 House of Commons |
Session 2007 - 08 Publications on the internet General Committee Debates Energy |
Energy Bill |
The Committee consisted of the following Members:Chris Shaw, Committee
Clerk
† attended the
Committee
Public Bill CommitteeTuesday 4 March 2008(Afternoon)[Mrs. Joan Humble in the Chair]Energy BillClause 44Modification
of approved
programme
Question
proposed [this day], That the clause stand part of the
Bill.
4
pm
Question
again
proposed.
Charles
Hendry (Wealden) (Con): Welcome to the Chair,
Mrs. Humble, for this afternoon’s
proceedings.
My
concerns about clause 44 and subsequent clauses centre on the extensive
power that they will give to the Secretary of State, and I hope that
the Minister will shortly be in a position to give us greater clarity
on the proposals.
Our
principal concern is that companies that will be asked, or will
volunteer, to build nuclear power stations will want as much clarity as
possible. The clauses give the Secretary of State tremendous powers to
alter what is required of those companies. Will the Minister give us
information on the possible time scales? Do the clauses relate to
programmes before decommissioning starts, or will the power relate to
changing the decommissioning programme once it is in place? There could
be a major difference in how it is
applied.
What if
significant extra costs are involved which the decommissioning fund is
not initially set up to cover and the programme
becomes very expensive? That comes back to the Liberal Democrat
amendment proposed this morning. How will those extra costs be factored
in when the Secretary of State requires those companies to be involved
in the fund? How much notice will the Secretary of State have to give
of the changes that are being proposed? If the notice is given
while the decommissioning is under way, is there provision whereby he
can say, “This must start tomorrow or next week”, or will
he expect those arrangements to allow for many years of planning before
they come into
force?
The
Minister for Energy (Malcolm Wicks):
Welcome to the Chair
for this afternoon’s sitting, Mrs.
Humble.
With your
permission, Mrs. Humble, I would like to correct for the
record a response that I made this morning, as it might be helpful to
the Committee. In answer to the hon. Member for Cheltenham, I explained
that the Paris convention, to which the UK is a signatory, sets out a
financial limit for operator liability in the event of a nuclear
incident above which public funds may be used to meet third-party
liability. I
should have referred to the fact that the convention, not EU law, sets a
minimum level rather than a limit. That was my
error.
Under the Paris
convention, the usual limit is currently 15 million special drawing
rights, which is about £12 million. The UK has gone further than
that; we have chosen to exceed the normal maximum limit per incident in
our implementing legislation by setting the normal level at £140
million.
The Government
are currently analysing options for nuclear operators to obtain
financial security for new heads of damages set out in the amending
protocol to the Paris convention. We intend to publish a
consultation document on the amended convention later this year. I
apologise to the Committee for getting that wrong. Nevertheless, I hope
that what I have said further satisfies the Liberal Democrats in
relation to taxpayer protection.
The hon.
Member for Wealden raised the issue of what we mean by
“unreasonable delay”. Again, I would like to be as
helpful as I can in answering, but I cannot be arithmetically precise.
First, the time involved in considering the proposal will depend on its
quality and complexity. If it is of a lower quality, we will
understandably wish to seek clarity, which will necessarily involve
additional time. If the proposed programme involves complex financial
arrangements, for example, that will also be likely to involve a longer
period of
consideration.
Secondly,
there are statutory procedures that we must follow, such as consulting
the Health and Safety Executive and the Environment
Agency, or its equivalent in Northern Ireland. In addition, we would
expect to consult the new board, which might also need to obtain expert
advice. Thirdly, if the Secretary of State was minded to require a
modification, he must give the operator and others with obligations
under the programme an opportunity to make written
representations.
To
try to give a more precise answer to the hon. Gentleman, we might be
talking about three to six months for the straightforward cases. For
more complex cases, it could take a month or two more than that
estimate. Estimates will necessarily be linked to the particular case
under consideration. However, it is in no one’s interest for
that process to be either rushed, or unnecessarily or unreasonably
delayed.
The hon.
Gentleman also asked whether the Secretary of State’s power
unilaterally to modify an approved programme might create uncertainty
for the operator. When the Secretary of State approves a programme, he
does so to ensure that prudent provision has been made for the
technical matters and for the financing of designated technical
matters. Where he approves a programme, the Secretary of State is
saying that it meets this requirement and that it adequately addresses
the matters set out in the guidance, currently out to consultation, to
be issued under clause
50.
It is important
that the Secretary of State retains the power to modify an approved
programme because it is an important part of the enforcement regime. In
such circumstances, the Secretary of State might exercise the power to
modify or impose an obligation to ensure that the necessary actions
were carried out to bring the programme back into line with the
approved programme. He might impose obligations to ensure that the
breach did not occur again. It also enables him
to respond to changes in circumstances such as a change of control of
the operator, as set out in more detail in the funding guidance as part
of the funded decommissioning programme guidance consultation currently
under way.
The
Secretary of State might make a modification or
impose an obligation where it is felt that the
programme no longer meets the principles set out in guidance, or
perhaps where the robustness of an associate body’s provision
for financial security is reduced. That would be one answer to that
question.
