland, and 21 per cent. of national need.
Mr. Clapham: My hon. Friend seems to be saying that there is a need for nuclear energy to complement and support renewable energy. However, nuclear energy provides the dearest electricity on the wires. The one industry in which we should invest in order to support renewables is the coal industry. Does she agree that we need investment in clean coal technology?
Anne Picking: I thank my hon. Friend for that, and I entirely agree. I do not know whether he knows my background, but I am a relative of Abe Moffat, well known in the mining industry, so I come from what we call "guid stock".
We should not forget that nuclear energy produces vital supplies of electricity and helps us to meet environmental obligations by being carbon-free. When I hear ludicrous statements from hon. Members calling on the Government simply to shut nuclear power stations, I find them quite irresponsible. Apart from anything else, it would cost us much more to shut them than it would to keep them open.
Mr. Russell Brown : My hon. Friend knows, if anyone does, the difficulties that British Energy has had at Torness power station in her own constituency. Has she had any indication of what the cost would be of early closure?
Anne Picking: I thank my hon. Friend for that intervention, but I cannot pluck a figure from the sky. We are talking megabucks. I shall get back to my hon. Friend when I find out.
We have to do away with any pie-in-the-sky notion that wind and sea power are ready to replace nuclear power. It simply is not so. That notion simply does not bear scrutiny.
There must, then, be a future for nuclear. The debate has been very good on many levels, but I am a little disappointed that not enough hon. Members have paid tribute to the staff who work in the nuclear industry.
Those staff have been the backbone of British Energy. I take this opportunity to commend those highly trained and motivated workers, who fully deserve our support. They—not the shareholders or bondholders who thought that they had a well to drink dry—have invested most in the industry. The workers, such as the 450 at Torness, have sacrificed the most in trying to save the company.
Brian White: Does my hon. Friend agree that if the management of British Energy had consulted the work force, it might not have made all the mistakes that it did in its strategic decisions?
As well as the workers, I commend the trade union representatives who tried hard to consult with British Energy's management and to represent effectively the interests of their members. It is the workers who are reorganising and retraining. They have been doing all that they can—including shedding jobs—to make British Energy pay. Meanwhile, dividends have been paid to shareholders. We should ignore any morality calls from them about being paid compensation.
Security of supply is not a luxury but a matter of life and death for many of our citizens. Electricity is also the life-blood of our future prosperity, affecting every one of our constituents. We quite rightly expect that when we flick a switch, the light comes on. At North Berwick high school's end-of-term Christmas dance for the older pupils, the boys put on their kilts and the girls their fancy frocks only to have the dance abandoned because of a power failure. In the scheme of things, that is not a big deal, but it was a major disappointment to those pupils.
In essence, I support any action necessary to secure the future of the nuclear industry, including outright nationalisation if it proves necessary.
8.24 pm
Mr. Tom Watson (West Bromwich, East): This has been an insightful debate and, for much of the afternoon, the Chamber has looked like the Standing Committee of the Communications Bill in exile. Many members of that Committee have displayed their customary depth of analysis today, as they do day in, day out in that rather laborious Committee on that clause-ridden Bill.
Most speakers have congratulated the Government on making the necessary provisions to guarantee that the country's energy supply is in good hands in the unfortunate event of British Energy failing to secure agreement on its restructuring. The hon. Member for Ceredigion (Mr. Thomas) was a bit harsh on my hon. Friend the Minister when he said that security of supply had been blown out of the water as a motive for the Bill. It is important that management failures are not allowed to undermine the ability of households and businesses up and down the country to know with certainty that the lights will stay on and workers to know that they have a secure future.
This is a pragmatic Bill that takes a pragmatic approach, a stark contrast to the dogmatic approach that led the last Conservative Government into a rash, ill-informed and, as we can see now, unsuccessful
privatisation; one that most City commentators at the time, and nearly all City commentators now, agree was perhaps an ideological step too far.The Bill is not about turning back the clock; it is about being prepared for any eventuality. If British Energy can secure agreement for the restructuring proposal from its bondholders and creditors—I hope that it can—the Bill will be unnecessary. British Energy will be able to continue as an ongoing concern, generating electricity rather than column inches and debates in the Chamber.
I understand that real progress is being made in bringing bondholders and creditors together to reach an agreement on the restructuring. The detailed information that bondholders have required from the company has only been available since just before Christmas. It is understandable that those involved have been racing to reach an agreement and we must pay credit to them, as they are genuinely trying to reach agreement by the deadline of 14 February. I am not opposed to that but, in that eventuality, I hope that Adrian Montague, the company's new chairman, and the major investors will look to reorder and strengthen the clearly tainted British Energy management.
My hon. Friend the Member for East Lothian (Anne Picking) mentioned the hard work of the 5,000 workers in British Energy, and there is no doubt that their morale has been sapped over the last 12 months by the uncertainty that they all face. It is essential that we put pressure on the company to bolster its management, because the previous management was, at best, incomplete in its dealings with stakeholders and, at worst, simply misleading.
If British Energy cannot secure the agreement, it is absolutely right that the Bill will allow the Government to incur expenditure through a range of measures to ensure a "smoother path through administration." Let us not forget that the company does not have to nestle in the public sector for long. The provision of loans or grants may allow for the possibility of a new ownership structure to evolve. In that event, I hope that stakeholders look to recent successful not-for-profit models, as it need not be a wholly public sector solution.
When I talk about not-for-profit models, I am talking about Welsh Water, Britain's fourth-biggest water company. It is a good model to look at; it provides an essential public service, delivered in the private sector by a company without shareholders. Instead, bondholders fund the company. It makes a profit, but that profit is reinvested in the business, in training staff and in lowering bills for customers. I say to my hon. Friend the Minister that if things go wrong for British Energy, that would not be a bad model for the Government to look at.
Mr. Russell Brown: I am intrigued by what my hon. Friend is saying, but I am slightly confused. Could he elaborate on the point that he is making?
Mr. Watson: Indeed. Having dealt with failed Tory privatisations, the Government have learned that we do not have to have wholly public or wholly private organisations. The Network Rail model is one we can look to.
I say to my hon. Friend the Minister that if it were down to the work force—those 5,000 employees we have mentioned—and their normally moderate unions,
they would demand that the Government take control of the company today because they have faced such uncertainty for the past six months.For too many years, the work force also faced uncertainty on safety. After the damning report on operating safety at British Energy issued by the World Association of Nuclear Operators two years ago, I understand that the management briefing notes that accompany presentations to safety representatives at BE are considered too embarrassing to share with the trade unions. Can my hon. Friend the Minister urge the new chairman of the company to release that important safety information to union representatives?
The question to which employees and consumers most want an answer from my hon. Friend the Minister is: how did we get into this situation? The answer is easy: first, Tory dogma and, secondly, constant mismanagement at the highest levels of British Energy. Hon. Members have laboured that point but it is worth remembering, as Parliament, once again, debates a failed privatisation, which is, like Railtrack, a privatisation that Labour Members warned against at its inception.
We are looking for new models. As has been said elsewhere, it is no coincidence that these problems surfaced in the two companies that were the last to be taken to the market during the final, frantic, befuddled death throes of the previous Conservative Government. In effect, the British Energy privatisation amounted to a massive gift from the taxpayer to the private sector—
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