The
Committee consisted of the following
Members:
Chairman: †
Mr.
Roger
Gale
Bacon,
Mr. Richard
(South Norfolk)
(Con)
†
Barker,
Gregory
(Bexhill and Battle)
(Con)
Dorrell,
Mr. Stephen
(Charnwood)
(Con)
†
Duddridge,
James
(Rochford and Southend, East)
(Con)
†
Efford,
Clive
(Eltham) (Lab)
†
Flello,
Mr. Robert
(Stoke-on-Trent, South)
(Lab)
†
Griffith,
Nia
(Llanelli) (Lab)
†
Horwood,
Martin
(Cheltenham)
(LD)
†
Keeble,
Ms Sally
(Northampton, North)
(Lab)
†
McDonagh,
Siobhain
(Mitcham and Morden)
(Lab)
†
Michael,
Alun
(Cardiff, South and Penarth)
(Lab/Co-op)
†
Purchase,
Mr. Ken
(Wolverhampton, North-East)
(Lab/Co-op)
†
Sheridan,
Jim
(Paisley and Renfrewshire, North)
(Lab)
†
Turner,
Dr. Desmond
(Brighton, Kemptown)
(Lab)
†
Webb,
Steve
(Northavon)
(LD)
†
Woolas,
Mr. Phil
(Minister for the
Environment)
Yeo,
Mr. Tim
(South Suffolk)
(Con)
Dr. H. Weston, Committee
Clerk
† attended the
Committee
Fourth
Delegated Legislation
Committee
Monday
18 February
2008
[Mr.
Roger Gale
in the
Chair]
Radioactive Contaminated Land (Modification of Enactments) (England) (Amendment) Regulations 2007 (S.I., 2007, No. 3245)
4.30
pm
Motion made,
and Question proposed,
That the Committee has
considered the Radioactive Contaminated Land (Modification of
Enactments) (England) (Amendment) Regulations 2007 (S.I., 2007, No.
3245)—[Mr.
Woolas.]
The
Chairman:
With this it will be convenient to
consider the Radioactive Contaminated Land
(Modification of Enactments) (Wales) (Amendment) Regulations 2007
(S.I., 2007, No. 3250), the Radioactive Contaminated Land Regulations
(Northern Ireland) (Amendment) Regulations 2007 (S.I., 2007, No. 3236)
and the Radioactive Contaminated Land (Scotland) (Amendment)
Regulations 2007 (S.I., 2007, No.
3240).
Gregory
Barker (Bexhill and Battle) (Con): It is a pleasure to
serve under your chairmanship, Mr. Gale, on such a glorious
February afternoon. There is, perhaps, a certain delicious irony in the
fact that on the day when the nationalisation of Northern Rock and the
huge liabilities that that will impose on taxpayers—and that
they are taking on board—is being debated in the main Chamber,
upstairs we are debating a seemingly relatively obscure measure, but
nevertheless one that also has the potential to lumber the taxpayer
with significant liabilities. Indeed, it is possible to conceive that
the liabilities could, under certain circumstances, run to billions and
billions of pounds. Yet the Government would have preferred not to
debate this small measure at all. They would have preferred no one to
notice its passage. Nevertheless, I thank the Minister for formally
moving the instrument and look forward to his closing
remarks.
The
radioactive contaminated land modification of enactments regulations
are established in part 2A of the Environment Protection Act 1990 and
are an important tool in protecting our nation’s fundamental
asset—its land. By setting out a regime for monitoring and
cleaning up contamination, we ensure that land quality is preserved.
[
Interruption.
]
The
Chairman:
Order. If hon. Members wish to have a private
conversation, it would be awfully helpful if they did so
outside.
Gregory
Barker:
I am very happy to give way, Mr. Gale.
[
Laughter.
]
Through
the regime, we also ensure that greater pollution does not occur
through neglect of a contaminated site, thereby allowing over time the
pollution of lands
surrounding it. We ensure that the causes of pollution are identified
and managed so that further and avoidable contamination does not
occur.
I support the
2006 regulations that extended the regime to pollutants relating
specifically to nuclear industries and radioactively contaminated land.
As we start to decommission previous generations of nuclear power
stations, it will be of the utmost importance that the process of
remediating land adversely affected by their activities is done in a
carefully managed and thoroughly responsible way. Indeed, beyond the
power stations, there are many associated facilities, storage plants
and service industries that handle radioactive materials. They will be
regulated, and the land that they use will be protected by these
sensible
regulations.
At
the heart of the 2A regime is a risk-based approach
that considers the current use and circumstances of the land, and that
requires remediating actions to be taken to a degree appropriate to the
risks. That fair and effective approach has been underpinned since 1990
by the fair and equally appropriate principle that the polluter pays.
Putting it simply, the persons or industries responsible for
degradation of the land are made to pay for its restoration,
appropriate to the risks brought about by the
pollution.