The
procedure for making a modification is set out in clause 45 and, for
example, we must consult the interested bodies before making a
notification. Ideally, we would work with the
operator to make a modification. However, in a quick change in
circumstances, such as when there is a change in the control of the
operator, the modification might have to be very quick indeed. The hon.
Gentleman will understand that I cannot be precise, but I hope that is
a helpful
answer.
Question put
and agreed to.
Clause 44
ordered to
stand part of the Bill.
Clause 45Procedure
for modifying approved
programme
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
The clause sets the procedure for
modifying an approved programme whether the
modification is proposed by the Secretary of State or by other parties
such as the operator. It sets out who should be informed of the
proposed modifications, ensures that the Secretary of State is informed
in writing of any proposed modification, if not made by him, and
approves all modifications.
It is
important to have the ability to modify a programme once it has been
approved. The power will provide the necessary flexibility for approved
programmes to take account of the kind of changes I mentioned in
relation to clause 44. Requiring the Secretary of State’s
approval to any modification will ensure appropriate oversight of
operators’ programmes.
Regardless of
who puts forward the proposal, the clause allows for any costs
associated with the consideration of the proposed modification to be
passed on to the operator. These costs might arise from seeking
verification of the impact of the proposed modification on, for
example, the cost of managing waste. We will set out in regulations how
the charges will be calculated and when they will be payable.
There is a duty on the Secretary
of State to give the operator, any other person with obligations under
the programme and any person on whom the proposed modification will
have an impact the opportunity to make written representations. That
will mean that all those who have or will have obligations as a result
of the modification will be given a chance to express their views on
the impact the proposal might have on their activities. He will also
need to take into account those representations, of
course.
Anne
Main (St. Albans) (Con): Will the Minister clarify
something? Will there be a right of appeal against decisions that were
made despite
representations?
When deciding
whether a modification is to be made, this clause, like clause 41,
requires that the Secretary of State must exercise his power only with
the aim of securing that prudent provision is being made for the
technical matters, the financing of the designated technical matters
and the cost estimates of those matters.
If the
Secretary of State proposes to make a modification, he will have to
determine that the programme originally submitted no longer makes
prudent provision for those matters. In determining that, the Secretary
of State will make reference to the guidance in force. Additionally,
the Secretary of State will take into consideration comments made by
the interested parties.
On the appeals procedure, as is
the case with all issues across Government where the Secretary of State
has the power to make the final decision, disputes between the operator
and the Secretary of State can be settled by recourse to administrative
law procedures. Therefore, an appeals procedure is not necessary. I am
advised that that is also consistent with analogous legislation such as
the Nuclear Installations Act 1965 and also in terms of legislation for
offshore renewables.
Question put and
agreed
to.
Clause 45
ordered to stand part of the
Bill.
Clause 46Power
to disapply section
45
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
The Secretary of State can make regulations
so that the procedure set out in the clause does not apply to certain
modifications. Regulations made under the clause could set a material
financial threshold for operational and technical changes in terms of
their impact on decommissioning and waste management cost estimates, so
that any changes below that level—or, indeed, any cumulative
changes over a certain period—would not need the Secretary of
State’s
approval.
The
tiered approach is consistent with that of the Health and Safety
Executive and its enforcement of safety standards under licence
condition 22 of the nuclear site licence. This power is important
because it allows the operator to concentrate on running the station
without having to seek approval for modifications which, for example,
do not impact significantly on the costs of waste and
decommissioning.
To
ensure that the clause does not have negative
implications for health, safety or environmental
matters, the Secretary of State is required to consult interested
bodies prior to making the regulations. Regulations made under the
clause will also set out how the operator is to inform the Secretary of
State of such modifications. That will ensure that the Secretary of
State is made aware of any changes to an approved programme, even
if he does not have to approve them. The Secretary of State has other
powers in the Bill and the programme to obtain information about such
changes.
Steve
Webb (Northavon) (LD): I have just a brief question in
response to the Minister’s comments. We are in the strange
situation of deciding that although clause 45 has decent provisions and
sets out how things should be done, clause 46 states that the Secretary
of State does not have to do any of that if he does not want
to.
When I first
read that, I imagined that it was an emergency
provision—something changes which means that it is important
that the funded decommissioning plan is suddenly changed. I can
understand why we would then disapply the careful safeguards set out in
the previous clause, but the Secretary of State—I mean the
Minister; I am getting ahead of myself—is saying the opposite,
in that the proposal is de minimis and these are piddling, if I may use
that word, little changes. He says that the Government do not want big
paraphernalia because they are only changing small things, but that is
not remotely apparent from reading clause 46.
My hon. Friend the Member for
Cheltenham will try to catch your eye, Mrs. Humble, to raise
slightly separate issues, but my worry is that the proposal is so vague
and all-embracing that, essentially, we have agreed a set of procedures
that seemed reasonable in clause 45, but we are now giving the
Secretary of State carte blanch to rip them all
up—albeit after consultation—on unspecified grounds which
may be specified later. It seems so sweeping. Will the Minister reflect
on whether the power is too broad and will rip up what we have just
agreed to? The clause might say that it is to be used only in cases in
which the regulatory burden of applying clause 45 is excessive and so
on, but we do not even have any clues on that. I think that clause 46
is far too broadly
drawn.
