Energy Bill

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Clause 51

Funded decommissioning programmes: verification of financial matters
Amendment proposed: 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.’.—[Martin Horwood.]
Question put, that the amendment be made:—
The Committee divided: Ayes 2, Noes 13.
Division No. 3 ]
Horwood, Martin
Webb, Steve
Baron, Mr. John
Binley, Mr. Brian
Hendry, Charles
Iddon, Dr. Brian
Ladyman, Dr. Stephen
Main, Anne
Palmer, Dr. Nick
Reed, Mr. Jamie
Robertson, John
Seabeck, Alison
Swire, Mr. Hugo
Tipping, Paddy
Wicks, Malcolm
Question accordingly negatived.
Question proposed, That the clause stand part of the Bill.
Malcolm Wicks: Let me say a few words on the clause, although I was tempted to let it go, given the hour. The clause allows the Secretary of State to make regulations setting out the circumstances in which he may rely on advice provided by a third party to verify financial aspects of a programme. The regulations might apply when the Secretary of State is considering whether to approve a programme or when a modification to a programme that has already been proposed is being considered. The Secretary of State will not be an expert on the financial matters that might relate to a programme, so it is important that he can call on expert and independent advice when seeking to verify such matters.
In addition to the clause, and as detailed in the nuclear White Paper that we published in January, we intend to create a new independent advisory body—the nuclear liabilities financing assurance board. Aside from providing independent scrutiny and advice on the suitability of decommissioning programmes submitted by the operators of new nuclear power stations, the board will advise the Secretary of State on the financial arrangements that operators plan to put in place to cover waste management and decommissioning. Our debate just now illustrates the importance of those plans.
The board will also advise the Secretary of State regarding the regular reviews and ongoing scrutiny of funding arrangements once programmes are approved and new nuclear power stations are operational. Given the importance of providing the taxpayer with adequate protection, it is appropriate—indeed, necessary—to have an additional level of scrutiny on those financial matters, because they are fundamental to ensuring that operators meet the full costs of decommissioning and their full share of waste management costs.
Question put and agreed to.
Clause 51 ordered to stand part of the Bill.
Clause 52 ordered to stand part of the Bill.

Clause 53

Offence to fail to comply with approved programme
Charles Hendry: I beg to move amendment No. 36, in clause 53, page 45, line 22, after ‘indictment’, insert
‘in a case of dishonesty,’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 35, in clause 53, page 45, line 23, leave out ‘2’ and insert ‘5’.
No. 37, in clause 56, page 46, line 38, leave out ‘or misleading’.
Charles Hendry: This clause sets out clear rules on decommissioning and waste handling programmes. We would all agree that this could not be a more serious issue, which goes right to the heart of the debate about the safety of a new nuclear programme. Anyone breaking laws on this will be in absolute breach of the rules and regulations that Parliament has put in place to ensure that new build nuclear programmes will be as safe as possible, not to mention the breach of trust of all the assurances that would have been given. We need penalties that would reflect the seriousness of such an offence.
Amendment No. 36 would add the words
“in a case of dishonesty”
so that it would be clear that the action has been wilful and deliberate. If the action happened accidentally or inadvertently, it should be treated with a different level of severity. Amendment No. 35 relates to the severity of the penalty for such breaches of the law. Two years does not seem a very serious jail sentence for someone who has failed to comply with an approved funded decommissioning programme. Such a failure could have serious consequences for public health, and a sentence of five years’ imprisonment seems more appropriate.
John Robertson (Glasgow, North-West) (Lab): Who does the hon. Gentleman mean by the person? Does he mean the person who inadvertently did the wrongdoing, in other words the worker, or could it be the manager or his boss who instructed him to do the job in the first place?
Charles Hendry: It is the person described in the Bill. The Bill has already referred to the person to whom the fine would apply. One assumes that it would be the person who has taken the decision and has been in a position of authority. That is one of the reasons for my earlier amendment. If someone might be considered as a worker within the facility where something had happened wrongly and could not be perceived to carry responsibility for those acts, that should be taken into account too.
The explanatory notes do not explain the level of the fine involved so perhaps the Minister could clarify that. Amendment No. 37 relates to the penalties for those who have supplied false information to the Secretary of State. It includes the term “false or misleading”. I fully understand why a person who has knowingly or recklessly supplied false information should be liable to punishment, but I am concerned about the term “misleading”. It is a very subjective term and could lead to people being convicted who have supplied information that is deemed misleading by the courts, when that was never their intention when they provided the information.
Martin Horwood: The amendments are puzzling. Amendment No. 36 introduces the phrase
“in a case of dishonesty”
into subsection (3)(b), thereby raising the threshold for a judge using prison as an option. Otherwise they will simply impose a fine. We have a problem with our prison population and there may be a feeling that the thresholds that apply to imprisonment when violence against people or property is involved or when it is unsafe for someone to be allowed outside should be enforced, but that other crimes perhaps should not allow that option.
