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27 Jan 2003 : Column 652—continued
Mark Tami: The margin of 20 to 25 per cent. has to exist. Another consideration is the position of the stations on the grid. Just switching them off would create many problems with balancing the electricity supply around the country.
Mr. Brown: My hon. Friend is right. The strategic placing of sites is important for access to lines and interconnectors. It is strange that he should raise that matter, because I was about to mention a constituency case that relates to the position on the grid. Losing eight British energy sites would have an impact. Like some in the industry, I believe that it is a nightmare scenario. To return to the point made by my hon. Friend, there is a Magnox reactor run by BNFL in Chapelcross in my constituency. I was interested to learn that not many months ago, my predecessor, a long-serving Member of Parliament who supported that site for many years, had suggested to a colleague of mine that a replacement reactor on the site may not be a good idea because it was not close enough to the marketplace. My hon. Friend therefore made an interesting and important point.
Many Members have driven home the point about people returning home in the evening and wanting power so that they can sit in a warm home and switch on the television. That is something that we all expect, and families without those luxuries desperately want them. There is therefore an even greater demand for power generation in this country. On security of supply, this time last year we had a detailed discussion with Ofgem about the Magnox station in my constituency, which centred on access to the interconnector. The power station exports everything to the interconnector and south of the border, so the regulator asked Scottish Power whether it could guarantee security of supply if it were not in operation. Eventually, after much browbeating, Scottish Power said that it could not. The site has four reactors generating 196 MW, so security of supply is clearly important.
The potential for power reductions and what are known as "brown-outs" had been identified by others, which is why that information was fed to the regulator. However, it is not just household supply and domestic use that would be affected, but industry as well. We must consider how the industrial sector would be damaged if, as colleagues in the House have suggested, there was an early run-down and we did not support British Energy in the Bill. If restructuring of the company proves successful, the Government must ensure that they deliver their part of the deal, as financial assistance will be needed for nuclear liabilities. If restructuring goes wrong and British Energy goes into administration, the Government must be sure that they can acquire the power station business by acquiring the company or its assets directly, assuming that no third party wants to do so.
Mr. Michael Weir (Angus): Will the hon. Gentleman clarify that point? The Bill obviously gives the Government the ability to acquire British Energy in those circumstances, but what would happen if it did not
complete its passage through Parliament and British Energy was unable to continue? Would the company automatically revert to the Government in any event?
Mr. Brown: I am pleased that a member of the Scottish National party has turned up, but I expected the SNP to be here earlier. The hon. Gentleman assumes that the Bill will not go through.
Mr. Weir: That is another question.
Mr. Brown: The hon. Gentleman made that assumption. I am not about to assume that the Bill will not go through, because it clearly will.
I asked the Opposition spokesman about a third party, but I am not convinced that a creature of that ilk exists. So we have a difficulty, which the Government and the Department of Trade and Industry have identified.
We are duty bound—my hon. Friend the Member for East Lothian raised this point, too—to consider those who work in the sector. We must not write off people; we are talking about highly skilled work forces. The hon. Member for Twickenham (Dr. Cable) mentioned the figure of £5 billion and gave a breakdown of possible costs—£2 million 150 years from now, £2 million in 50 years' time and perhaps £1 billion now.
A moral duty lies behind all that. This is not a game of figures and what we must do in 50 or 150 years from now. I know that only too well because we are already preparing for the closure of the Magnox site in my constituency that will take us into the next 15 or 20 years. BNFL has identified the liabilities and how the matter must be dealt with in the communities affected. My hon. Friend the Minister said in his opening remarks that we cannot simply switch off reactors and make moves toward de-fuelling—there is a cost attached to that. The economics show clearly that it makes sense to run the businesses and to utilise precious assets.
Clauses 3 and 4 of this narrow, enabling Bill amend schedule 12 of the Electricity Act 1989. The proposed removal of the financial ceiling has allowed restructuring to go ahead. If the current ceiling is strictly interpreted, it could block the Government's delivery of their part of the deal, because we must guarantee British Energy's liabilities. The ceiling also makes no provision for inflation and does not reflect the industry's standard practice of discounting large sums in the distant future.
The changing of the tax status of grants under schedule 12 is important: it will ensure that the Government can deliver their part of the restructuring plan without incurring a massive tax liability. That is why the Minister referred to giving with one hand but not taking away with the other.
As my hon. Friend the Member for Ochil (Mr. O'Neill) said, this is a small Bill. It is pragmatic, but it will go a long way to assisting in the future.
9.7 pm
David Hamilton (Midlothian): It was not my intention to speak in this debate, but there have been several speeches on which I should like to reflect. My hon.
Friend the Member for Dumfries (Mr. Brown) talked about people on the left queueing up to participate in this debate. Obviously, I am not on the left, although I remember demonstrating against the opening of Torness power station in the constituency next to mine. I must always remember that Tony Benn signed the paper allowing nuclear power to start.One important issue is the security of Britain's long-term interests. Two or three colleagues have commented on the work force and it is important that I start with that point. We should remember that the work force will be very concerned at the moment. As someone who came from the coalmining industry, I understand that concern. We have all been listening to this debate intently. The work force will be looking to their future security.
I am concerned that the ex-chairman of the company has walked away with a golden handshake and with a pension that many pensioners would be extremely pleased to enjoy. That matter needs to be investigated. We need to look at some of today's chairmen and the deals that they get when they go.
It has been said that some 22 per cent. of fuel is generated by nuclear power. In Scotland, the figure is 50 per cent. I understand that the White Paper will be published in February or March and I look forward to the debate on it because the diversity of Britain's requirements is key. Whether we like it or not, we all have to play the game, but I am not a supporter of nuclear power. I have opposed it and nuclear weapons all my life. However, that is not the issue. We have many nuclear reactors throughout the country, and there is no question of closing them down. They should be allowed to come to the end of their natural life. In the long term, as the hon. Member for Twickenham (Dr. Cable) said, we should look at reinvesting in other renewables and in clean coal. What concerns me is that the money that has to be spent to bail out nuclear power could have been used in other ways, and can be in future.
My hon. Friend the Member for South Thanet (Dr. Ladyman) said that the accident rate in the nuclear power industry was very small—one per year, I think he said—but all it would take is one major disaster at a nuclear power station to make that figure seem infinitesimal. Let me give an example. When I served on a council, we looked at the question of energy requirements and what would happen if a disaster occurred in the neighbouring county. Edinburgh would be taken out, Midlothian would be taken out, East Lothian would be taken out and Fife would be taken out. There would not be a firth of Forth; there would be a sea. That is what you have to think about as you listen to the debate.
Dr. Ladyman: The 11,300 people killed in the conventional power industry whom I mentioned earlier did not include the 8 million people whom the United Nations believes will die as a result of burning carbon over the next 10 years.
David Hamilton: That is why we need green coal—[Laughter.]—and long-term investment in other options. Conservative Members talk about privatisation of the industry, and then cry over spilled milk because the shareholdings have gone pear-shaped, and reject the
criticisms that we make. Investment in health and safety is for the long term. You talk in terms of historical significance. I am too young to remember, but you may remember the smog in London and the 4,000 people who died. We moved away from that by introducing clean air Acts. Europe is moving towards that, which I welcome. With new technology, we can consider renewables and other options. Wind and wave power may sound ludicrous, but such energy sources must be developed.When we speak about security, let us think about what is happening in Iraq. Is it not all about oil? That is security, and in Britain we have to act.
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