Clause
54
Secretary
of State’s power of
direction
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
I shall give a brief introduction to the clause. If
a person has not complied with an obligation imposed on them by the
programme, or if the Secretary of State believes that that person has
been engaged in unlawful conduct that he believes may affect the
programme, under the powers in the clause, he can direct the person to
take action to comply with the obligation or to remedy the effects of
any breach. As for unlawful conduct, the person must have been
convicted of a criminal act by a United Kingdom court and, if relevant,
for the period of appeal to have expired—or if an appeal is
made, for it to have run its course.
Before issuing a notice to
direct a person, the Secretary of State must consult the interested
bodies. If the person does not comply with the direction, the clause
will allow the Secretary of State to apply to the High Court for an
order. If the High Court decides that the person has failed to comply
with the direction, it can order the person to take whatever steps are
necessary to ensure that the notice is complied with. Without the
clause, there would be no way of ensuring that remedial action could
take place if it was considered necessary. At the same time, the
constraints contained within the clause, such as the need for an appeal
to have run its course, will ensure that the powers cannot be misused.
I suggest that the clause stand part of the
Bill.
Question put
and agreed
to.
Clause 54
ordered to stand part of the
Bill.
Clauses 55
to 57 ordered to stand part of the
Bill.
Clause
58
Power
to apply this Chapter to other nuclear
installations
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
This clause recognises the fact that, in due
course, companies may come forward with proposals to develop other
nuclear installations and facilities that will sustain and support the
development of a growing nuclear energy sector. It will apply to
installations or facilities that are constructed for a purpose
connected with the generation of electricity, such as fuel fabrication
and/or decommissioning.
The clause is
about future-proofing in this framework, and it is right that we make
the most of this legislative opportunity to ensure that the recourse to
public funds is remote at all times. If such proposals come forward, we
will seek to ensure that the developers of new installations or
facilities, which are constructed for a purpose connected to the
generation of electricity by nuclear power stations, cover their full
decommissioning costs and any waste management costs. We believe that
developers of such installations should have to operate in the
comprehensive regulatory framework proposed in the Bill. The clause will give the
Secretary of State the power to extend the clauses in the Bill by order
under the affirmative procedure to such installations, to ensure
that the same provisions can be applied to those
facilities. Such an order will be subject to the affirmative procedure,
which will provide Parliament with a further opportunity to scrutinise
any proposal that comes forward. That is thought to be appropriate on
the basis that the provisions will give the Secretary of State the
power to extend the scope of the legislation in relevant cases. I
suggest that the clause stand part of the
Bill.
Question put
and agreed
to.
Clause 58
ordered to stand part of the
Bill.
Clause
59
Co-operation
with other public
bodies
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
This clause refers to co-operation and information
sharing between the Secretary of State and the interested bodies. When
information is relevant to a programme, the clause sets out the
framework for the sharing of information that relates to a
person—such as a site operator or persons with obligations under
a programme, such as trustees, or a body corporate associated with the
operator—between the Secretary of State and the interested
bodies.
The clause
also sets out the framework for those relevant bodies to provide
assistance. It will limit the circumstances in which the Secretary of
State and the regulatory bodies can share information. It will also
apply if the Secretary of State is considering whether to make
a modification, deciding whether or not to approve a programme under
clause 41 or deciding whether to make a modification under clause 44.
It will also apply where a proposal to make a modification to an
already approved programme would result in a new obligation being
imposed on a body corporate.
Information
can only be shared between the Secretary of State and the interested
bodies if the Secretary of State thinks that the information is
relevant to certain statutory duties of one or more of those bodies.
Likewise, the interested bodies can only share information with the
Secretary of State if they think that the information is relevant to a
function of the Secretary of State under this chapter. The clause will
apply regardless of any statutory or other restriction that seeks to
prevent a disclosure of information. Any information shared between the
Secretary of State and the relevant interested bodies will be subject
to the Freedom of Information Act
2000.
Mr.
Swire:
I see that the bodies specifically listed are the
Health and Safety Executive, the Environment Agency and the Department
of the Environment for Northern Ireland. Coming back to devolution,
what powers, if any, will the clause give to the Secretary of State in
relation to installations in Scotland, which would affect us if
something were to go wrong? What is
the flow of information and responsibility between the Secretary of
State and the devolved Administration in
Edinburgh?