I believe we
can all agree that that is a fair and sensible solution—it is
not contentious. Since 1990, the system has worked well and there has
been little resistance from industry to a system that it considers to
be proportionate and equitable. Indeed, during a long and thorough
consultation on the issue of land contamination and remediation carried
out in 2006, local authorities, environmental regulators, industry and
other stakeholders, including radiological specialists and
environmental groups, were asked their views on whether and how the
1990 legislation could best be extended to cover land contaminated not
merely with radioactive material or radiation, but through a nuclear
occurrence—the subject of this statutory
instrument.
The
Government are obliged under articles 48 and 53 of the basic safety
standards directive to satisfy those criteria within legislation.
Indeed, they have spent such a period of time trying to solve the
problem that they are now under pressure of infraction proceedings from
the European Commission and large punitive fines from the European
Union.
Within that
consultation a variety of views were expressed, but the majority felt
that part 2A of the 1990 legislation should follow the Paris convention
requirement: that the polluter should pay. The Paris convention is a
pan-European document on liability in the nuclear industry and covers
specifically occurrences dealt with in the statutory
instrument.
The Paris
convention assumes that the operators will obtain commercial insurance
against costs arising from such incidents: an approach, it seems, that
was agreed upon across the EU through the Paris convention. So I ask
the Minister: why has the British nuclear industry been unable, after a
considerable period of time and a great deal of effort, to secure
commercial insurance, as anticipated in the Paris convention? Can he
explain why it has reached such a point here in the United Kingdom that
the Secretary of State has taken upon the Government the costs of
dealing with a contamination from any nuclear occurrence? However
unlikely that might be, the costs of dealing with such an occurrence
could run into billions and billions of pounds and would have to be
accounted for by the
Treasury.
Flying in the
face of his own consultation, and of the Paris convention, The Minister
is burdening the public purse with a totally open-ended cost of
cleaning up any number or scale of nuclear occurrences. Can he explain
how he came to such a remarkable decision? Given that the inability to
secure commercial insurance can be the result only of an unacceptable,
unviable, uncommercial degree of risk or cost surrounding any potential
incident, can the Minister make a statement as to the state of our
clearly ailing nuclear infrastructure if such insurance is
unobtainable? What a state the industry must be in that it was unable
to obtain insurance or unwilling to shoulder the costs that would be
required by the market.
The Government announced in
January this year a new generation of nuclear reactors. As part of
that, they assured us that the public purse would not bear any of the
costs of that new wave of development. We supported that. In what way
exactly does removing the obviously prohibitively large costs relating
to insurance and transferring any future risks and costs to the
taxpayer out of the private sector not constitute bearing any of the
costs of new development? Whether it is justifiable or not, how can it
not be seen as a form of support for the nuclear industry by the public
sector?
Can the
Minister explain why the historically heavily subsidised nuclear
industry has found itself in a situation where it can refuse to insure
itself and can oblige or force the Government to bear the costs of any
occurrences, which presumably would be the result of the state that the
industry has got itself
into?
Steve
Webb (Northavon) (LD): The hon. Gentleman mentioned
existing nuclear plants and clean-up, but obviously the regulations
will have implications for the viability of a new generation of
nuclear. Is it his position that, because the regulations imply subsidy
to the nuclear industry, and because his party’s position is
“no nuclear with subsidy”, he is therefore opposed to new nuclear because of the
regulations?
Gregory
Barker:
No, we are not opposed to new nuclear, which may
have a genuine role to play in future electricity provision in the
United Kingdom. But we are certainly against hidden subsidy and
undeclared and back-door support for the industry, which seem to run
totally counter to statements from the Prime Minister, no less. We want
clarity so that people can make a sound judgment. The Liberal Democrats
have taken a principle position on this and are, de facto, against new
nuclear, but that is not our position. We believe that it should be
without hidden subsidy, and that the taxpayer has a right to know what
form support will
take.
Steve
Webb:
But the position of his Front-Bench spokesman on
energy, rather than on environment, is that there should be no
subsidy—not just no hidden subsidy.
Gregory
Barker:
That is correct. We believe that there should be
no subsidy, hidden or otherwise. We want to be clear about that, but we
do not have an ideological position in the way that the Liberal
Democrats do, or an ideological preferment in the way that some
Ministers do. For the Conservative Front Bench, nuclear is a
technology, not an
ideology.
Will the
Minister please tell the Committee what other sectors enjoy financial
protection against accidents, their own mishaps, mistakes or
mishandling, or their employees’ mistakes? Will he go over his
Department’s rationale for what amounts to an open-ended pledge
for a financial bail-out, albeit in the most dire and
difficult-to-imagine circumstances? On the day on which the Government
nationalised a bank, are they starting that process in the nuclear
industry? If the Minister suggests that the solution is only a
tide-over until commercial insurance can be obtained by the
industry—that sounds familiar—can he give an estimate of
how long that state of affairs, with the taxpayer on the hook, will
last? Is he prepared to set a limit, or at least to set himself a goal?
