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19 Nov 2008 : Column 117WH—continued
Through HLOS, the Government have set out, for the first time, the amount of money that they are committing to the railway between 2009 and 2014. Critically, it also sets out the expected returns on that substantial investment of £15 billion. Major projects, such as the £5.5 billion Thameslink scheme, the £600 million for the Birmingham New Street and Reading stations and improvements to track and infrastructure across the network, will help to meet those immediate and medium-term goals. Although the railway is safer than ever and reliability better than it has been for several years, despite the railway carrying more people and being used much more intensively, we have specified further improvements. By 2014, reliability will be 92 per cent.
My hon. Friend the Member for Stafford, and others, mentioned their personal experience of some of the improvements made on lines—for example, the speed of some trains has increased from 110 mph to 125 mph. The other week, I was with a Birmingham chamber of commerce, where it was recognised that the service between Birmingham and London is second to none and that the journey time has reduced substantially—by some 20 minutes. I recognise that the west coast main line upgrade has caused some upheaval to the travelling public, especially at weekends, but out of it will come a far more reliable, effective and efficient service.
My hon. Friend referred to rail links. I can confirm that they exist—for example, from King’s Cross, on the north London line, and on the west coast main line at Willesden. He also referred to open access to Eurotunnel, which has agreed lower rates for rail freight, and he will also know that English Welsh & Scottish Railway Ltd has started running new intermodal and automotive services by utilising that potential. In addition, in showing our support for rail freight—we want to see it grow substantially in the long term—we have agreed that British Railways Board will continue to pay the UK allocation of Eurotunnel’s fixed costs and to invest some £200 million in the development of the rail freight network.
I assure my hon. Friend that I shall draw Lord Adonis’s attention to this debate, and, to pick up on his concluding remarks, I promise that we have no intention of returning to steam trains. The success and growth of Eurostar patronage was well documented by statistics released in November, and we welcome those improvements.
My hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) referred to changes that he has observed and his desire for further such developments. Part of the £15 billion investment strategy will be to improve train times. Some 130 stations already have through ticketing, but of course that is a work in progress, and we will continue to introduce new technologies to take advantage of greater opportunities.
Mr. Peter Atkinson (in the Chair): Order. We must move on.
Nuclear Industry Finance
4 pm
Paul Flynn (Newport, West) (Lab): This is a lamentable saga of a breakdown of parliamentary accountability on nuclear industry finances. It is a matter of the gravest importance, involving the most hazardous nuclear site in the country and huge sums of money. Initially, the contract was worth about £7 billion—£1 billion a year—but eventually it could cost up to £93 billion.
The Government have been bewitched by the pied piper of nuclear power, just three years after deciding that nuclear power was financially an unattractive prospect. They are now uncritically embracing it as a panacea. That might explain the disgraceful events that have taken place. It may also be a subterfuge to bury embarrassing news on the continuing saga and the enormous cost of the nuclear legacy, and also to disguise the fact that the Government are dumping a potential multi-billion pound liability on the taxpayer in a wholly unwarranted and possibly illegal new subsidy for the nuclear industry.
All hon. Members except two have been denied any chance of commenting on the policy, which is a parliamentary outrage. Early-day motion 2321, which was signed by more 30 hon. Members, asked for action on the matter.
On 14 July, my right hon. Friend the Member for Croydon, North (Malcolm Wicks)—I am delighted to say that he is in his position today—wrote to the Chairman of the Public Accounts Committee, and sent a copy to the Chairman of the Business, Enterprise and Regulatory Reform Committee, in which he set out the proposed arrangements for a public sector supported nuclear indemnity for the winner of the competition for the parent body organisation to take over the management of the massive Sellafield site. He inserted, inter alia:
“Given the low probability of a claim being brought, the Nuclear Decommissioning Authority has assessed that the benefits of engaging a contractor will far outweigh the small risk that the indemnity may be called on.”
He said, “small risk”. That is a key issue. The risk was so serious that the main contractor said publicly that without the indemnity his company would withdraw from this very lucrative contract. He said that it was not prepared to take on the insurance risk. The Minister’s letter also said:
“I am placing a copy of this letter and the Departmental Minute in the Library of the House.”
The Minister placed the letter in the Library, but not on 14 July. It appeared in the Library on 15 October —75 days after the final date on which hon. Members could object. As hon. Members have only two working weeks in which to comment on such departmental minutes, that effectively meant that no MP, other than the two Committee Chairmen, had sight of the minutes within the specified period. That alone should invalidate any subsequent attempt by Ministers to push ahead with the concluding transfer of the management contract for Sellafield. None the less, they concluded the contract on 6 October, the first day that Parliament resumed after the summer recess.
