Clause
42
Approval
of a
programme
Charles
Hendry:
I beg to move amendment No. 31, in
clause 42, page 38, line 7, at
end insert—
‘(d) Nuclear
Decommissioning Authority,
(e)
relevant local
authority.’.
The
Chairman:
With this it will be convenient to discuss the
following amendments: No. 41, in
clause 42, page 38, line 7, at
end insert—
‘(d) the Nuclear
Liabilities Financing Assurance Board
(NLFAB).’.
No.
32, in
clause 42, page 38, line 14, at
end insert—
‘(d) relevant
local
authority.’.
No.
33, in
clause 45, page 39, line 32, at
end insert—
‘(d) relevant
local
authority.’.
No.
42, in
clause 46, page 40, line 13, at
end insert—
‘(d) the Nuclear
Liabilities Financing Assurance Board
(NLFAB).’.
No.
34, in
clause 50, page 44, line 10, at
end insert—
‘(d) the
Committee on Radioactive Waste
Management,
(e) the Nuclear
Decommissioning Authority,
(f)
the relevant local
authorities.’.
No.
43, in
clause 50, page 44, line 10, at
end insert—
‘(d) the Nuclear
Liabilities Financing Assurance Board
(NLFAB).’.
No.
40, in
clause 51, page 44, line 29, at
end insert—
‘(3) Regulations
may establish a Nuclear Liabilities Financing Assurance Board (NLFAB)
to provide independent scrutiny and advice on the development,
approval, implementation, modification and maintenance of funded
programmes for the designated technical matters mentioned in section
41(5).
(4) The NLFAB
shall—
(a) be appointed
by the Secretary of State;
(b)
report to Parliament annually on the implementation of all funding of
designated technical matters as specified in approved funded
programmes;
(c) review all
programmes on a five year cycle, including coverage of all designated
technical matters specified in approved funded programmes, estimates
for costs for all matters under section 41(5) and of security provided
in connection with those
costs;
(d) give advice on
alternative arrangements where designated technical matters are not
specified in an approved funded
programme.’.
No.
44, in
clause 59, page 47, line 30, at
end insert—
‘(d) the Nuclear
Liabilities Financing Assurance Board
(NLFAB).’.
Charles
Hendry:
We have had an extremely constructive and helpful
debate on the preceding clause, and can probably move through this
group of amendments with greater speed. They relate to the matter of
whom should be consulted in the section where a change or modification
is being proposed. Clause 42(5)
says:
“Before
deciding whether to approve or reject a programme, the Secretary of
State must consult each interested body
about—
(a) the
programme, and
(b) any
modification which it is proposed to make, or any condition it is
proposed to impose,
so far as it
relates to a function conferred on the interested body by or under an
enactment.”
Subsection
(6) sets out which organisations are considered interested bodies. It
mentions the Health and Safety Executive, as well
as
“(b) in
relation to a funded decommissioning programme for a site in England
and Wales, the Environment Agency,
and
(c) in relation to
a funded decommissioning programme for a site in Northern Ireland, the
Department of the Environment for Northern Ireland.”
Amendment No. 31 proposes that the Nuclear
Decommissioning Authority and the relevant local authority be added to
the list.
My
understanding is that reference to the Secretary of State in the Bill
does not specifically include bodies that report to him, such as the
NDA, and it would therefore seem sensible to include a specific
reference, although the Minister dealt in an earlier answer with the
roles of the NDA in relation to these activities. It would also seem
good practice for the local authority to be consulted about proposed
changes. That is also the purpose of amendment No. 32, which would
require the relevant local authority to be consulted before the
Secretary of State approved a programme with proposed modifications or
conditions.
Amendment
No. 33 makes similar changes to clause 45, and would include the
relevant local authority in the list of organisations invited to make
written representations about a proposal to modify a decommissioning
programme. I think it is important to include the local authority, as
these changes could have very significant local implications,
particularly, for example, to transport given the number of lorry
movements if more has to be moved off-site. The local authority should
be given the opportunity to highlight such impacts in a formal
submission before final decisions are
made.
Amendment No. 34
relates to clause 50, and would add other organisations to be consulted
in this process, including CoRWM, the NDA and the relevant local
authorities. These are probing amendments and some of the bodies
mentioned may be included in other ways, but it seems sensible to have
clarity about exactly who will be consulted and under what
circumstances.
Mr.
Binley:
I rise to support my hon. Friend on this vital
issue. He spoke in an earlier debate of the way in which other
countries have tried and succeeded to get local support behind a given
proposal. That exercise will be vital, not only in the creation of new
nuclear power stations, but in the whole decommissioning process. We
all know the type of lurid stories with no foundation in fact that can
easily gain credence at local level and rip through the general
populace like wildfire. They do immense harm before even the process
has begun. We must be aware of that kind of local feeling and the
damage that it can do to a programme of this kind. I fully support such
programmes.
12
noon
I will make a
few points about the amendments. The local population will be consulted
as part of the planning process. I know that the planning decisions
will be taken elsewhere, but it is right to say that those decisions
require, by law, a local consultation. I am always fearful of
consultations specifically about planning. Anyone who has been in local
government carries that fear with them for the rest of their career.