Can he suggest what events would initiate a reduction in insurance
costs to a level with which the industry would be happy? Can he explain
why any businessman would take out an expensive insurance policy when
the alternative is to have those costs underwritten free by the
Government?
Does the
Minister accept that this statutory instrument is an open-ended
spending commitment that will undoubtedly be costly in the large-scale
decommissioning process that will take place soon in older power
stations? It seems that their installations are in such a state that
the risk of incidents is—I say this not from a scientific point
of view, but because of their inability to secure commercial
finance—too high to secure finance. Does he accept that that
effectively amounts to a subsidy for new nuclear build in Britain,
which, as is typical of this Government, is yet another U-turn, only
six weeks after the Prime Minister gave assurances that no such
subsidies would be granted? The Minister has a great deal to explain to
the
Committee.
4.43
pm
Mr.
Ken Purchase (Wolverhampton, North-East) (Lab/Co-op): I
rise briefly to make one or two points that may be relevant to our
deliberations.
First, I
consider such matters on a technical and not an ideological basis,
because the science of nuclear physics can be used for good or evil,
and I take a wholly dispassionate view of the subject. However, I find
it difficult to understand the pursuit of nuclear power. There is no
question that the science is brilliant, or that it has slightly outrun
the technology, and no doubt that both the science and the technology
massively outstrip our ability to marry those
processes.
I speak from
the perspective of great land pollution problems over many years in my
west midlands constituency. Pollution from heavy metals and so on in
the ground goes back 200 or 250 years, and is very difficult to clear.
It is almost impossible to obtain a reasonable price for such land when
safety clearance cannot be given for present or future purposes. I seek
assurances from the Minister that when we adhere to
the principle that the polluter pays, we ensure that the polluter
actually does pay. The cost of clearing up in the west midlands and the
north-west of England has fallen heavily on the public purse.
Furthermore, much needed development has been delayed in many former
industrial areas. We need to be certain that we can build in the
certainty that the polluter will pay the totality of the costs, rather
than hoping to externalise them to the community in 200 years’
time. Such certainty would be a step forward, and I hope that the
Minister can give us those
assurances.
4.45
pm
Steve
Webb:
It is a pleasure to serve under your chairmanship
again, Mr. Gale.
I have a lot of sympathy with
what the hon. Member for Wolverhampton, North-East said. I welcome the
fact that a debate has been secured on the regulations, because they
raise a number of issues on which we have had no clear answers from the
Government, and I hope that the Minister will give us some
specific answers today.
In each of the four sets of
regulations, a liability that should properly belong with the nuclear
generators will end up with the taxpayer—that is what the
regulations are about. The query in my mind is how we have reached this
point. My first question following on from that is whether the risk
involved is inherently uninsurable. The presumption is that if
something can be commercially insured, the polluter should pay by
obtaining insurance. Presumably, the issue is not unique to the United
Kingdom, and countries such as France will be dealing with similar
issues, although that is obviously slightly different because of the
ownership of the nuclear industry there. However, will the Minister
clarify whether other countries with a nuclear industry have been able
to deal with the lack of commercial insurance? In other words, are
there other, similarly structured nuclear industries where the same
issue has arisen, but where the problem has been resolved differently,
or are such businesses generally publicly owned, so whether the
business or the taxpayer pays the insurance amounts to the same
thing?
If these risks
are not inherently uninsurable commercially, how long will the
regulations apply for? As the hon. Member for Bexhill and Battle asked,
will they apply indefinitely, or are they just to give us some
breathing space while commercial insurance can finally be arranged? If
we do not have a clear answer on that, we are being asked to accept an
open-ended liability on the taxpayer. I have looked at the explanatory
memorandums and other sources, but I can find no estimate of the size
of that liability. My understanding of good practice in Treasury and
national accounts is that a long-standing major liability taken on by
the public sector should be quantified and recorded. Will the liability
that we are taking on today be on the public sector balance sheet? If
so, has a valuation been put on it? In evaluating the regulations, we
need to know how big the blank cheque is that we are being asked to
sign. Hon. Members should make no mistake about the fact that we are
being asked to sign a blank
cheque, because the Government—obviously, the
Minister has not spoken yet—have not told us how big the cheque
will be.
We are
clearly talking about a subsidy to the nuclear industry—that is
what is going on here. We are talking about a private business running
a commercial activity with which a cost is associated, and the taxpayer
being asked to bear that cost. In my intervention, I said the
Conservative position was that there should be no new nuclear if it
involved a subsidy. If the regulations go through, as I suspect they
will, a subsidy will be put in place. The Conservatives will therefore
either have to reverse their policy and say that they will have new
nuclear anyway, notwithstanding the subsidy in the regulations, or they
will have to propose to repeal the regulations, and I am not sure
whether that is actually their
position.
