Energy Bill [HL]

House of Commons

Session 2003 - 04
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Energy Bill [HL]

Energy Bill [HL]
Part 2 — The Civil Nuclear Industry
Chapter 2 — Transfers relating to nuclear undertakings
39

(3)
The property, rights and liabilities that may be transferred are—
(a)
securities of a nuclear company that is not publicly owned;
(b)
property and rights of such a company in or in relation to a nuclear site
or an installation in or on such a site; or
(c)
property, rights and liabilities to which such a company is entitled or
5
subject—
(i)
in respect of such a site or installation;
(ii)
in connection with or by reference to activities carried on in or
on such a site or installation; or
(iii)
for purposes connected with that site or installation or with any
10
such activities.
(4)
In subsection (3) references to the property, rights and liabilities of a company,
or to which a company is entitled or subject, include references to the property,
rights and liabilities of any of its wholly-owned subsidiaries.
44
Recovery of property from private ownership
15
(1)
This section applies in the case of a nuclear company (“the transferred
company”) all the shares in which were transferred for the purposes of a
management contract to the contractor or to a subsidiary of the contractor
where—
(a)
the contractor is in breach of that contract; or
20
(b)
that contract has come to an end, whether by the expiry of the period
for which it was in force or otherwise.
(2)
A nuclear transfer scheme may provide for the transfer to—
(a)
a publicly owned company,
(b)
the NDA, or
25
(c)
a consenting contractor,

of the property, rights and liabilities falling within subsection (3) that are set
out in the scheme.
(3)
The property, rights and liabilities that may be transferred are—
(a)
securities of the transferred company (whether transferred as
30
mentioned in subsection (1) or issued afterwards);
(b)
property, rights and liabilities to which the transferred company was
entitled or subject immediately before the transfer so mentioned;
(c)
property, rights and liabilities transferred for the purposes of the
management contract, to the contractor, to a subsidiary of the
35
contractor or to the transferred company or a wholly-owned subsidiary
of the transferred company;
(d)
property, rights and liabilities to which the transferred company or a
wholly-owned subsidiary of the transferred company first became
entitled or subject while that contract was in force.
40
(4)
Subsection (3) does not apply to property, rights or liabilities to the extent that
they have been excluded from that subsection by—
(a)
provision contained in an agreement between the NDA and the person
entitled to or subject to them; or
(b)
provision contained in a nuclear transfer scheme by virtue of which the
45
property, rights and liabilities or the shares mentioned in subsection (1)
were vested in any person.

Energy Bill [HL]
Part 2 — The Civil Nuclear Industry
Chapter 2 — Transfers relating to nuclear undertakings
40

(5)
A transfer is authorised by this section notwithstanding that what is
transferred has ceased, before the transfer, to be the property or a right or
liability—
(a)
of a person to whom anything was transferred for the purposes of the
management contract mentioned in subsection (1);
5
(b)
of the transferred company or of a wholly-owned subsidiary of that
company; or
(c)
in the case of securities issued after the transfer mentioned in that
subsection, of the person to whom they were issued.
(6)
Nothing in this section authorises the transfer of property, rights or liabilities
10
from a company at a time when it is publicly owned.
(7)
For the purposes of this section a person is a consenting contractor, in relation
to a nuclear transfer scheme, if—
(a)
he is a contractor under a management contract other than the one that
has been broken or come to an end; and
15
(b)
he has consented to the provisions of the scheme so far as they relate to
him.
(8)
In this section—

“contractor”, in relation to a management contract, means a party to the
contract who is not the NDA;
20

“management contract” means a contract between the NDA and another
person under which the other person is required to do or secure
anything that the NDA is required to secure for the purpose of
discharging its responsibilities; and