Certainly, I have been scarred on a number of occasions by such
operations. I want a more balanced view to be included in the whole
consultation
process.
My second
point is to ask, if the Minister is minded to believe that local
consultation is vital in a sense wider than merely the planning
process, the level at which it will take place. It seems that the
regional
assemblies have been knocked on the head, to use a Northamptonshire
phrase, and I wonder where that leaves us with regard to local
consultation. My third
point relates to the geographical areas where quangos now control the
planning process. A number of areas are designated, under the
sustainable communities project, in which planning decisions are taken
away from the local authority. I am concerned that we should have a
proper debate that covers the planning process, as I am particularly
concerned that that process does not include elected representative
bodies. Bearing in mind that some of the sites might be in those areas,
we must have a proper ability to talk at local level, which we might
not get if we are consulting only on planning matters. I ask the
Minister to consider that point as part of the appeal for a wider local
consultation.
My final
point is about time frames. I and many others here have suffered the
difficulties of the Post Office consultation, although I do not wish to
draw the Minister into that debate other than to say that many people
in my area felt that the consultation was not well done. In fact, they
felt that it was badly done. In the case of my constituency, the
announcement of closures was made at the end of December but the
Christmas holiday had not been taken fully into account. As we know, we
now have a two-week holiday at Christmas, but the official period is
sizeably smaller. Indeed, a six-week period itself simply was not long
enough.
Given that
there will be some form of local consultation through the planning
process, I ask the Minister to give us an idea as to whether he might
consider the matter again, with a more holistic view of consultation.
My constituents and many others, I am sure, will want reassurance on
the
matter.
Martin
Horwood:
I warm more and more to the hon. Member for
Northampton, South. I am not sure that we agree on many things, but I
agree with him absolutely on the “quangofication” of
planning, where there now seems to be a regime under which Government
inspectors descend from on high to deliver judgment on the future of
local
communities.
Mr.
Swire:
Will the hon. Gentleman give
way?
Martin
Horwood:
The examination in public on the south-west
regional spatial strategy is my least favourite current
example.
Mr.
Swire:
Those are welcome words from the hon. Gentleman. Do
they mean that it is Liberal Democrat official policy to do away with
unelected regional
assemblies?
The
Chairman:
Order. I hope that the hon. Gentleman will not
be tempted to
respond.
Martin
Horwood:
If you will permit me to say, Mr.
Amess, that I have never been in favour of unelected regional
assemblies and would therefore agree with the hon. Gentleman. You are
right to say, however, that we are straying from the point.
The thrust of comments from
Conservative Members is that local authorities should be statutory
consultees in the process and that is a laudable aim. I welcome these
amendments. We seek in amendment No. 40 to add another body that is
strangely absent from the Bill, namely the proposed nuclear liabilities
financing assurance board. We have already explored at some length the
intricacies and the debates to be had over the funded decommissioning
programmes. This new board is supposed to provide, according to the
White Paper,
independent
“scrutiny and
advice on the suitability of decommissioning
programmes”
submitted by
operators of new nuclear power stations. It is therefore a critical
body in the whole infrastructure of financing and decommissioning
programmes that this Bill seeks to create. It is a mystery to me why
this important body is not included on the face of the Bill. The
problem of not having it in the Bill is that it misses out on the
consultation rights that are extended—we now propose to give
them to local authorities as well—already to the Health and
Safety Executive, to the Environment Agency and to devolved bodies. The
fear is that that means that the NLFAB will only be a purely
“advisory body”. That is the phrase used in the White
Paper and the risk is that it will be a watchdog with no
teeth.
The Minister
is obviously a man of enormous integrity who has no intention of
allowing the nuclear industry to be subsidised by the taxpayer. We do
not know, however, who the future Energy Minister will be. Who knows
who will be among his successors? Our amendment would ensure that,
whoever is Energy Minister in the future, is held to the same high
standards expounded by the current Minister. The NLFAB should therefore
be included in the Bill in a more robust and explicit way with specific
statutory rights. These would apply, for instance, before the Secretary
of State decides to approve or reject a programme; before the Secretary
of State can make regulations to disapply decommissioning
plans or formal procedure for modification of funded
decommissioning plans under particular circumstances; and before making
regulations about the preparation, content and implementation of funded
decommissioning programmes. This seems to us to be simply a way of
joining up the Government’s current intentions. If the Minister
really supports the policy that is expounded in the energy White Paper,
he should have no objection to this
amendment.
Malcolm
Wicks:
We have a number of amendments before us and my
speech, following a long debate, will therefore by slightly longer than
I would wish, as some important issues have been raised. I will not
stray into the very clever and ambitious campaign to save Northampton
sub-post offices. This is one of the most unlikely settings for that
campaign and I respect the position taken by the hon. Member for
Northampton, South. Nor will I talk about the south-west regional
spatial strategy, although I look forward to an opportunity to discuss
that.