The key
questions are threefold. The first relates to the time scale. Are we
being asked to accept that these liabilities will fall to the taxpayer
indefinitely or are the regulations just a stop-gap to prevent heavy
penalties from the European Union, although we will eventually hand the
liabilities back? Is this just a temporary fix—of the kind
discussed elsewhere in the building earlier today—to get us out
of a hole or is it a long-term
liability?
How do the
proposals sit with the stated policy of the Department for Business,
Enterprise and Regulatory Reform that there will be no subsidy for new
nuclear? It is hard to reconcile those two positions. A set of
regulations—[
Interruption.
]
The
Chairman:
Order. I am sorry, but this Chairman likes to
hear the debate. It is a small room and chirruping in the background
does not help. If hon. Members wish to have private conversations,
please do so on the comfortable benches
outside.
Steve
Webb:
Thank you, Mr. Gale, I will give way in a
moment.
On the issue
of joined-up or lack of joined-up government, the Liberal Democrats
think that the environment and energy need to be dealt with in an
integrated way, which is why we have a single spokesperson on both of
those issues. The Government deal with those subjects separately and we
can see the problem with that approach in the proposals. The Department
for Environment, Food and Rural Affairs says that the nuclear industry
needs to be subsidised, but the Secretary of State for Business,
Enterprise and Regulatory Reform says that we should have nuclear with
no subsidy. One of those two statements is wrong and it is not clear to
me whether the answer is different depending on who one talks
to.
Gregory
Barker:
Does the Liberal party support the measures? The
clean up has to be dealt with and the nuclear industry is a fact; we
cannot uninvent it. Whatever the Liberal party’s view is on new
nuclear, does it support the measures or does it propose to nationalise
the nuclear industry as
well?
Steve
Webb:
Funnily enough, we oppose the nationalising that is
taking place in the regulations. We oppose the taxpayer taking on these
liabilities and we
want to know why the Government have not ensured that the private
companies that run the present nuclear industry have not obtained
insurance through working with the companies and the insurance
industry, over which they have a lot of sway. In other words, we
believe that an effective energy and environment ministry would have
ensured insurance was taken out in relation to the risks. It is hard to
believe such risks are in principle uninsurable—there must be a
market out there with sufficient activity on the part of the Government
to make sure that insurance could be obtained. The companies had no
real incentive to obtain insurance. They had no incentive to bang on
the door of the insurers and demand insurance because they knew that
the Government would be the insurer of last resort. As far as I can
see, the companies had no incentive to make that
happen.
We do not
believe that this liability should be passed on to the taxpayer or that
the regulations are consistent with what another Department down the
road is saying about no subsidy for new nuclear. It is interesting that
the explanatory memorandum on the regulations shows that there was a
consultation. Guess what? The vast majority of people said that the
polluter should pay, but the Government decided that the polluter will
not pay—yet another Government consultation that has not had any
meaningful impact. People say one thing and if it is not the answer
that the Government first thought of, they come up with a different
answer.
On the time
scales involved, my concern might simply be because of confusion on my
part, but we are talking about part 2A of the Environment Protection
Act 1990, which came into force on 1 April 2000. Nearly eight years
later, we are discussing regulations that state that the liability will
end up with the taxpayer. It would be helpful if the Minister could say
what vigorous activity took place between Departments to make sure that
we did not reach this point. One senses that the Government’s
hand has been forced by, as the Minister says from a sedentary
position, legal action. It would be nice if the Government had been
more proactive and, rather than being dragged into a last-ditch bail
out, had come up with a constructive policy to ensure that the
liabilities ended up where they properly belong: with the generators,
not the
taxpayer.
4.53
pm
The
Minister for the Environment (Mr. Phil Woolas):
It is a pleasure to serve under your chairmanship, Mr. Gale.
On reflection, I welcome the fact that the Opposition have prayed
against the order because, having heard what the Machiavellian
conspiracy suspicions are, it gives me the opportunity to reassure
Opposition Members that what they have been talking about may be
arguments in the debate on the future of nuclear, but they have
little—indeed, virtually nothing—to do with the
regulations, which do not cover nuclear power sites.
I shall try to respond to the
questions asked and explain why it is a matter of a tiny
tidying-up—I hope that hon. Members will accept it is a tiny
tidying-up when they have heard the explanations. The regulations are
not of the import that has been stated in the contributions today. On
reflection, I welcome the fact that this is a prayer as it has given us
the opportunity to hear the arguments.
The four statutory instruments
are transposing regulations required to implement European Union
directives; there is one each for England, Wales, Scotland and Northern
Ireland. They are required to complete the transposition of articles 48
and 53 of the council directive 96/29/Euratom, which lays down the
basic safety standards for the protection of the health of workers and
the general public against the dangers arising from ionising
radiation.