Mr.
Brian Binley (Northampton, South) (Con): May I say what a
pleasure it is to see you in the Chair, Mrs.
Humble?
I want to
raise a question which I asked earlier on consultation. I am equally
concerned about the rather broad terms of the clause and that changes
might be made that would have an impact on the local
population almost without it knowing about them. Will the Minister
describe the changes that could occur and give us an inkling about
their size? Does he think that there might be a need to consider
consulting on the matter, in the way that he promised
earlier?
4.15
pm
Martin
Horwood (Cheltenham) (LD): May I say how nice it is to be
serving under your chairmanship again, Mrs.
Humble?
We discussed a
number of amendments under clause 42 this morning, one of which we will
later press to a vote. We will not press amendment No. 42, but it seems
appropriate to refer to it in the context of this clause. It is about
the right to consultation of the nuclear liabilities financing
assurance board and whether that body will be consulted or informed
when changes are
made. The Health and Safety Executive, the Environment
Agency and others are listed and will be consulted by the Secretary of
State. However, the very body that is supposed to deal with the
financial arrangements of a funded decommissioning programme will
apparently not be consulted because it is not
specified.
How will the
NLFAB carry out its functions if under subsection (3) modifications can
be made by reference to the financial consequences of
a decommissioning programme and yet there is no provision for the
involvement of the very body that is supposed to exercise scrutiny over
this matter? According to the White Paper, the NLFAB is supposed to
provide advice to the Secretary of State on the regular reviews and
ongoing scrutiny of funding arrangements. How will it do so if it will
not even be informed when modifications to funded decommissioning
programmes on the basis of financial consequences take place? Perhaps
the Minister will clarify how that process will work in
practice.
Malcolm
Wicks:
The hon. Member for Northavon was worried about the
implications of a get-out clause. I am not sure if that was his phrase,
but some might put it like that. I reassure him that we will lay out in
regulations by negative procedure the circumstances in which the
modification procedure under clause 45 will not apply. I will give him
more reassurance on that matter later if I can. It will be debatable in
the House, if appropriate, and we will look at the implications of it
in regulations, taking into account his
concerns.
The hon.
Member for Northampton, South talked about the local community and the
local authority in an earlier discussion. I think that that is more or
less within the same family of questions. I said this
morning that I would look at the matter and come back to the Committee.
I do not think that either hon. Gentleman is saying that the local
authority should have a role over the financial arrangements or the
actuarial issues regarding the fund. They are concerned that there
could be a change to the environment, for example because of a new
building, or some traffic implications, and want to know whether the
local authority should have a role. I am taking advice to see whether
such things are covered under existing planning law, but I do not think
that I will receive it today. If it is not covered, I will find out
whether there needs to be further action and will come back to the hon.
Gentlemen.
We discussed
the nature of the board this morning and talked about what it is and
what it is not. It will give regular advice to the Secretary of State.
We do not feel that it needs the powers that the hon. Member for
Cheltenham is prescribing because it will be there as part of
government—with a small “g”—to advise us. I
see no danger that we will not be able to benefit from its advice. I do
not think that what he is proposing is
necessary.
Martin
Horwood:
According to the White Paper, the purpose of the
nuclear liabilities financing assurance board is not simply to give
advice but to provide scrutiny, specifically with respect to the
financial arrangements. However, the clause is about changes to funded
decommissioning programmes, with specific reference to their financial
consequences, and yet there seems to be no mechanism or expressed
intention to involve the scrutiny body that we are just about to set
up in changes to the funded decommissioning programmes as they happen.
Surely that is an essential prerequisite. Indeed, it would be useful to
know what kind of financial consequences the Government have in mind in
subsection (3). I would be grateful if the Minister could reassure me
that the body will be involved in these
processes.
Malcolm
Wicks:
The smaller—de minimis—changes will
be set out in the annual report that the operator will have to submit
as part of the programme. That is part of the transparency—or
scrutiny—process. The Secretary of State has powers in the Bill
to obtain more information if he is not satisfied with the changes that
the operator has made. There will be transparency about these changes
and the board will therefore be able to hear about them and give us
advice on that if there is a concern.
Steve
Webb:
I wonder whether the Minister can help me. I sense
that what is going on here is an example of his Department’s
legislative approach, which is to say, the things that one might not
have thought of are in the clause but he has excluded the blindingly
obvious. Is that what is going on
here?
Malcolm
Wicks:
I would not put it quite like that. We are setting
up the board to advise us. We are looking at the annual reports and if
it wants to advise us on these things or if we want to take its advice,
we will. I do not think that the whole chronology of every day in my
Department and its interactions with a range of bodies needs to be in
every Bill that we introduce. In terms of what size we mean by de
minimis, we will be consulting on this level before making our
regulations.
Question
put and agreed to.
C
lause 46 ordered to
stand part of the Bill.
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