The
amendments raise important questions about the organisations and bodies
that the Secretary of State should be required to consult when
considering whether to approve or reject a funded decommissioning
programme, a proposed modification to a programme or prior to
making regulations or publishing guidance about the content of a
programme. Under clause 42 of the Bill, prior to making a decision in
relation to these activities, the Secretary of State is already
required to consult the Health and Safety Executive, the Environment
Agency in England and Wales and the Department of Environment for
Northern Ireland. The purpose of that is to ensure that the
decommissioning and waste-management plan that is submitted to the
Secretary of State conforms with the safety and environmental
requirements of the relevant regulatory body. It is also to ensure that
any decision that the Secretary of State might make—for example
to impose certain conditions or additional obligations or equally to
issue guidance—does not adversely affect the existing regulatory
structures for the nuclear industry. To help hon. Members understand
why the NDA, the Committee on Radioactive Waste Management, the nuclear
liabilities financing assurance board and the relevant local
authorities do not have specific responsibilities in the Bill, I
thought it would be helpful to describe briefly the functions of the
NDA and CoRWM, the rationale and intended remit of the NLFAB and the
role that local authorities might play in taking new build
forward.
As well as
being responsible for decommissioning existing power stations and
dealing with the issue of legacy waste, the NDA is responsible for
developing and maintaining a national strategy for handling low-level
waste for nuclear sites. It is also responsible for ensuring the
continued provision of any required waste management and disposal
facility. The NDA is also responsible for carrying out a UK-wide review
of interim waste storage and will consider what may additionally be
required to fulfil the Government’s commitment to ensure robust
interim storage of nuclear materials until such time as the geological
disposal facility is
available.
The
NDA’s work is relevant to new build in relation to taking
forward the geological disposal facility. The NDA is providing input
into the cost-modelling work that will be carried out to enable the
Government to set a prudent fixed unit price for the disposal of new
build waste and spent fuel in the geological facility. The NDA will
also play a role in providing advice and in sharing its expertise in
waste management and decommissioning with potential new build
operators. This advice is likely to be important for operators when
they are preparing their funded decommissioning programmes. It will be
for the operators to seek this advice from the NDA. As the NDA is a
non-departmental public body of which my Department has oversight, we
do not believe there is a requirement for the NDA to have a specific
function in the
Bill.
Amendment
No. 34 proposes that when the Secretary of State seeks to make
regulations or publish guidance under clause 50, he should consult
CoRWM, the NDA and other local authorities. Clause 50 is an important
part of our framework as it enables the Secretary of State to make
regulations and publish guidance about the content, modification and
implementation of funded decommissioning programmes. The regulations
and guidance in relation to programmes have no impact on local
authorities and the scrutiny of programmes is best
placed under the auspices of the NLFAB, so I believe that local
authorities need not be statutory
consultees. CoRWM’s
role is also outside the scope of this Bill. The role of the
reconstituted committee is to provide independent advice to Government
on the long-term management, including storage and disposal, of
radioactive waste. CoRWM’s priority task will be to provide
independent scrutiny of the Government’s proposals, plans and
programmes to deliver the geological repository as the long-term
management option for the UK’s higher activity waste. It does
not have a role in relation to the funding of decommissioning and waste
management, which is what we are talking about today
primarily.
On
the proposed NLFAB, in the nuclear White Paper we gave a commitment to
set up an advisory body to provide independent scrutiny and advice on
the suitability of the decommissioning programmes submitted by
operators of new nuclear power stations. We also indicated that it
would also provide advice to the Secretary of State on the regular
reviews and ongoing scrutiny of funding arrangements. The board is
designed to address both public and industry concerns about the
scrutiny of funded decommissioning programmes.
Responses to
last year’s consultation on the future of nuclear power
demonstrated that there was some public concern over the ability of
Government to ensure that operators of new nuclear power stations pay
their full decommissioning costs and full share of waste management
costs. The board is intended to alleviate this concern by publicly
issuing advice on the suitability of all funded decommissioning
programmes that are submitted to the Secretary of State for his
approval. At the same time, representatives from both the nuclear and
financial industries have expressed concern over the role of the
Secretary of State and about how to ensure that he has access to the
necessary expertise to assist in approving the funded decommissioning
programmes.
To ensure
that there is thorough, comprehensive and consistent scrutiny of
programmes the board will be composed of a broad range experts,
including, we expect, fund managers, financial experts, nuclear
technicians and economists. As we set out in the nuclear White Paper,
we expect that the Secretary of State will draw on the advice of that
board before approving a programme. It is envisaged that the board will
consist of high-calibre people, employed part-time, meeting
periodically as and when programmes are submitted for scrutiny and for
regular reviews of funds when these have been set
up.
12.15
pm
Amendment No.
40 proposes that the Secretary of State should have the power to make
the board a statutory body through regulations. I am glad that hon.
Members recognise the importance of the board in tabling the amendment.
However, the amendment is not necessary.
Mr.