“transferred”, in relation to shares, property, rights or liabilities, means
25
transferred in accordance with a nuclear transfer scheme.
45
Transfer of Nuclear Liabilities Investment Portfolio
(1)
A nuclear transfer scheme may provide for the transfer from BNFL to the
Secretary of State of—
(a)
the Nuclear Liabilities Investment Portfolio; or
30
(b)
so much of that Portfolio as may be specified in the scheme.
(2)
Nothing in this section authorises a transfer at a time when BNFL is no longer
publicly owned.
(3)
Where cash is transferred to the Secretary of State by a transfer authorised by
this section, he must pay it into the Consolidated Fund.
35
(4)
Where the Secretary of State receives—
(a)
sums by way of income on property or rights transferred to him by a
transfer authorised by this section, or
(b)
sums in respect of the disposal of any such property or rights,

he must pay those sums into the Consolidated Fund.
40
(5)
The Secretary of State must comply with every direction given to him by the
Treasury with respect to—
(a)
the disposal of property or rights transferred to him by a transfer
authorised by this section; or
(b)
the exercise of any other right attached to, or arising in respect of, such
45
property;

Energy Bill [HL]
Part 2 — The Civil Nuclear Industry
Chapter 2 — Transfers relating to nuclear undertakings
41


and (in a case where there is no applicable direction) the Secretary of State must
not dispose of or exercise any property or rights with respect to which he may
be given a direction except with the consent of the Treasury.
(6)
In this section “the Nuclear Liabilities Investment Portfolio” means property
and rights to which BNFL is entitled and which appear to the Secretary of State,
5
from BNFL’s published accounts, to represent assets held by BNFL for the
purpose of being able to meet costs or liabilities for which the NDA has a
financial responsibility under Chapter 1 of this Part.
Extinguishment of undertakings and tax losses
46
Undertakings given by the Secretary of State
10
(1)
This section applies where—
(a)
the Secretary of State has given an undertaking to a publicly owned
company to make payments to that company or a subsidiary of that
company; and
(b)
it appears to him that (apart from section 24(8)) the financial
15
responsibilities of the NDA under Chapter 1 of this Part would make it
unnecessary for those amounts to be paid.
(2)
The Secretary of State may extinguish the undertaking, and every liability of
his that has arisen under the undertaking, with effect from such date as he may
notify to the other parties to it.
20
(3)
Nothing in this section authorises the extinguishment of an undertaking at a
time when the company to whom payments would fall to be made under the
undertaking is not publicly owned.
(4)
The extinguishment of an undertaking under this section shall neither require
nor enable any sum to be brought into account in any person’s case for the
25
purposes of corporation tax.
(5)
In this section “undertaking” includes any agreement in which an undertaking
to make payments is contained.
47
Extinguishment of BNFL losses for tax purposes
(1)
In relation to accounting periods beginning on or after the trigger date, all the
30
relevant losses of every BNFL company arising before that date shall be treated
for the purposes of corporation tax as extinguished.
(2)
The following are relevant losses of a BNFL company for the purposes of this
section—
(a)
losses incurred by the company in a trade;
35
(b)
losses incurred by the company in a transaction a profit or gain from
which would have been chargeable to tax under Case VI of Schedule D;
(c)
excesses to be carried forward in the company’s case under section
75(3) of the Income and Corporation Taxes Act 1988 (c. 1);
(d)
Schedule A losses (within the meaning of section 392A of that Act)
40
incurred by the company;
(e)
losses to be carried forward in the company’s case under section
392B(1) of that Act;
(f)
any tax loss of the company falling within section 400(2)(d) of that Act;

Energy Bill [HL]
Part 2 — The Civil Nuclear Industry
Chapter 2 — Transfers relating to nuclear undertakings
42

(g)
allowable losses (within the meaning of section 8 of the Taxation of
Chargeable Gains Act 1992 (c. 12)) that have accrued to the company;
(h)
deficits of the kind mentioned in subsection (1) of section 83 of the
Finance Act 1996 (c. 8) to the extent that they are to be carried forward
in the company’s case under subsection (3A) of that section;
5
(i)
excesses of the kind mentioned in section 260 of the Capital Allowances
Act 2001 (c. 2) in relation to the company;
(j)
losses of the kind mentioned in paragraph 35(1) of Schedule 29 to the
Finance Act 2002 (c. 23) incurred by the company;
(k)
unrelieved surplus advance corporation tax of the company (within the
10
meaning of section 32 of the Finance Act 1998 (c. 36)).
(3)
This section applies to the relevant losses of a BNFL company only if it is
publicly owned on the day before the trigger date.
(4)
In this section—