The United
Kingdom believed that it had fully transposed articles 48 and 53 of the
directive. However, a small loophole, albeit one that has proved
technically difficult to plug, was identified after the due date for
transposition. The loophole covers a situation that is highly unlikely
to arise. Following its identification, the European Court of Justice
ruled that the United Kingdom was in breach of its obligations under
the Euratom treaty, by failing to transpose those articles completely
into national law. That was a serious matter because it raised the
potential for damage to the UK’s reputation. As has been said by
hon. Members, it raises the possibility of infraction fines from the
European Union. Nevertheless, we should and would be doing it
anyway.
If I may crave
the Committee’s patience, I shall give more technical detail on
the matter and explain why we are where we are. The
statutory instruments for England, Wales and Scotland amend earlier
regulations extending part 2A of the Environmental Protection Act 1990
to radioactivity. The statutory instrument for Northern Ireland makes
similar amendments to the radioactive regime created by earlier
Northern Ireland regulations. However, part 2A is not relevant in that
instance, as it does not apply to Northern
Ireland.
At
the time of the consultation, questions were raised
as to whether the approach in earlier regulations, based on the
“polluter pays” principle, was compatible with other
international obligations under the Paris and Brussels conventions on
third-party liability. As a result, the earlier regulations excluded
land contaminated by a nuclear occurrence where civil liability was
already regulated by the Nuclear Installations Act 1965. The Paris and
Brussels conventions cover claims for third-party
damages—
Gregory
Barker:
The Minister placed great emphasis on the words
“already regulated”, but there is a difference between
being regulated by that Act and the responsibility for the liability.
The two are quite
different.
Mr.
Woolas:
The hon. Gentleman’s logic is coherent, and
I will answer his question as I proceed. He will find that we are
dealing with a potentially tiny proportion of incidents outside
existing and decommissioned nuclear sites. That is the main
point.
I was trying to
explain that the Paris and Brussels conventions cover claims for
third-party damages arising from nuclear
occurrences.
Gregory
Barker:
I apologise for interrupting the flow of the
Minister’s speech, but he is wrong to suggest that the main
thrust of my speech was simply concerned with nuclear sites. I made it
clear that nuclear fissile material passes through other sites handling
supply. Practically every day of the week large amounts of
nuclear material are transported on our rail network, from being
decommissioned up to Sellafield and across the country. People would be
amazed if they realised how much nuclear material was simply in
transit, let alone in other places such as storage centres and
supplying our nuclear power stations. Our interest is not exclusively
with the generators, whether current or
decommissioned.
Mr.
Woolas:
I thank the hon. Gentleman for that clarification.
I did not intend to imply anything different. I am happy to make that
clear. Indeed, the regulations, to which I refer when talking about
nuclear sites, include the supply chain that he mentioned. It is
perhaps not often understood in the public debate that most of the
materials that fall under the DEFRA regime are not directly related to
nuclear power. By volume, they more often relate to hospital procedures
and manufacturing processes. However, the regulations before us today,
fall outside that already-regulated regime.
It might help Committee members
understand, and me to convince them, if I explain that the decision to
tighten up the regulations arose from the case of a gentlemen who
believed that he had nuclear waste in his private property—his
house. As far as we were aware, there was no reason to think that that
was the case. However, he brought a legal case and it was shown that
there was nothing to worry about and that there was no nuclear
radioactive waste in his garden, which for whatever reason he thought
that there was. As a result, we discovered that the Environment Agency
needed powers to intervene, because, owing to a loophole, it was not
covered by the regulations. I accept the hon. Gentleman’s point,
but the regulations before us do not cover the supply chain, if I can
put it that way, which is already regulated. The regulations before us
cover the regime outside that. I urge him to listen to the rest of the
argument and I am sure that Committee members will be
convinced—I can see the anticipation on their
faces.
I shall touch on
two main principles under the 1960 Paris and Brussels convention: the
first is the channelling principle, which channels all liability on to
the operator and means that others involved in nuclear installations,
such as contractors, cannot be liable for damage. That also means that
the operator can incur no liability for nuclear damage outside the
convention. Operators of nuclear installations are liable for nuclear
occurrences, irrespective of fault on their part—strict
liability—up to a financial cap. The second principle is that
operators must have adequate financial security in place to ensure that
they can meet the costs of any liability placed upon them. The
convention regime therefore provides legal certainty, not only for
operators, but for potential victims damaged by a nuclear occurrence,
who in the event of such an occurrence will know against whom they
should claim and will be assured that the operators have financial
cover for such claims.
That answers the point about
insurance. If the impression has been given that the nuclear industry
is not insured, owing to the regulations, I stress that that is not the
case. Those obligations prevent any liability
from being placed on nuclear operators without financial security being
available to ensure that those operators can pay out if called upon to
do so. The preference is for that financial security to be provided by
commercial insurance, which is the case for existing liabilities for
third-party damage caused by nuclear occurrences. We have held
prolonged discussions with the insurance industry and there is
currently no commercially-available insurance cover for the liabilities
introduced by these new instruments. The problem is the difficulty in
quantifying environmental risk in general and has nothing to do with
nuclear in particular. In the short-term, there is no alternative to
the potential liabilities remaining with the state, which is where they
have lain since the directive came into force in May
2000.