Swire:
Will the Secretary of State or the Minister have
control of appointments to that board? What process will be used for
appointing board members? What remuneration will they receive? Will
there be geographic representation on the board to represent areas
likely to be used for processing, decommissioning or storing nuclear
waste?
Malcolm
Wicks:
The board will be set up according to the now
well-known Nolan principles. It will not just be the Minister or
someone else having their own ideas about who might be helpful; it will
go through the Nolan process. I do not think that a geographical spread
is necessary per se, but I will bear in mind the hon.
Gentleman’s concern. Clearly, we do not want everyone coming
from the same borough in London, so it might be a point that we should
bear in mind, but I do not think that it will be a primary concern. The
expertise that I have mentioned—nuclear expertise and an
interest in funding—is the kind that we are looking
for.
The form of the
board is more suited to an advisory NDPB than a statutory body. I am
convinced that the required advice can be provided without establishing
a full regulatory body. The board will be providing advice on a small
number of programmes. I do not believe that a full statutory body would
offer the taxpayer the best value for money, given the amount of work
that it might expect to do and the fact that it would be providing a
high level of scrutiny on an ad hoc rather than a full-time
basis.
All
parties’ interests are in having an independent body. Operators
will want to ensure that the body applies its judgment in an open and
consistent way. Likewise, those concerned about new nuclear will want
to ensure that the framework is best applied in a rigorous and
transparent manner. It is our intention to make the reports produced by
the NLFAB publicly available, so I am sure that those involved with the
board will want to ensure that their advice is rigorous and
independent. An example of an effective advisory NDPB in the nuclear
policy field is the previously mentioned Committee on Radioactive Waste
Management—CoRWM. It has proven effective in providing
independent advice to the Government. The work that CoRWM has done and,
no doubt, will continue to do shows that a body independent of
Parliament can provide the level of scrutiny advice needed. It is that
precedent that forms the basis for our proposal to create the new
board.
As an advisory
and not a decision-making body, I do not believe that the NLFAB should
be subject to parliamentary scrutiny. The board will be advising on
whether a programme is robust enough to achieve its objectives within a
framework set by the Government. The framework that we are putting in
place will create the parameters in which operators will have to work
and it is those parameters that should be scrutinised by Parliament,
together with regulations made by Parliament. It is not for Parliament
to directly scrutinise that way in which operators implement their
programmes within the framework. After all, they are private companies.
Such scrutiny is the responsibility of the Secretary of State assisted
by the relevant parties. The board will advise on the exercise of
functions by the Government, in particular the Secretary of
State’s decision whether to approve a programme, not on the
exercise of functions by Parliament.
As for the input that local
councils should have in the matter that I set out earlier, it is
important to understand the role that they have played in the past in
the development of nuclear power stations and the role that the
Government envisage local councils playing in the development of new
nuclear. In the past, the planning process for nuclear power stations
and other
large-scale energy projects has been inefficient, costly and lengthy. In
some cases, it may not have provided sufficient opportunity for the
consideration of local issues because the process has focused largely
on dealing with broader national issues, for
example. The Planning
Bill proposes a new consent regime for nationally significant
infrastructure projects and the Government will produce national policy
statements that establish the national case for infrastructure
development and set the policy framework to be used by the new
infrastructure planning commission. National policy statements will be
subject to public consultation and the Planning Bill sets out the
procedures for producing them. Decisions on applications will be made
by the IPC, which will manage inquiries and take decisions on
applications for nationally significant infrastructure projects,
including proposed nuclear power stations. The relevant local
authorities will have an opportunity to comment on specific matters
relating to the proposal to build a nuclear power
station.
The new IPC
process will focus on specific local aspects of the application rather
than the national need for the proposal. That will include discussion
and consideration of the impact that a power station might have on the
local community. It is only right that once a new nuclear power station
is proposed, local authorities should have a say in its development. We
believe that it is during the planning process that local authorities
should have a formal role, not during the consideration of a funded
decommissioning
process.
Charles
Hendry:
The clause does not relate to the process for
approving nuclear power stations, but proposes the decommissioning
package. The amendment on local authority involvement relates to
approving a programme with modifications or conditions. Is the Minister
saying that a local authority could simply discover that the Secretary
of State had announced modifications or conditions without consulting
it or letting it have any
input?
It could be
decided, for example, that rather than storing a mound of spoil on
site, it will be removed and disposed of elsewhere. In such
circumstances, there will be significant pressures on the local
infrastructure. Surely the local authority would be consulted. That is
why we are suggesting that the local authority should be a statutory
consultee on modifications and
changes.
Malcolm
Wicks:
Let me continue and see if I can satisfy the hon.
Gentleman. I believe that it would be wrong for local authorities to
comment on the contents of funded decommissioning programmes. Local
authorities will quite rightly be concerned with the safe operation of
the power station, but the detailed financial considerations that these
clauses cover is quite a different
matter.
I am aware
that the operators of existing nuclear power stations go to great
lengths to engage with local authorities and communities on matters
that affect them. While I cannot speak for the future, I imagine that
new operators will continue that process and engage local authorities
on local issues concerning new nuclear power stations. Nevertheless, I
will reflect on what the hon. Member for Wealden has said to
ensure—not meaning it rudely—that there is not a
substantive issue that I need to address. I will take further advice on
this
issue.
