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Westminster Hall

Thursday 19 April 2007

[Frank Cook in the Chair]

Nuclear Industry

[Relevant documents: Fourth Report from the Trade and Industry Committee Session 2005-6 HC1122 and the Government’s response thereto, HC1663.]

Motion made and question proposed, That the sitting be now adjourned.—[Tony Cunningham.]

2.30 pm

Peter Luff (Mid-Worcestershire) (Con): The Trade and Industry Committee produced its fourth report of the 2005-06 Session, “New nuclear? Examining the Issues” on 10 July 2006, the day before the Government published the conclusions of their energy review consultation, “The Energy Challenge”. I express my gratitude to the Committee’s staff, especially Rob Cope, the Committee’s then very new specialist, and to the whole Committee for its extraordinary efforts in getting the report published before the Government brought forward their statement on the energy review. Meeting the deadline was a considerable challenge to the Committee and I am grateful to everyone involved for the parts that they played.

Before I turn to the substance of the debate, I make two parliamentary points. First, I am sorry that the House has not had proper notice of the debate, and I attach considerable importance to that. For reasons that I do not understand, the Leader of the House failed to mention forthcoming Westminster Hall debates in his business statement on the Thursday before the recess, which meant that the Table Office and House authorities were not aware of the subject of this debate. When I returned to the House after Easter on Monday, I was alarmed to find that today’s subject was still not on the Order Paper. I went to the Table Office, which was, as always, very obliging and helpful. It did some research and found that this debate was to go ahead and the information appeared on the Order Paper for the first time on Tuesday of this week. This is an exceptionally important subject for the country and for many Members of Parliament, who will be sorry that they did not know about the debate. I am sorry to see a relatively small number of my colleagues here, but no blame attaches to them because they did not know that the debate was happening—that goes for my colleagues on both sides of the House and on both sides of the argument.

Secondly, and perhaps more flippantly, I am delighted to see the former Energy Minister in his place to reply to the debate. He was an excellent Energy Minister by any standards, and I have considerable personal regard for him. However, it worries me that the Minister routinely responsible for energy policy is not in this place but in another place, because it puts a considerable burden on the Minister for Science and Innovation when the Secretary of State for Trade and Industry is not available to answer debates and questions. Given the huge importance of energy policy
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to the future of the country, it would be better to have a Minister for Energy answerable regularly to the House of Commons as we used to have before the ennoblement of the current Minister.

I feel for the Minister for Science and Innovation—he has many ancillary responsibilities, such as that for skills, on top of his science duties, as I found when he came before my committee recently. Perhaps we ought to tag him to give us an idea of the extra responsibilities he undertakes on top of those to do with the science and innovation. That way, we could see where he is when not doing the job he is described as doing in the directory of ministerial responsibilities.

The Minister for Science and Innovation (Malcolm Wicks): The hon. Gentleman is doing well.

Peter Luff: I am grateful for that admiration; the feeling is mutual.

The Trade and Industry Committee decided to look at three major aspects of the Government’s review of energy policy: nuclear power; local energy, as we call it; and the security of our gas and coal supplies. The report was the first of three, but it was also the most difficult. The debate about nuclear power raises considerable passions. I decided that the Committee could not reach a decision on whether, in Sellar and Yeatman terminology, nuclear power was a good or a bad thing. However, the Committee could inform debates on the subject in the House by looking dispassionately at the issues and reaching definitive judgments on as many of them as possible. Its approach was similar to that adopted by the Defence Committee during the recent consideration of the decision on the replacement of the Trident nuclear deterrent. By way of a tribute to the co-operative spirit of the Trade and Industry Committee, I am delighted that it was able to produce a unanimous report. Irrespective of their long-held views, members of the Committee engaged objectively and dispassionately with the evidence, which is what Select Committees should do.