James
Duddridge (Rochford and Southend, East) (Con): The
Minister talks about a small tidying-up, but are the Government not
accepting unlimited liability? He does not know the
cost—£1 million, £100 million, £1 billion
or £100 billion—because the liability is unlimited. It is
not a tidying-up matter at all.
Mr.
Woolas:
It is not £1, let alone £100 or
£1 million. We are not writing a blank cheque, but dealing with
potentially ionised radioactivity outside the regime for radioactive
substances in this country, which is already covered by regulations.
These regulations apply to those instances outside the regulated
regime, so the question of an open-ended liability does not therefore
arise. Indeed, it is not expected that these regulations will ever be
used. An event in which they would be called for is extremely
unlikely.
Steve
Webb:
I am grateful to the Minister, who is trying to
explain the regulations, but I am more confused than I was when we
started. He just said that the commercial insurers have not been able
to come up with an insurance package because it is so hard to know what
the future environmental costs might be. I believe that that is almost
verbatim what he just said. So we have no idea what the future costs
will be. If they were perhaps not £1 or nil but potentially as
tiny as the Minister implies, why would any insurer worth their salt
not think that they could have some money for old rope? They would
offer a policy because the future liability is likely to be negligible.
Are not his two statements
irreconcilable?
Mr.
Woolas:
Not in the real world. We are not talking about
insurance of nuclear installations on the broadest definition as given
to us earlier. We are talking about whether, for example, a private
individual could get insurance in respect of nuclear contamination in
their back garden. The question is not the one that the hon. Gentleman
raises but one that would apply in all such environmental situations,
nuclear or otherwise. In short, there is not an insurance market for
the sort of extremely unlikely event that we are
discussing.
Steve
Webb
indicated dissent.
Mr.
Woolas:
The hon. Gentleman shakes his head. With respect,
he is not listening to the common sense in my argument. The
Government’s expectation is that the regulations, which were
required because of the
loophole identified in the case that I referred to, and because of the
European Court of Justice ruling, are outside the existing regulation
of nuclear materials. I hope that that reassures the hon.
Gentleman.
James
Duddridge:
I am afraid that the hon. Member for Northavon
has been given no reassurance whatsoever. The Minister’s
comments do not fit at all with discussions that I have had with
Lloyd’s of London. Certainly, from a pragmatic perspective, I am
sure that many members and syndicates at Lloyd’s would take on
the type of business that involved receiving £1 worth of risk
and taking a premium. Has the Minister even met with Lloyd’s of
London?
Mr.
Woolas:
The hon. Gentleman is trying to create a picture
that does not apply in the real world. It is not that people are
seeking insurance for such an eventuality and that the insurance
companies are refusing to provide it, but that the circumstances
whereby the regulations could possibly apply are so remote—they
derive from a legal tidying-up of the regulations, given the
obligations on member states comprehensively to introduce transposition
of the original directive—that the question simply does not
arise. I am sure that I could spend my time engaging in debate with
Lloyd’s of London about the matter, but I do not think that that
would be the best use of my or my colleagues’ time. I shall
conclude my remarks as I suspect that we have covered the purpose of
the regulations.
In the
short term, there is no alternative to the potential liabilities
remaining with the state, where, as I said, they have lain since the
directive came into force. That is not, of course, ideal, and it is not
where we want to be. The Government are analysing options for nuclear
operators to obtain financial security for the new heads of damages in
the amended Paris convention. In the first instance, we will consider
whether any of the possible options will be of benefit in enabling us
to move the liabilities arising under the statutory instruments from
the state to
elsewhere.
Steve
Webb:
I sensed that the Minister was concluding without
answering one of my questions. Presumably other nuclear states have had
to address the same issue. Have any others addressed it through a
commercial insurance
approach?
Mr.
Woolas:
I am not aware of any. Let me explain
the point about the Paris convention. That will
probably help. The regulations we are discussing would only go up to
the Paris convention cap in any event. Beyond that cap the state is
already liable in order to protect the public.
[
Interruption.
] From a sedentary position the hon.
Member for Bexhill and Battle asks me what the cap is. It is
£140 million. The idea that these regulations introduce an
unlimited cap is
mistaken.
On
the wider point, the Government have no intention of
subsidising new nuclear build, which is a completely separate issue
from these regulations. The accusation made by the hon. Member for
Northavon that the Department for Business, Enterprise and Regulatory
Reform and the Department for Environment, Food and Rural Affairs were
not joined up on this issue is not
fair. We sing from the same hymn sheet. We consult closely with each
other. The policy that was put forward recently in the statement on
nuclear power is perfectly co-ordinated between the two Departments and
other Departments, mainly the Department for Transport, which is also
directly involved. Irrespective of the policy debate on nuclear power,
these regulations would be being brought in because of their
purpose.