Anne
Main (St. Albans) (Con): I am intrigued by the
Minister’s statement about nuclear operators liaising with
communities and local authorities. Given the ongoing legacy that some
of these depositories may create for a community, what are the
Minister’s views on education and ongoing engagement with such
communities? He felt reassured, having seen a depository in operation.
How is education for the local communities that are expected to take
these depositories factored into the
equation?
Malcolm
Wicks:
On visiting one or two nuclear installations in the
UK and the one that I have mentioned in Finland, I have been impressed
with the links to local schools and communities. Nuclear power stations
seem to have very good connections with local communities. That should
hardly be a surprise, because they are often a major employer in the
community and have large, skilled work forces that may include members
of the local council. I have heard a great deal about outreach in
education; enabling school children to come in and so on. I have no
reason to believe that that will not continue. It is in the interests
of those companies to enable children and their parents to learn more
about new nuclear—they will provide part of a future work force.
I have been impressed by what I have seen already. I am sure that that
will
continue.
Mr.
Binley:
I thank the Minister for his generosity. He has
been immensely kind. May I delve more deeply into the issue of quango
planning authorities, which are gaining some precedence throughout the
nation, particularly in my part of the world? They report to a regional
body, which is chaired by a Minister. They are seen as part of the
machinery of government. There is some concern about the impression
that the Government do not want local involvement. It is eminently
sensible for the Government to be seen to be wanting local involvement
and for the local voice to be heard properly and fully. Will the
Minister comment particularly on the question of those supra-local
planning authorities, which have been set up recently and the
credibility of which seems to have been growing in government
circles?
Malcolm
Wicks:
I will not venture too far down that path, because
I could trespass into other territory, which our vigilant Chairman
might well rule out of
order.
To reiterate,
when there is a proposal for a power station, which will now come under
the auspices of the new IPC, it is right and proper that local people,
groups and authorities have the opportunity to comment on local issues.
That will continue to happen. It is generally appropriate for the power
station to have good links with the local community, which was the
burden of the question of the hon. Member for St. Albans. The point
that I am still puzzling about is that made by the shadow Minister,
which he may want to come back on, so that I get it fully. If, as part
of a
change to the decommissioning plan, something might legitimately affect
the local community—I am not sure what that might
be—should the local authority have any involvement? I would like
to tease the issue out a bit more with the hon.
Gentleman.
Charles
Hendry:
I am not sure whether this is an intervention or a
speech, nor how long I am allowed to speak. My concern was that the
Minister put the emphasis on “funded” decommissioning
programme. It is not so much the financing of that package, which I
totally understand is not a matter for the local authority, but any
change or modification to the decommissioning programme itself. In some
circumstances, that would not have an impact beyond the site where it
was happening, but in some cases it is possible that there would be an
impact on a local community. I particularly mentioned the transport
infrastructure. A modification may involve a great deal of movement of
material off site or other changes of that nature. Clearly, on some
occasions it would be appropriate to involve the local authority in the
process. Local authorities ought to have the right to be involved as a
statutory consultee, rather than simply discovering that a modification
has been put through by the Secretary of State, on which it had no
chance to
comment.
Malcolm
Wicks:
That is a perfectly reasonable question—I do
not always follow my lines to take. I would like, with the approval of
the hon. Gentleman and the Committee, to take some time outside the
Committee to reflect and to see whether there is a substantive issue
here that we need to
address.
Charles
Hendry:
I am grateful for the Minister’s reasonable
and thoughtful approach. Clearly, it is not appropriate to include the
references to the NDA, as we did in the amendment. Also, I understand
why CoRWM would be dealt with separately. I am grateful for his offer
to reflect further on the subject and happy to have further
conversations about it. We might return to the issue on Report. In the
light of those assurances, I beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
12.30
pm
The
Chairman:
The debate has obviously been wide-ranging, so
there will not be a separate stand part
debate.
Martin
Horwood:
On a point of order, Mr. Amess, I
would like the opportunity to move amendment No. 40, which is in the
group, if that is
possible.
The
Chairman:
That is perfectly in order. I wondered whether
the hon. Gentleman wanted a Division on amendment No. 40. We are now
coming to amendment No. 45. The hon. Gentleman can move amendment No.
40, but at a later
stage.
Martin
Horwood:
On a point of order, Mr. Amess, I
understand totally why you do not want to have a clause stand part
debate, but I have a couple of questions that would help us to
understand the detail of the clause, so is it appropriate to ask
them?
The
Chairman:
The hon. Gentleman is entirely right, and I
suppose that I should have made it clearer. We are now going to debate
amendment No. 45, and it will be entirely appropriate for him, and
perhaps others, to raise points in the
debate.
Martin
Horwood:
I beg to move amendment No. 45, in
clause 42, page 38, line 21, at
end add—
‘(11) The Secretary
of State must not approve a funded decommissioning programme if it
includes any proposal to limit the liabilities of the operator, or a
body corporate associated with the person who submitted the programme,
should cost estimates
change.’.