There is one negative conclusion that I should emphasise at the beginning of my remarks: nuclear power is a low-carbon technology. Some campaign groups and, indeed, some hon. Members, argue that, taking full account of construction and decommissioning and the extraction and processing of uranium, the carbon cost of nuclear power is much higher than the industry claims. It is true that nuclear power is not zero-carbon. No energy source of which I am aware is. It is low carbon, just as renewable energy is only low, not zero-carbon. Renewable energy also has carbon costs associated with construction and distribution. However, if we take full account of all stages of the plant’s life cycle, in carbon terms, nuclear is every bit as good as renewable energy in respect of carbon emissions. My Committee agreed unanimously that the often heard argument against nuclear power should not be used.

Michael Connarty (Linlithgow and East Falkirk) (Lab): I presume that, during its inquiries, the Committee looked at the report of the Parliamentary Office of Science and Technology on the lifetime carbon footprint
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of all sources of electricity generation. In fact, nuclear—using uranium—is the lowest lifetime carbon footprint of all the generators.

Peter Luff: I am reluctant to overstate my case, but that is indeed what most of the evidence suggests—a point endorsed by Sir Jonathon Porritt when he came before the Committee. That very important canard about nuclear power needs to be laid to rest, and I am grateful for that helpful intervention.

We described three issues in relation to nuclear power as broadly ethical and requiring political judgment, which a simple appeal to science cannot definitively resolve. First, should we be creating new nuclear waste that future generations will have to care for? Secondly, does a pro-nuclear policy undermine the Government’s attempts to stop nuclear proliferation such as in the case of Iran? Thirdly, should the United Kingdom be showing leadership in the fight to reduce carbon emissions at any cost when, at global level, our contribution can be at best marginal? Hon. Members will have different views on such issues. It is arguable that the original energy review failed to address them in sufficient depth.

We know, for example, that new nuclear build will add only about 10 per cent. to the existing volume of nuclear waste. The other 90 per cent. is there and has to be dealt with already, although there is debate about the level of the radioactive waste and whether it makes it more expensive to deal with. The industry says that it does not, while others have a different view. The Committee felt that a decision against nuclear power would also be unlikely to prevent the wider proliferation of nuclear technology, so long as other developed countries continue to pursue a pro-nuclear stance and the United Kingdom remains a nuclear military power, which, since the report, the House has voted that it should. The House must reach a decision on the carbon issue and to what extent we need to set an example to the wider world.

Another issue often raised is the security of nuclear installations. Modern nuclear reactors are designed to stringent standards, primarily to protect them from acts of God, such as earthquakes, tsunamis and tornadoes. Whatever happens to climate change, the clemency of the British weather militates against the need to protect against those particular risks. However, it worth noting that the third generation reactors that would form part of a renewal programme in the United Kingdom do not have specific anti-terrorism measures——something that they should have. The evidence that the Committee received suggested that existing measures such as concrete shields and automatic shutdown mechanisms were sufficient to prevent radioactive discharge as a result of any foreseeable terrorist attack. The Committee believes that such an issue should not concern the House.

Mr. Tobias Ellwood (Bournemouth, East) (Con): I commend my hon. Friend on his leadership of the Committee and on its report. Has the Committee considered how long it would take to build a new batch of nuclear power stations? I understand that nuclear fusion would be workable in my lifetime——and, I hope,
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in that of my hon. Friend. The report did not cover that, but it is significant because it is important for the public to know that we will really need to build only one generation of nuclear power stations. Beyond that, I hope that nuclear fusion would have been developed to the stage when it can replace nuclear fission.

Peter Luff: I am most grateful to my hon. Friend for his intervention. Although not the subject of the debate, a different report on the work of the Nuclear Decommissioning Authority and the United Kingdom Atomic Energy Authority deals with nuclear fusion. The Committee is enthusiastic about the prospects for nuclear fusion, but like so many things, it remains about 15 years away. The evidence is that we are getting closer to plausible, commercially realisable nuclear fusion, and we are encouraging the Government to continue to support our international efforts, which are moving from Culham to the ITER——international thermonuclear experimental reactor——facility in the South of France.

I agree with my hon. Friend that there are other technologies, such as locally distributed energy generation, which may in 30 or 40 years’ time produce alternative sources of power. As new technologies come along, we may find that this is the last time that we need to renew the old fashioned large-scale power plants. I entirely agree with what he said.