The
work on the completion of implementing this directive has been going on
for a number of years. The public consultation that I referred to a
moment ago took place in 2005, well before the current developments on
nuclear power. The Government have been clear throughout that operators
of any new nuclear power station must pay for decommissioning and
cleaning up their activities. A few weeks ago we introduced the Energy
Bill which sets out robust financing arrangements to ensure that
private sector energy companies cover their full costs of
decommissioning and waste management.
The statutory instruments deal
with contamination outside nuclear sites. That is the broadest
definition of sites, the point which the hon. Member for Bexhill and
Battle asked me to clarify. The purposes of the instruments are already
achieved on nuclear sites by licensing requirements under the Nuclear
Installations Act 1965. Licence conditions provide the licensing
authority, the Health and Safety Executive, with extensive powers to
ensure the site remains in a safe state during its operational life and
subsequent decommissioning. A site will be released from licensing
requirements only when the HSE is satisfied that it presents no danger
from ionising radiations.
The statutory
instruments before the Committee would apply only in the unlikely
instance where despite the requirements of the 1965 Act, lasting
radiation exposure was being caused to people as a result of past
activities undertaken on the site. In practice, we know of no such land
that would be determined as radioactive contaminated land under the
proposed regulations. In addition, detailed requirements for responding
to a nuclear emergency are already set out in existing legislation: the
Radiation Emergency Preparedness and Public Information Regulations
2001.
The statutory
instruments before the Committee only have effect where, for any
reason, the emergency response does not fully provide for any necessary
off-site remediation. All in all, there is only a remote possibility
that these regulations would ever be used. A number of conditions would
have to apply. First the land must be outside a nuclear site—in
its broadest definition, as covered by the licensing of nuclear
sites—that is the important reassurance that the hon. Member for
Bexhill and Battle seeks—and be causing lasting radiation
exposures above a specified threshold to
people.
Mr.
Purchase:
How can something be outside the widest
definition of a site? All the conditions will have been taken into
account earlier, such as the transportation of nuclear waste. I
understood that that was regarded as a site in the widest sense, so how
can something take place outside that
site?
Mr.
Woolas:
It probably could not; that is the point. That is
my difficulty in trying to explain this statutory instrument, which
covers a not hypothetical, but extremely unlikely case. The licensing
regime for the processing,
transportation and use of radioactive material covers the eventualities
that it is possible to imagine from experience. My hon. Friend’s
point is therefore extremely helpful, and he is spot on. I wish I had
said that 20 minutes ago and we would not have had to go through the
tortuous exercise of the past 20 minutes.
The second
criterion is that the land must be contaminated by radioactivity
arising from a past activity, rather than a current one, or by the
after-effects of a nuclear emergency, not an ongoing one. Thirdly,
there must be a civil liability for the incident, which is regulated by
the Nuclear Installations Act 1965, and, fourthly, the operators must
have failed to take action themselves to clean up the contamination. I
do not accept the accusation that the Government have been anything
other than completely open about their intentions regarding liabilities
arising from the transposition of the
directive.
Martin
Horwood (Cheltenham) (LD): The conditions that the
Minister has just described would apply to almost any large-scale
nuclear accident on the scale of Chernobyl, for example. I am not
saying that an exact parallel will happen here, but surely that would
go outside the widest definition of a site and would contaminate above
a certain level. It would also be beyond the scope of the site operator
to clean up afterwards. Is not that exactly the kind of risk that,
although unlikely, appears to be
uninsurable?
Mr.
Woolas:
No; such an accident would be covered by existing
regulations on nuclear accidents. Returning to the point made by my
hon. Friend the Member for Wolverhampton, North-East,
the type of situation we are discussing would be beyond that. If it
were not, this would be a major debate and the Government would,
indeed, be guilty of the accusations made by the hon. Members for
Northavon and for Bexhill and Battle. The regulations do not pertain to
incidents that are covered by existing regulations, legislation and
international
treaties.
Gregory
Barker:
I am sorry to interrupt the Minister again, but he
keeps confusing regulation and liability, although I am sure that he is
not doing it on purpose. The fact that a set of circumstances is
regulated by an Act or a set of rules is quite different to the
liability for picking up the bill. We regulate on all sorts of things
here, but we do not pick up the bill when they go wrong. It is not good
enough for the Minister to replace the word “liability”
with “regulation” and think that the Committee will be
satisfied. We are not concerned with the regulations around incidents;
we are concerned with liability and to whom it falls. Will the Minister
please use the word “liability” and not confuse the issue
by talking about
regulation?
Mr.