“BNFL company” means—
15
(a)
BNFL;
(b)
a company that is a 75 per cent subsidiary of BNFL at a time
during the qualifying period; or
(c)
a company (other than BNFL) that is a 75 per cent subsidiary of
a BNFL parent company at a time during the qualifying period;
20

“BNFL parent company” means a company of which BNFL is a 75 per cent
subsidiary;

“qualifying period” means the period beginning with 16th March 2004
and ending with the trigger date;

“trigger date” means whichever is the earlier of the following—
25
(a)
the date of the first occasion on which section 24 operates so as
to confer financial responsibilities on the NDA in relation to an
installation, site or facility the person with control of which is a
BNFL company that is publicly owned; and
(b)
the date of the first occasion on which a transfer takes effect
30
which is a transfer to the NDA or a subsidiary of the NDA in
accordance with a nuclear transfer scheme authorised by
section 42 of property, rights or liabilities of a BNFL company.
(5)
This section shall be construed as one with the Corporation Tax Acts.
Provisions relating to transfers
35
48
Further provision applying to transferee companies
(1)
Schedule 7 (which makes provision about the finances and accounts of publicly
controlled companies to which property, rights and liabilities are transferred)
has effect.
(2)
In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
40
(c. 24) (other disqualifying offices), insert (at the appropriate place)—

“Director of a publicly controlled company (within the meaning of
Chapter 2 of Part 2 of the Energy Act 2004) to which transfers have
been made in accordance with provisions of nuclear transfer
schemes authorised by that Chapter.”;
45

Energy Bill [HL]
Part 2 — The Civil Nuclear Industry
Chapter 2 — Transfers relating to nuclear undertakings
43


and the corresponding amendment shall also be made in Part 3 of Schedule 1
to the Northern Ireland Assembly Disqualification Act 1975 (c. 25).
49
Pensions
Schedule 8 (which makes provision about pensions in connection with
transfers affecting nuclear undertakings) has effect.
5
50
Taxation
Schedule 9 (which makes taxation provision in relation to nuclear transfer
schemes) has effect.
51
Supplementary powers of the Secretary of State, the NDA and the UKAEA
(1)
The Secretary of State shall have power to enter into agreements for the
10
purpose of accepting or imposing such contractual obligations as he thinks fit
with respect to—
(a)
nuclear transfer schemes and proposals for such schemes;
(b)
anything connected with such a scheme or proposal; or
(c)
the exercise of powers conferred on the Secretary of State or any other
15
person by or under this Chapter.
(2)
The NDA and the UKAEA shall each have power to enter into agreements for
the purpose of accepting or imposing such contractual obligations as it or they
think fit with respect to—
(a)
nuclear transfer schemes and proposals for such schemes;
20
(b)
anything connected with such a scheme or proposal; or
(c)
the exercise of powers conferred on it or them, or any other person, by
or under this Chapter.
(3)
The NDA and the UKAEA shall also each have power to do anything else
which, in its or their opinion, is appropriate for facilitating—
25
(a)
a transfer which is or is proposed to be effected in accordance with a
nuclear transfer scheme; or
(b)
any other transfer of property, rights or liabilities of the NDA or (as the
case may be) the UKAEA which is or is proposed to be effected for
purposes connected with the carrying out by any person of any
30
functions conferred on that person by or under this Part.
(4)
Agreements entered into in exercise of the powers conferred by subsection (1)
or (2) may, in particular, include provision for the making of payments
(whether by way of consideration or otherwise)—
(a)
to the Secretary of State, or
35
(b)
to the NDA or the UKAEA,

in respect of anything transferred or created in accordance with a nuclear
transfer scheme.
(5)
The consent of the Treasury is required for the Secretary of State or the UKAEA
to enter into an agreement in exercise of those powers.
40
(6)
The consent of the Secretary of State is also required for the UKAEA to enter
into an agreement in exercise of those powers.
(7)
Before making any disposal of securities of a company in a case in which—