I
am not sure whether this ought to be a point of order, but I hope to
reply to some of the points that were made in the debate on the group
including amendment No. 40. I was grateful for the Minister’s
welcome for amendment No. 31, which was tabled by the Conservatives,
and the associated amendments, and I welcome his agreement to reflect
on those. I was much less reassured by his comments on our amendments,
and we will therefore press them to a vote when the moment
arises.
Amendment No.
45 was initially something of a probing amendment to explore the impact
of the long-term variability of the costs of decommissioning programmes
and the impact that that would have on the original base case
calculations. We have explored that issue on a number of occasions, so
I shall keep my comments on the amendment relatively brief. The focus
is on the challenge of accurately forecasting the costs of
decommissioning and how we adjust what starts as the base case to take
account of variable costs. The Minister mentioned Finland as an example
of an attempt to calculate those, but the Finnish example is a good one
because the costs are overrunning spectacularly, as is the time scale.
Hon. Members have pointed out the technical difficulties of looking at
the costs of what might be a dying industry if no other Governments
join us in the rush towards new nuclear. In the White Paper, the
Government said that they
planned
“to use the
exercise on waste cost modelling to set a fixed price or upper limit
for nuclear operators. This price would be set at a high level,
including a material risk premium over and above expected
costs.”
The
Minister has already referred to the risk premium mechanism, so the
amendment simply seeks to join up different parts of the Bill and make
it absolutely clear that the Secretary of State would not approve a
funded decommissioning programme if it included any proposal to limit
the liabilities of the operator or a body corporate associated with the
person who submitted the programme should cost estimates change. If
that is the Minster’s intent, as he has repeatedly suggested in
our discussions, I once again see no reason why the Government should
object to the
amendment.
Charles
Hendry:
The hon. Gentleman has raised some interesting
points, and I look forward to the Minister’s clarification. I
wonder whether the Minister might also take account of a couple of more
general issues. Subsection (8) states that the Secretary of State
cannot
“reject a
programme without informing the site operator of the reasons for doing
so.”
How will that be done—by means of a
meeting or a letter? What will the process be? Specifically, will it be
made public and will there be a right of appeal against that
decision?
Clause 42(9)
says that the Secretary of State must act “without unreasonable
delay”. That is vague terminology. We could be looking at a
nuclear programme that goes back 15 years. Is there a legal definition
of “unreasonable delay”? Greater clarity is
required.
Malcolm
Wicks:
I thank the hon. Member for Cheltenham for moving
the amendment and I thank the hon. Member for Wealden for asking two
questions. I will try to reply without unreasonable delay, but I will
not define what I mean by that at this precise
moment.
It is helpful
to discuss the amendment in the context of the clause. To clarify,
clause 42 allows the Secretary of State to approve, approve with
conditions or modifications, or reject a funded decommissioning
programme. In approving the programme either with or without
modifications, unconditionally or subject to conditions, the Secretary
of State is required to ensure that prudent provision is made for
technical matters and for the financing of designated technical matters
that are set out in the programme. In determining whether to approve
the programme, the Secretary of State would have regard to the factors
set out in guidance published under clause 50(6). That guidance will
help operators to understand more fully what issues the Government
expect to be covered in a funded decommissioning programme if it is to
be
approved.
Before
approving a programme, the Secretary of State is required to consult
with the Health and Safety Executive, the Environment Agency in England
and Wales, and the Department of the Environment for Northern Ireland.
Those are known as interested bodies and, if I may, I will refer to
them in that way for the purpose of the debate. The purpose of
consulting with the interested bodies is to ensure that the technical
plans submitted to the Secretary of State conform to the safety and
environmental requirements of the relevant regulatory body. The
Secretary of State can, if necessary, require a modification to a
programme that has been submitted for approval, or impose a condition
on it. The clause requires that, before imposing that modification or
condition, the Secretary of State give any person who would be subject
to the proposed modification or condition an opportunity to make
written representations about it. That will give those persons affected
the opportunity to comment on the proposal and, where necessary, put
their case as to why the proposed modification or condition should or
should not be made.
Although the Bill does not
require it, the Secretary of State would consider any written
representation received. By placing the Secretary of State under a duty
to allow operators and others to make written representations, it is
implicit that the Secretary of State should have regard to
representations made when taking his decision. The Secretary of State
cannot reject a programme without informing the site operator of the
reasons for doing so. To reduce uncertainty, the Secretary of State
must make a decision whether to approve a programme “without
unreasonable delay”. We might come on to that
point.
Anne
Main:
The Minister mentions representations from
interested parties with regard to accepting a proposal. Does he allow
negative representations or only those that are in support of a
proposal?
Malcolm
Wicks:
I shall return to that important question in due
course, if I may.
The
amendment seeks to prevent the Secretary of State from approving a plan
which limits an operator’s liability under a funded
decommissioning programme, in the case of rises in cost estimates. I
will set out our overall policy approach on those issues, and on the
basis of that I will go on to explain why the proposed amendment is
unnecessary and would not be compatible with our overall
approach.