Woolas:
It is unfair to say that I have confused
regulation and liability. Perhaps the hon. Gentleman chooses not to
accept the logic of my argument. The liability for any such incident
from nuclear activity is clearly covered, whether it be of the kind
that the hon. Member for Cheltenham described when he gave the
example of Chernobyl or an accident during
transportation or on a generating site. It is clearly covered by the
conventions, the legislation and the insurance—notwithstanding
the point about the cap—that are already
provided. We are not talking about such incidents, but about those
outside of those existing regulations and liabilities. That must be
understood.
It
is unfair to say that the Government have been anything other than
completely open about their intentions regarding the liabilities
arising from the implementation of the directive. The consultation on
the future of nuclear power was always clear in that obligations under
the Paris convention might have to be met with a continuing degree of
state liability. I refer to paragraph 4.15 of the consultation document
where we
said:
“We intend
to legislate in a way which has regard to the liability principles of
the Paris Convention as implemented in the UK and which does not impose
liability on operators for which financial security is not
available”.
We stated
under paragraph 4.32
that
“we expect to
implement Articles 48 and 53 of the Euratom Basic Safety Standards
Directive for the nuclear industry in a way which will involve at least
some degree of government
liability”.
Hence,
as I said at the outset, that demonstrates that the regulations are
well founded and are necessary to meet European Union obligations and
hide nothing untoward. I believe that I have answered all the questions
that I have been asked, other than the one from the hon. Member for
Northavon about the time scale of the regulations, to which the answer
is that the regulations can be revoked if, and when, there were
commercial insurances to cover such a peculiar set of circumstances.
However, notwithstanding that, the regulations will last until such a
time as Parliament decides. They do not have an end
date.
Gregory
Barker:
I thank the Minister for his explanation. It
certainly has, in part, answered some of our queries. However, I am
still not entirely satisfied by his answer or at least as matters were
explained to the Committee. It is difficult to comprehend how the hon.
Gentleman can fail to define nuclear occurrences as they are described
in the statutory instrument and say that they are so small as to be
almost unimaginable. He said that a pound would overestimate the
liability, but then claimed the protection of the Paris convention by
saying that we were maxed out at £140 million. Deep down there
could be some logic in that argument, but we have not heard it this
afternoon.
Article 4 of
the Paris convention sets out clear guidelines on the liability in
respect of the carriage of nuclear substances and their storage. It
makes clear that the operators are liable for that. We are only having
the legislation brought forward because—to quote the explanatory
note that was prepared presumably by the Department for Environment,
Food and Rural
Affairs—
“Unfortunately,
under pressure of infraction proceedings from the European Commission,
we are now obliged to complete our transposition of the Directive or
face punitive fines although it has still not proved possible to secure
commercial insurance or to put in place another form of financial
guarantee. This instrument therefore...completes the transposition
of the Directive allowing the UK to meet its obligations but does so by
placing an obligation on the Secretary of State to deal with
contamination arising from a nuclear
occurrence”.
We
have not been satisfied today about what defines a nuclear occurrence.
I do not believe that the Minister has been able to assure us of any
time scale under which this unquantified liability can be passed
across.
He does not seem very convinced as to whether or not the Government
tried hard to place it in the private sector as was asked by the hon.
Member for Northavon and my hon. Friend the Member for Rochford and
Southend, East. We have not had a convincing answer to the question.
Nor, as the Liberal Democrat Front Bench asked, have we had an answer
to the question of what do other signatories to the Paris convention do
in those circumstances.
We have not heard the Minister
pray in aid what other responsible Governments have done in those
circumstances and whether they have been able to secure private
insurance. It may not be an issue of fundamental principle, but with
regard to efficiency and competency, we remain dissatisfied with the
Government’s handling of this particular instrument.
Question
put:—
The
Committee divided: Ayes 8, Noes
4.
Division
No.
1
]
Question
accordingly agreed to.
Resolved
That
the Committee has considered the draft Radioactive Contaminated Land
(Modification of Enactments) (England) (Amendment) Regulations 2007
(S.I., 2007, No.
3245)
Motion
made, and Question
put:—
That
the Committee has considered the draft Radioactive Contaminated Land
(Modification of Enactments) (Wales) (Amendment) Regulations 2007
(S.I., 2007, No.
3250)—[Mr.Woolas.]
The
Committee divided: Ayes 8, Noes
3.
Division
No.
2
]
Question
accordingly agreed to.
Motion
made, and Question
put:—
That
the Committee has considered the draft Radioactive Contaminated Land
Regulations (Northern Ireland) (Amendment) Regulations 2007 (S.I.,
2007, No. 3236)—[Mr.
Woolas.]
The
Committee divided: Ayes 8, Noes
3.
Division
No.
3
]
Question
accordingly agreed to.
Motion
made, and Question
put:—
That
the Committee has considered the Radioactive Contaminated Land
(Scotland) (Amendment) Regulations 2007 (S.I., 2007, No.
3240)—[Mr.
Woolas.]
The
Committee divided: Ayes 8, Noes
3.
Division
No.
4
]
Question
accordingly agreed to.
Committee rose at half-past
Five
o’clock.