Yesterday, in our splendid debate on the feed-in tariff, I heard the Minister talking about how slowly Parliament moves on many desirable objectives. However, in the
case of nuclear, the Government move with the speed of a striking cobra. When it comes to renewables, their actions are very similar to that of an arthritic sloth, yet speed was of the essence in this matter.
By coincidence, I tabled a detailed question to the Minister on 14 July. I asked him
“what recent communications or discussions (a) he, (b) other departmental Ministers and (c) officials, have had with (i) the Nuclear Decommissioning Authority and (ii) consortium applicants for the Sellafield decommissioning contract on the indemnification of the contract holder against claims arising from property damage, the cost to human health, or the cost of measures of reinstatement of any significantly impaired environment in the event of an on-site accident or other incident resulting in the dispersal of radioactive materials off-site.”
Therefore, the Department should have been well aware of my interest and possibly that of other hon. Members. The reply came back, which said, inter alia:
“It would not be viable for any of the bidders to proceed without an indemnity because any fee earning benefits of the contract would be overwhelmed”—
“by the potential liabilities. The NDA has assessed that the benefits of engaging a new contractor far outweigh the remote risk that an indemnity might be called upon”—[Official Report, 14 July 2008; Vol. 479, c. 76W.]
The Minister chose not to inform me at that time—this was in July again—that he had written to the Chairmen of the two Select Committees and that he had not put the departmental minute in the Library. Perhaps the Minister could explain why that was the case.
I pursued my inquiries. I tabled a question on the insurance indemnification and asked what the financial value was of the insurance indemnity. The answer said:
“While the impact of any call on the proposed nuclear indemnity could be very high, there is an extremely small possibility only of the indemnity ever being used, and it is therefore not possible to put a meaningful financial value on the indemnity.”—[Official Report, 22 July 2008; Vol. 479, c. 1146W.]
May I gently suggest to the Department that the reason why it cannot put a value on the risk is not because the risk is small, but because the liability is enormous, given the cost of clearing up after any nuclear accident? Now, that responsibility is being put on the backs of taxpayers, because neither the contractor nor commercial insurers will accept the risk.
On 28 August, during the recess, I again wrote to the Secretary of State to find out what was happening with the PBO transfer. I said:
“When does the Government intend to place a similar departmental memorandum”—
to the one that accompanied the Drigg PBO transfer in February—
“before Parliament.”
I also asked him whether he would place into the public domain
“all the correspondence”—
including letters, e-mails and memorandums—
“between ministers or officials in BERR and the NDA in regard to the indemnification for Sellafield.”
That has never been done. I ask the Minister to do that now.
In response to my further inquiries and to my point of order on 22 October, I received a further reply from the Minister. He talked about the schedule for evaluation
of the PBO bids provided for the announcement of a preferred bidder on or around 11 July. He went on to talk about the rigour of the programme that had been carried out. He was not very convincing. The Minister also said that there was no scope for slippage in the contract, because it would cause problems if a new contractor had to be found for Sellafield.
The Department for Business, Enterprise and Regulatory Reform circumvented the usual procedures in place to inform Parliament, and privately wrote to the two Select Committee Chairmen instead, and failed to lodge the minute. On the same day as the Minister’s letter to me, 27 October, the Chairman of the Public Accounts Committee—a greatly respected senior MP—wrote to the Secretary of State saying that the guidance to Ministers in the manual “Managing Public Money” is unequivocal. He cited the relevant extract:
“It is essential to give Parliament prompt and timely notice of any significant commitments, including contingent liabilities into which the Government intends to enter.”
The Chairman also said that the Public Accounts Committee will feel that the period for objection should be reopened. That is the same view as that of those who signed the early-day motion.
Mr. Andrew Smith (Oxford, East) (Lab): I commend my hon. Friend’s forensic work on the issue and support his call for full and transparent accountability in respect of Sellafield, as well as for any financial support from taxpayers or consumers for future nuclear power, whether through subsidies or more covertly through indemnities or guarantees, none of which, on his evidence, would be in the public interest.
Paul Flynn: I am grateful for that intervention, and I agree entirely with the points made.
Things get even more worrying in the rest of the Secretary of State’s letter of 3 November. He admitted that hon. Members had not been informed due to “an administrative error”, but then went further, seemingly denying his own claim and—this is rather alarming—attempting to justify the strategy of circumventing appropriate parliamentary scrutiny. He said:
“‘Managing Public Money’ sets out two procedures for notifying an impending indemnity—notifying the House or writing to the Chairs of the relevant Committees. These are alternates.”