On security, the Office for Civil Nuclear Security expressed some concern about its ability to provide clearances for the likely influx of workers from other jurisdictions arising from a new build programme. We also heard about the traditional concerns—the transport by train of nuclear fuels and waste around the country. However, we were reassured on those points. Overall, the Committee felt that the security issue came down to the extent to which future nuclear power stations presented an additional risk over and above that which already exists in current nuclear installations. We did not believe that the risk would be significant.

Turning to the positive things, there are four key principles for nuclear policy. In our inquiry, we received evidence from many different groups. Four issues above all stood out. There was consensus on the primacy of those issues across the waterfront, from electricity generators, regulators, academics and non-governmental organisations. I will go through them one by one.

The first, if we are to renew the nuclear power stations, is the need for a broad national consensus on the role of nuclear power that has both cross-party political support and wider public backing. The energy review’s conclusion in favour of nuclear power was widely foreseen following the Prime Minister’s speech to the CBI in May 2006 in which he said that increasing dependence on gas imports

That helped foster a high degree of cynicism about the energy review itself. Sir Jonathon Porritt told the Committee that

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The Committee also concluded that the decision-making process was taking place too rapidly, before adequate consideration of the available evidence. That view was upheld in court earlier this year, following a case brought by Greenpeace, in which the judge concluded that the consultation process had been “misleading”, “seriously flawed” and “procedurally unfair”.

In response, the Prime Minister said that it would not affect the policy at all. However, the Government have rightly committed themselves to holding another consultation on nuclear energy, which has delayed the energy White Paper to May.

Overall, evidence to date suggests that there has been little opportunity for politicians to move towards a consensus on new nuclear build. I hope that that is something that today’s debate will go a little way towards rectifying. It has also undermined the Government’s ability to get the public to buy in to nuclear policy. I understand that a new nuclear consultation document will be published at the same time as the energy White Paper in May, and that timing may be enforced. However, that seems strange in view of the judge’s criticism. The risk is that the White Paper could be seen to be pre-empted—or not to be pre-empted—by the consultation document. If the White Paper has green edges—in the consultative rather than the environmental sense—that means that important decisions on the future of energy policy risk being further delayed. That concerns me and I think that it would concern members of the Committee.

A carbon-pricing framework that provides long-term incentives for investment in all low-carbon technologies is very important. We took a lot of evidence on the different costs of nuclear power and how that related to other sources of electricity. We concluded that the Government should make it clear that all the costs of building, operating and decommissioning new nuclear power stations should fall to the private sector investors who build those stations. In other words, the costs are a concern for investors, not the Government or the taxpayer.

A policy framework that provided a level playing field, rewarding all low-carbon technologies, was seen as the only way in which the Government could cost-effectively tackle carbon emissions from the electricity sector. However, because of the long lead times for nuclear, and the period over which investors would seek returns, that framework would need to provide 15 to 20 years of certainty over a reasonably stable and foreseeable price for carbon if the private sector were to invest. Current carbon pricing arrangements, such as the climate change levy and particularly the EU emissions trading scheme, do not provide a sufficiently long-term stable carbon price.

The energy review rightly commits the Government to continuing with the EU ETS as the main means of pricing carbon, but in my view that is not an adequate approach. Phase 2 will take us to 2012 and there will be no clear progress on phase 3 of the scheme until perhaps 2010. However, significant progress must be made urgently if the Government’s objective of advancing nuclear power is to be achieved and the energy gap we all fear in the next decade closed.

When we visited the European Commission in February, we were impressed by its commitment to
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making the EU ETS a success, but interested to learn of the scale of opposition among many member states to the very tentative steps in phase 1. It seems that the Commission has no option but to proceed in fairly short time frames until all member states are convinced of the need for a robust and enduring emissions trading scheme. Is the Minister convinced that the Commission is being strict enough in its review of allocations? Is it generally approaching the scheme in the right way? Are the other member states willing to abide by its decisions or is there a risk that, in practice, they will try to undermine them? What does he make of potential nuclear investors’ concerns that we cannot wait for a third phase of the EU scheme? Investment decisions are needed now, and that means a UK initiative now, over and above the EU ETS arrangements.