It is interesting that the Conservative party should suggest raising the threshold for which prison is an option when there might be a serious threat to life and health from one of these decommissioning programmes not being properly carried out or when there might be a threat to Government finances from a body corporate as well as an individual acting in a deeply negligent way. It seems better, and I shall be interested to hear any further comments from the hon. Gentleman, to leave cases like this to a judge’s discretion rather than trying to prescribe it too closely in the Bill, lest we be thought to be soft on nuclear crime.
Amendment No. 35, by contrast, seems to go in the other direction and seeks to increase the prison population by sending anyone who is convicted to prison for five years not two years. Perhaps this is proposed for fear that the Government might not be able to fill all the new prison places that his hon. Friends want to build. I do not know. Again, that seems not to have an obvious justification.
Mr. Swire: Is there not an inherent contradiction in what the hon. Gentleman is saying? He accuses my hon. Friend of raising the threshold for conviction, but if he examines the next amendment he will see that my hon. Friend suggests raising the penalty. Rather than being soft, surely we are being hard?
Martin Horwood: In his slight confusion, the hon. Gentleman has reinforced my point that the amendments propose contradictory things. Amendments Nos. 36 and 37 would raise the threshold for punishment, where as amendment No. 35 would increase the punishment, so they point in opposite directions. Amendment No. 37 is mysterious in seeking to remove the offence of supplying misleading information to the Secretary of State. That could be just as damaging and dishonest as supplying false information. Why are we raising the threshold for corporate responsibility and denying judges the right to impose those kinds of penalties? We will not support the amendments.
Charles Hendry: We are trying to say that the full power of the law should not be used against people who inadvertently get into a position where there has not been wilful deceit and dishonesty. We would raise the threshold of proof that must be demonstrated in order to prosecute. Having raised the threshold, the penalties for those people should be higher. At the moment, people who have not been fundamentally dishonest may end up being prosecuted, and we want to avoid that. We are also saying that where people have wilfully and dishonestly acted in this way, two years does not seem to be enough; five years seems more appropriate.
Martin Horwood: I was about to conclude my remarks, but I am grateful to the hon. Gentleman for his intervention. He has clarified the rationale for amendment No. 35, at least. If taken with the other two amendments, and only then, that amendment makes some sense in that it is a higher punishment for a higher threshold of crime. However, I still do not see why, since in other parts of the law we punish recklessness and the supply of misleading information, we should not punish it on this occasion. I would be happy to see the clause remain as it is.
Malcolm Wicks: Let me act as a referee in these interesting discussions between the two former great parties of our nation, which I always enjoy. Rather like those on the Liberal Democrat Benches, I have wondered whether there was a connection between recent announcements and the amendment. The hon. Member for Wealden would never take the Committee for granted, but I had wondered whether, in announcing 5,000 new prison places, his colleagues were being prescient about the way in which he would sway the Committee to support this amendment for further imprisonment. He may, sadly, be disappointed. I notice that the leader of his party has recently, perfectly properly, talked about the importance of education and training programmes in prison. Perhaps he would like to table a later amendment to suggest that among the training programmes should be masters degrees in nuclear science, so that people will be properly enabled to re-enter the community.
Amendments Nos. 35 and 36 relate to clause 53, which makes it an offence to fail to comply with a programme. Amendment No. 37 relates to clause 56, which makes it an offence to supply false or misleading information. We have made it clear, both in our White Paper and in the draft guidance, what a new nuclear operator’s obligations will be in the context of meeting decommissioning and waste management costs. We believe that the framework that we are putting in place will achieve that outcome. We are therefore confident that no one will be sent to prison.
We want to be as clear as possible about what the obligations are. We are requiring that operators put robust requirements in place to meet their liabilities and underpinning the framework with criminal sanctions for non-compliance. Clause 53 makes it a criminal offence for an operator, or a person with obligations under an approved programme, not to comply with the programme, unless they prove that they exercised due diligence to avoid committing the offence.
Anne Main: I am delighted that the Minister is acting as a referee between the various opinions. Has there been any examination of the structures in place for companies that operate abroad in terms of legal proceedings against people who recklessly, knowingly or willingly mislead? Have the Government examined that and tried to put something similar in place?
Malcolm Wicks: I am not sure whether I can supply the hon. Lady with information about that. I might consult the hon. Member for Stone (Mr. Cash) to find out whether it is appropriate to use European models. We will look at that and possibly return to the matter.
6 pm
The failure to comply with a programme could mean that the decommissioning and waste management costs are not fully provided for, which puts public funds at risk and therefore warrants the use of criminal sanctions. We can draw on outside expertise, but in this instance, it is for the UK Parliament to make judgments about these important things. The clause forms a crucial part of the overall regulatory structure, because it provides the key deterrent to companies and others, as appropriate, against failing to comply with their obligations under the programme.