Energy Bill [HL]
Part 2 — The Civil Nuclear Industry
Chapter 2 — Transfers relating to nuclear undertakings
44

(a)
the disposal is made in accordance with arrangements entered into by
the UKAEA for purposes connected with the carrying out of its
functions by the NDA,
(b)
those arrangements are not arrangements to which the Secretary of
State has consented under subsection (6), and
5
(c)
in the opinion of the UKAEA, the disposal is one which they would not
have power to make but for section 1(2) of the Atomic Energy
(Miscellaneous Provisions) Act 1981 (c. 48) (disposal otherwise
inconsistent with UKAEA functions),

the UKAEA must consult the Secretary of State.
10
(8)
Subsection (4) of section 1 of the Atomic Energy (Miscellaneous Provisions) Act
1981 (which limits the cases in which the UKAEA may make share disposals
that are inconsistent with its functions) shall not apply—
(a)
to anything done by the UKAEA in exercise of powers conferred on
them by or under this Chapter; or
15
(b)
to any disposal of securities in accordance with arrangements entered
into by the UKAEA for purposes connected with the carrying out of its
functions by the NDA.
(9)
Sums received by the Secretary of State in pursuance of an agreement under
this section must be paid into the Consolidated Fund.
20
(10)
The powers conferred on the Secretary of State, the NDA and the UKAEA by
this section—
(a)
are in addition to their powers apart from this section; and
(b)
are to be disregarded in determining the extent of those powers.
Supplementary provisions of Chapter 2 of Part 2
25
52
Duty to assist the Secretary of State
(1)
This section applies where the Secretary of State proposes to make a nuclear
transfer scheme.
(2)
The transferor shall have the duty, within such period as the Secretary of State
may allow—
30
(a)
to provide the Secretary of State, and
(b)
to secure, so far as practicable, that its subsidiaries provide the
Secretary of State,

with all such information and other assistance as the Secretary of State may
require for the purposes of, or in connection with, the making of the scheme.
35
(3)
The duties of the transferor under this section are duties owed to the Secretary
of State.
(4)
Those duties are to be enforceable by the Secretary of State in civil
proceedings—
(a)
for an injunction;
40
(b)
for specific performance of a statutory duty under section 45 of the
Court of Session Act 1988 (c. 36); or
(c)
for any other appropriate remedy or relief.

Energy Bill [HL]
Part 2 — The Civil Nuclear Industry
Chapter 3 — Civil Nuclear Constabulary
45

(5)
In this section “the transferor”, in relation to a nuclear transfer scheme, means
a person from whom it is proposed that property, rights or liabilities are
transferred by the scheme.
53
Interpretation of Chapter 2 of Part 2
(1)
In this Chapter —
5

“nuclear company” means a body corporate with control of a designated
installation, designated site or designated facility;

“publicly controlled” is to be construed in accordance with subsection (3).
(2)
Expressions used in this Chapter and in Chapter 1 of this Part have the same
meanings in this Chapter as in that Chapter.
10
(3)
For the purposes of this Chapter a body corporate is a publicly controlled
company if it is a company limited by shares that is either publicly owned or is
otherwise a company in which—
(a)
a person specified in subsection (4) holds a majority of the voting rights;
or
15
(b)
two or more persons so specified, taken together, hold a majority of the
voting rights.
(4)
The persons mentioned in subsection (3) are—
(a)
the Treasury;
(b)
a Minister of the Crown;
20
(c)
the NDA;
(d)
the UKAEA;
(e)
a publicly owned company; or
(f)
a nominee of a person falling within paragraphs (a) to (e).
(5)
In this section “company” has the same meaning as in the Companies Act 1985
25
(c. 6).
Chapter 3
Civil Nuclear Constabulary
Civil Nuclear Police Authority
54
The Civil Nuclear Police Authority
30
(1)
There shall be a body corporate to be known as the Civil Nuclear Police
Authority (“the Police Authority”).
(2)
Schedule 10 (which makes further provision about the Police Authority) has
effect.