We have made
it clear that it is our policy that owners and operators of new nuclear
power stations must cover the full costs of decommissioning and their
full share of waste management and disposal costs. In the draft
guidance on funded decommissioning programmes, we state that operators
will be expected to reassess periodically their estimates of costs, and
ensure that any increases are factored into an increase in the target
amount of moneys that they will accumulate in their fund.
Operators’ estimates of costs will be subject to scrutiny from a
number of sources, including from those responsible for the independent
fund and from the new independent advisory board, the NLFAB. The
operator will be responsible for making good any shortfall or risk of
shortfall in the accumulated funds held by the fund identified by the
various elements of
scrutiny.
In the
nuclear White Paper we set out our intention to set a fixed unit price
to operators for the disposal of intermediate-level waste and spent
fuel. The fixed unit price will give operators certainty on their costs
to enable them to take investment decisions and to seek financing. But
we will not set this price at the expense of the taxpayer. It is worth
emphasising that the fixed unit price relates only to the disposal of
intermediate-level waste and spent fuel. I sought to clarify that point
earlier. It does not relate to the costs of decommissioning or other
waste management costs such as the management and disposal of low-level
waste.
It is right and
proper that the Government should bear the risk of building a
geological disposal facility, as we would need to do this to dispose of
our legacy of waste, regardless of the position on new build. As it is
both desirable and technically possible to dispose of new-build waste
in the same facility as legacy waste, new-build operators will have no
influence over the project to deliver the geological disposal facility.
It is therefore right that they should not bear open-ended risks in the
event that there are cost overruns on the
project.
Steve
Webb:
I just want to get a feel for scale. One of my
problems with the Bill is that, although I understand the concept of a
risk premium and a cost, as an economist I like to know how many zeros
there are on the end of any number. So may I ask the Minister one of my
“how many zeros” questions? In a typical new nuclear
plant, how many noughts would there be in the typical costs that came
under the scope
of one of these funded decommissioning plans? Would the risk premium be
double? Would there be a 100 or a 10 per cent. margin? What scale are
we talking
about?
Malcolm
Wicks:
There are quite a few noughts, but I shall be even
more specific as we progress. How specific we shall have to wait and
see. It cannot be a definitive
number.
It is equally
right and proper that operators should pay for the certainty that they
will get over the costs of the disposal of their intermediate-level
waste and spent fuel. The fixed unit price will be set at a level over
and above expected costs and will include a significant risk premium. I
think that that is what prompted the hon. Gentleman’s question.
The fixed unit price that the Government will set for operators of new
nuclear power stations for disposing of their intermediate-level waste
and spent fuel will be based on an estimate of the costs of disposing
of these materials in a geological disposal facility. It will be fixed
at the outset and will not be subject to change, although it will be
escalated over time, in line with predetermined factors such as
inflation.
The fixed
unit price will include the following items: estimates of the cost of
disposing of intermediate-level waste in a geological disposal
facility, including a contribution to the fixed costs of the facility;
estimates of the costs of disposing of spent fuel in a geological
disposal facility, including a contribution to the fixed cost of the
facility. There is a danger that the hon. Gentleman might simply have
thought that I was repeating myself when in fact I wanted to emphasise
to a sceptical Liberal Bench both the importance of our policy and the
importance of proof-reading. The significant risk premium will cover
the risk that the eventual costs of building a geological disposal
facility to dispose of intermediate-level waste and spent fuel are
higher than estimated and the risk that geological disposal facilities
are not available when required by the agreed schedule for the
Government to take title to and liability for the waste.
We are developing a methodology
for establishing a fixed unit price. We will test this methodology with
the financial industry to ensure that we make use of the best available
expertise on how to price risk properly. We have begun work to update
our estimates of the cost of decommissioning and waste management for
new nuclear power stations and more information on these issues is set
out in the consultation published on 22 February. This, along with the
NDA’s exercise to estimate the costs of geological disposal,
will be key in determining the appropriate level for the fixed unit
price. Our cost estimates are being built using the best available
information and data and, more importantly, tested by external experts.
Therefore, I cannot be as precise as the hon. Gentleman was tempting me
to be. I will see if I can be helpful
later.
12.45
pm
I do not
believe that the amendment is either necessary or compatible with the
approach that I briefly described, and I will therefore ask the hon.
Gentleman to consider withdrawing it. Before I sit down, however, I
will try to be helpful about the concept of “unreasonable
delay”, which he felt to be vague.
We do not consider the term
vague. It also applies in relation to decommissioning of offshore oil
and gas installations and offshore renewable installations. It is not
defined in the legislation or in any other legislation. That may not
seem to the hon. Gentleman to be the most powerful argument that I have
put to him today. However, I am not aware that the lack of definition
has caused any difficulty in the context of the other legislation. That
is the clincher. I will try to come back to the hon. Gentleman to see
whether, in
comparison—
Charles
Hendry:
Will the hon. Gentleman give
way?