Amendment No. 35 relates to the question of what the suitable penalty should be for someone who fails to comply with an approved funding decommissioning programme. In developing the penalties under clause 53, we have looked at other legislation and at other requirements to have in place decommissioning programmes—namely, in the oil, gas and offshore renewable sectors. It should be noted that the provisions for new nuclear power stations will complement legislation and conditions that apply to existing nuclear power stations—for example, under the Nuclear Installations Act 1965, which contains offences and penalties for contravening certain licence conditions regarding the use of a nuclear site.
Amendment No. 35 would increase the sanction from two to five years, but it would have no material impact on the incentive for an operator to comply with a programme—it might give them slightly more time to write their first novel or play, but it would not have a serious impact. Furthermore, it would take the sanctions for nuclear out of step with the decommissioning regimes that we have in place for offshore renewables and oil and gas installations.
It is important to remind the Committee that the provision aims to ensure that operators comply with their requirements to set aside adequate funding for decommissioning and waste disposal. The measure does not concern health and safety or environmental issues, which will continue to be dealt with by the Health and Safety Executive and the Environment Agency and the statutory provisions and sanctions that support those agencies.
Amendment No. 36 would reduce the effectiveness of clause 53, so that the maximum sanction only bites when the breach of a programme has been committed dishonestly. That amendment would reduce the deterrent effect of the clause and undermine the robustness of the regime as a whole. I recognise that, in conjunction with amendment No. 35, amendment No. 36 would result in the maximum penalty under clause 53 being higher than that proposed in the Bill. Taken together, those two amendments would also ensure that breaches of the programme because of carelessness or negligence would only be punishable in a magistrates court, where the fine does not exceed £5,000.
We consider that the threat of prosecution in the Crown court in such cases, with the attendant enhanced penalties, provides an additional and important deterrent. There is a risk that the proposed amendments might send out the wrong message, which is that the Government will only prosecute in one specific circumstance: dishonesty. We want to send out the message that, where there is a breach, the operator will have to demonstrate that they did everything that they could to avoid committing the breach, which is what the clause will achieve.
In the context of offences, I should also mention clause 87, which sets out that, where offences are committed by bodies corporate, directors and other officers of the operator may also be prosecuted personally where the relevant acts were committed with their consent or connivance or were attributable to their neglect. The clause creates a significant incentive on the part of the management of the operator to ensure that the company complies with the programme. It seems unnecessary and disproportionate to increase the penalty further, as proposed in amendment No. 35, in view of that additional sanction.
Amendment No. 37 is similar to amendment No. 36, as it seeks to remove the term “misleading” from clause 56. Again, I do not believe that that amendment should be accepted, as it would make it acceptable for an operator to submit information that, although not false, did not provide the full picture in relation to a particular issue—for instance, an attempt to cover up a breach in a programme. In my mind, the act of misleading is deliberate, and I am not sure that the public would be comfortable with a Minister saying that it was acceptable for a person to submit misleading information without facing sanctions. That amendment would undermine one of the foundations of the regime, which is that the Secretary of State must be able to take decisions based on full and accurate information. For that reason, it should not be accepted.
Clauses 53 and 56 are designed to send a clear message to operators about acceptable behaviours; if those behaviours are not maintained, the Government will have recourse to a sufficient sanction. If we were to accept the amendment, I believe that, overall, the Government would send out a less robust message. I therefore ask the hon. Gentleman to withdraw the amendment.
Charles Hendry: I also asked the Minister to clarify what level the fine will be, as that is not to be found in the explanatory notes. Most sections of the explanatory notes that deal with fines explain that, if a case goes to the Crown court, an unlimited fine can be imposed, but the notes on these clauses do not provide that information. It would be useful to know what the level of fine will be.
I am grateful to the Minister for the detail with which he went through the amendments in his responses. I understand that a balance must be struck. My concern is that people who had been in breach, but not been wilfully so, should not be treated in the same way as in cases that involved a much greater act of malevolence.
In amendment No. 35, we propose raising the limit from two years to five. I disagree with the Minister when he said that the difference would not put someone off. The risk of losing one’s liberty for five years rather than two—or even parole for two and a half years compared to one—is significant; people would react to that and deal with it.
The Minister said that what we propose is out of step, for example, with punishments under the oil and gas regulations. We would all feel that someone who was in breach of nuclear regulations deserved an altogether different punishment from those in breach of oil and gas regulations; there should be much greater severity, and the public would expect there to be some difference. However, I understand what he said about the punishments available elsewhere in the Bill.
Malcolm Wicks: To save me making a separate speech, I can answer the hon. Gentleman’s specific question. The fine would be unlimited. It would therefore be up to the court to determine.
Charles Hendry: I am grateful to the Minister for clarifying that point.
The final issue was about the word “misleading”. Hon. Members are aware that we should not say that a colleague had misled the House, although we can say that they had done so inadvertently. It is recognised that misleading is not always deliberate. By accident, one can sometimes say things that are misleading; it may not always be the intention. My concern is that, in this case, the word covers both deliberate and inadvertent acts.
I shall not press the amendment to a Division. However, I am keen to seek further legal advice, and we may return to the issue on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 53 ordered to stand part of the Bill.
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