That is the letter that he wrote challenging the Chairman of the Public Accounts Committee.
I believe that what the Secretary of State said and his interpretation lay down a precedent for future policy. We must resist the idea that something of enormous cost and importance—a huge burden on taxpayers now and in the future—need not go through parliamentary scrutiny, but that one or two Select Committee Chairmen can place a tick on it. It is an extraordinary usurpation of the rights of parliamentarians to suggest it, but that is what he is saying:
“These are alternates. In this case we wrote to you”—
that is, to the Chairman of the Public Accounts Committee—
“instead of notifying the House, undertaking to withhold final approval to proceed”
Of course, there was a reply. The Chairman did not object, and so the process continued. The Secretary of State said:
“No objections were raised and you confirmed in your letter to Malcolm Wicks of 22 July...that you had no objection to the Department’s proposal”.
What about all the rest of us? Many of us did have objections. It was clear from the flow of parliamentary questions—I have quoted mine alone, but other people have been involved—that we had no opportunity whatever to object, because we did not know that the minute was there until 75 days after the period of objection. I am sure that hon. Members present will agree that that is an utterly unacceptable rationalisation of something that was at best a foul-up, but looks more like a cover-up.
I would like to draw attention to the question of risk and how serious it is. The Washington-led management consortium URS was reticent to take over the insurance for Sellafield because, as its representatives said in a public meeting, it is highly hazardous and a very dangerous nuclear site. Who says so? In October 2006, Justice Openshaw presided at the trial of British Nuclear Group for a processing accident at its Thorp site. His conclusion about the hazards of Sellafield was:
“By reason of its huge scale, its nature and its complexity Sellafield...is the most significant and potentially the most hazardous nuclear site in this country.”
Even the British Nuclear Group’s own board of inquiry report on the incident, which involved something called a feed clarification cell, stated:
“Given the history of such events so far, it seems likely that there will remain a significant chance of further plant failures occurring in the future”—
“even with comprehensive implementations”
of the report’s recommendations. BNG decided to change the system, but said that the risk was still there.
There are extraordinary statistics, including in the memorandum submitted to the Select Committee on Defence in January by the international nuclear safety expert Dr. Gordon Thompson, executive director of the Institute for Resource and Security Studies. He said that
“the B215 facility at Sellafield...houses 21 steel tanks”.
4.15 pm
Sitting suspended for a Division in the House.
4.25 pm
Paul Flynn: From the evidence given by Gordon Thompson, the nuclear specialist, to the Defence Committee, I want to give one example of the danger of Sellafield. He described the amount of high-level radioactive waste there as containing
“about 8 million Terabequerels...of caesium-137”.
He went on to say that, by comparison,
“the 1986 Chernobyl reactor accident released to the atmosphere about 90,000 TBq...of caesium-137”.
At the time of the Chernobyl accident, we were assured that it was a mild risk, and yet the sheep in north Wales that were contaminated 22 years ago are still under
control orders now. To put it another way, there was 27 kg of caesium-137 at Chernobyl; there is 2,400 kg at Sellafield.
No doubt the company that took over these consortiums exercised due diligence before reaching the conclusions that it did. Hon. Members of all parties should collectively regard what has taken place since then as unacceptable, sharp and evasive practice in a modern parliamentary democracy.
I urge the Minister when he replies to put away any prepared notes that he has and just respond to these points: I ask him to commit Her Majesty’s Government to suspending the current contract between the Nuclear Commissioning Authority and the new USR Washington-led parent body organisation, or PBO; I ask him to look again at the subsidy that is being paid and to check that it is within European rules; I ask him to postpone the planned go-ahead on 24 November until such time as the House has had the opportunity to scrutinise in detail all the financial implications for taxpayers of this indemnification procedure; and I ask him to set up a fully independent examination of Sellafield’s risks and insurability.
Finally, the series of events that I have just described besmirches the good name of Parliament by contemptuously disregarding the rights of parliamentarians. The Government and the nuclear industry cannot bury the true cost of nuclear power. It is our responsibility to clear up that mess, but they must be open and transparent. In their plans for future nuclear operations, they have tended to disregard the vast cost of nuclear waste and, in this case, the insurance that is an essential part of that cost. I urge the Government and the nuclear industry to face up to their demons and ensure that the industry pays its full costs.
Mr. Peter Atkinson (in the Chair): Order. Before I call the Minister, I inform hon. Members that this debate will now end at 4.42 pm, subject to there not being another Division in the House.
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