Malcolm
Wicks:
I am in the middle of a very strong argument here,
so I am delighted to give
way.
Charles
Hendry:
I thought a modest intervention might give the
Minister a chance to gather some even more useful arguments explaining
why this is not the right way forward. The hon. Member for Northavon
has said that he is an economist, and likes a bit of clarity with his
noughts. Perhaps the Minister could give us an idea of whether we are
talking about two weeks, 10 weeks, a year or two years. It has not yet
been tested through the courts, so there is no legal definition, but
the Government must have in their own minds a definition of
“unreasonable
delay”.
Malcolm
Wicks:
I will try to be helpful, albeit after a little
delay, and perhaps not this morning. It is a perfectly reasonable
question, and the hon. Gentleman is a reasonable man who will realise
that, despite the comparisons with oil, gas and renewables, this is
uncharted territory. He is entitled to a more specific answer, which I
will work on during the lunch hour. I have dealt as best I can with
issues relating to the fixed price for waste disposal costs. If I can
add more this afternoon, I will do
so.
The hon. Member
for St. Albans—Verulamium—asked whether representations
could include negative representations. The answer is yes.
Occasionally, I can be very clear in my answers, and am delighted to be
able to do so. The hon. Member for Wealden asked how the Secretary of
State would tell an operator that he would not approve a plan. It will
be through discussions with the operator and then, formally, in
writing. The Secretary of State will set out reasons. He will make
decisions based on advice from our new advisory board. No formal appeal
from the operator will be allowed, but the operator can of course
resubmit the programme. I hope that that will be considered
reasonable.
As
for the cost of decommissioning a new nuclear power station, we set out
in the consultation document an estimate of £600 million. Waste
disposal costs were estimated to be £300 million. However, we
have been working to update estimates of the costs of waste management
and decommissioning. In the consultation on funded decommissioning
programme guidance, we published the cost modelling methodology that we
have developed, and we envisage being able to publish revised estimates
towards the end of 2008 or in the first quarter of 2009. That is rather
more precision about the noughts than I thought at one stage I would be
able to give to the hon. Member for Northavon.
There are one or two issues that
I have not been able to cover, but I hope to catch your eye,
Mr. Amess, and deal with them in due
course.
Martin
Horwood:
I am afraid we have found that, as with amendment
No. 40 and the associated amendments, we have a rather frustrating
situation with regard to amendment No. 45. That amendment seems to us
to be in line with Government policy, if Government policy really means
what it says. It seeks to add absolute transparency to the Bill, to
ensure that it is clear that the taxpayer will never again be liable
for the kind of cost miscalculations and spiralling subsidies that
characterised the first generation of nuclear power stations.
Amendment No. 45 seeks to
address the crux of that argument by making it absolutely clear that
the Secretary of State should not approve a funded decommissioning
programme if it in any way limits its liabilities. We have discussed
the issues, how difficult it is to calculate the costs, the Paris
convention and so on, and yet the Government will not include this
fundamental rule in the Bill, even though they seem to aspire to it in
principle.
I am
afraid that, on this occasion, as with amendment No. 40, I will be
pressing amendment No. 45 to a
Division.
Question
put, That the amendment be
made:—
The
Committee divided: Ayes 2, Noes
13.
Division
No.
2
]
Question
accordingly negatived.
Clause 42 ordered to stand
part of the
Bill.
The
Chairman:
I said first the “Ayes have it”,
but it was a Freudian
slip.
Malcolm
Wicks:
That was almost the Liberals’ finest moment
for 100
years.
Clause
43
Prohibition
on use of site in absence of approved
programme
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
We can possibly now make some faster progress,
having had a number of useful debates. Clause 43 will ensure that any
person operating a new nuclear power station without an approved funded
decommissioning programme in place or allowing
another person to do so will be committing a criminal offence. The
penalty for such an offence will be a fine not exceeding the statutory
maximum—currently £5000—in the magistrates court,
or up to two years’ imprisonment or an unlimited fine in the
Crown court.
The
purpose of creating this criminal sanction is to ensure that robust and
prudent programmes are in place before operators start building or
operating new nuclear power stations. Putting in place approved
programmes at this stage should ensure that the operator takes full
responsibility—meeting the costs of decommissioning and waste
management—and that the prospect of recourse to public funds is
remote at all times. This is the fundamental objective of our policy.
The penalties for committing this offence mirror those contained in
section 40 of the Petroleum Act 1998, which governs the failure to
submit an abandonment programme for the decommissioning of oil and gas
installations. The same penalties are also contained in section 113 of
the Energy Act 2004, which governs off-shore renewable decommissioning
programmes. It should be noted that the provisions will complement
existing legislation and conditions that apply to existing nuclear
power stations. Section 1 of the Nuclear Installations Act 1965, which
sets out offences and penalties for contravening requirements in
relation to the use of a site, and the Health and Safety
Executive’s nuclear site licence conditions will apply to new
nuclear power stations just as they do to existing ones.
Question put and agreed
to.
Clause 43
ordered to stand part of the Bill.
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