The third point is the need for a long-term storage solution for the UK’s existing radioactive waste legacy, never mind that created by a new generation of reactors. The Government rightly expect the private sector to meet the costs of decommissioning and waste management for any new build. However, nothing is yet in place to dispose of the existing nuclear waste legacy, and the record of successive Governments in that respect has been abysmal. Without a solution, or at least the prospect of one, everyone will be in a difficult position. The Government could find, if they seek to introduce new build too quickly and underestimate the cost of nuclear waste disposal, that they might have to cover some of the cost of future disposal themselves if it proves higher than the industry expects as a result of Government indications.

That is not what the industry wants, but the lack of progress is making it all difficult. The Committee on Radioactive Waste Management, or CoRWM, concluded last year that deep geological repository was the best means of providing a long-term solution to the UK’s waste legacy. That was no surprise. We all knew that that was what CoRWM was going to conclude. It is not rocket science—an appropriate phrase, as one of the options was to fire nuclear waste into space. CoRWM concluded that site selection would need to involve a high level of local engagement. Again, I think that it is right. That is the experience in Scandinavia too. Nirex’s estimate is that it could cost about £10 billion.

The Government published a response to CoRWM accepting its broad thrust, but we have not heard a great deal about what has happened since then. That is worrying. The principle of local community “volunteerism” is likely to mean that it will take longer to arrive at specific solutions than would have been the case with simple Government direction.

Mr. Jamie Reed (Copeland) (Lab): There is no doubt that the waste legacy is the elephant in the room of nuclear policy. The Government did the right thing in agreeing with the CoRWM recommendations. Since then, the borough council in the area that I represent has entered without prejudice into discussions with the Government about exactly what the CoRWM recommendations mean and might mean. I encourage hon. Members not to read anything more into that, but it is a fact that 70 per cent. of the nation’s higher activity waste resides in my constituency, as does all its low-level waste. We are getting there. The policy
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framework is now in place and most hon. Members accept that the debate has moved on significantly since the report was published.

Peter Luff: I am encouraged to hear that. It is not what I was able to determine during my researches for this debate, but it is encouraging. Perhaps the Minister could say some encouraging words in his response. I am glad to hear it, because the waste in the hon. Gentleman’s constituency needs to be dealt with, irrespective of any decisions on new nuclear build. I sincerely hope that his optimism is well placed.

We need clear, transparent funding arrangements for waste disposal. For example, will the Government charge marginal or average costs to the operators of new nuclear power stations for the disposal of their waste in a facility that the Government will have to construct anyhow? There are important questions not just about the practicalities but about the funding of disposal.

The fourth principal point is the need for a review of the planning and licensing systems to reduce the lead time for construction. Those issues are not unique to nuclear power, at least as far as planning is concerned. However, nuclear power stations require a number of specific consents and approvals, for site licences and for planning consent. Under existing regulations, an optimistic projection for the time taken to gain all the necessary consents is around five years, and potential developers believe that that is too long.

Proposals to shorten the regulatory process focus on pre-licensing and planning. Developers want the pre-licensing of generic reactor technologies to address design and siting issues right at the start, and to reduce the time required to license subsequent reactors. On planning, the industry wants the Government to set a road map for the process, restricting the ability of public inquiries to question the original policy and requiring them instead to focus on local issues. I know that the Government are moving in that direction. On publication of the energy review, the Government will produce a response to the consultation on the kind of reforms to the planning regime proposed by the industry. I hope that that will be available in May.

Reform in this area is essential if we are to fast-track new build, but there are risks. Pre-licensing does not guarantee a faster outcome—a form of pre-licensing was used for Sizewell B, for example. Most of the reactor technologies are untested. A process that is perceived to be cutting corners will not engender public confidence, which is crucial to new nuclear build. Curtailing the planning process would work against encouraging public buy-in to new nuclear build.

There have been newspaper reports of some electricity generators putting pressure on the Government to start the type approval of reactors even before the White Paper is published, to save time. I wonder whether those reports are true. Has the nuclear installations inspectorate started work on pre-licensing generic reactor designs? What attitude are British Energy and the Nuclear Decommissioning Authority taking to the use of the sites of their current plants for new facilities?

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