6.15
pm
Malcolm
Wicks:
Obviously, this is about new nuclear. The powers in
the Bill will not affect Scotland, largely because the Scottish
Executive, who are the planning authority for power stations of this
kind, have made it clear that, at present, on planning grounds, they
will not allow new nuclear to be built in Scotland. I personally hope
that Scotland will one day open the way to what will be an important
modern industry in the 21st century, and there may come a time when
these issues will need to be revisited. However, none of the key
provisions in the Bill applies to
Scotland
It is
important that bodies corporate associated with the operator are caught
within the scope of the clause, because those involved in financing and
supporting such an operator are as important to the sustainability and
viability of the programme as the operator’s ability to fund it.
It is therefore only right that, if one of the interested bodies had
information about an associated company that might have an impact on
the programme, the regulator could be required to share that
information with the Secretary of State. We will work with interested
bodies to draw up a memorandum of understanding that will set out how
the Secretary of State and individual regulators should work together
not only in sharing information, but in ensuring that the process for
approving, monitoring and reviewing decommissioning programmes is
understood by all those involved. That will also enable operators and
persons with obligations under a programme to understand what they can
expect from those parties with regulatory
responsibilities.
Question
put and agreed to.
Clause
59
ordered to stand part of the Bill.
Clause
60
Continuity
of
obligations
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
This clause will ensure that an operator can be
held to any obligations under a programme, even when the original
operator ceases to hold a nuclear site licence in relation to the site.
This approach reflects the policy on the decommissioning of oil and gas
installations under the Petroleum Act 1998, whereby the Secretary of
State can pursue the licensee in relation to its obligations under an
abandonment programme. The operator would only be released from its
obligations when given notice by the Secretary of State. The notice may
release the operator from all or only specific obligations, and it may
relate to all or a specific part of the site, or to all the nuclear
installations on-site or to one specified in the notice. It may also be
unconditional or subject to
conditions.
Where an
operator wishes to relinquish ownership of a station, for example, the
clause will enable the Secretary of State to require the outgoing
operator to take the necessary action to ensure that the programme
is up to date before releasing it from any obligation under the
programme. The Secretary of State could, for example, require the
existing operator to make good any shortfall in the programme, such as
a funding deficit or a failure to complete the building of certain
waste facilities by a certain
date. Additionally, the
original operator might well wish to sell the station
to another entity that does not have the necessary financial security
arrangements in place and for which, if it had applied to have a
programme approved, the Secretary of State would not have granted
approval or would have put certain conditions in place. Using the
clause, the Secretary of State could hold the original operator to
certain obligations under the programme until such time as the new
operator can make provision for that security.
The clause
will therefore provide an important protection to ensure that recourse
to public funds is remote at all times, by ensuring that the current or
previous operator meets the full decommissioning costs and its full
share of waste management costs. The Secretary of State’s powers
to approve a programme submitted by a new operator will enable the
Secretary of State to distribute responsibility for such action between
the old and the new operator, as he considers
appropriate.
We
have underlined in the draft guidance the importance of the operator
informing the Secretary of State of an impending change to the identity
of the licensee—through a merger or acquisition, for example.
However, the fact that consent will be needed to release the operator,
in line with the clause, should encourage the relevant persons to
inform the Secretary of State of the change as early as
possible.
There
is an argument that the clause could engage with article 1 of the first
protocol of the European convention on human rights, which deals with
the protection of property: although the licence, not ownership, can
pass from one operator to another, the Secretary of State could, by
using the clause, require the original operator to continue to make
further payment to the fund. However, the Government do not believe
that the clause engages with article 1. It is perfectly acceptable that
such payment should be made, and that can be justified, because it is
the Government’s stated policy that operators should be
responsible for the decommissioning and clean-up of the station and
that such payments should not come from public funds. Alternatively, it
is a control-of-use provision.
Charles
Hendry:
I am grateful to the Minister for his preamble in
setting out the way that the clause will work and the matters to which
it refers.
Clearly, we
want to be sure that, if a nuclear installation changes ownership,
people cannot simply walk away from their responsibilities. However,
how would the process of transferring those responsibilities to the new
owner work? How would the Government ensure that a new company, which
could be foreign-based, would take on the responsibilities of the
previous owner? Simply by saying that they would not release the former
owner from its duties, would the Government expect it to sort them out
with the new company, or would the Government have a more direct
involvement in that process?
Would the
Government have powers to block sales outside the competition rules for
people whom they felt that they could not hold to the same duties and
responsibilities? For example, they could be companies outside the
jurisdiction of the United Kingdom, where they could not be held to
account in the same way as the companies that had initially sought the
responsibilities and initially had the duties put on them. What would
happen in those
circumstances?
We have
also seen that, over time, some companies simply fade away. Not a
single company currently in the FTSE 100 was in it
100 years ago; every one is different. Some companies demerge, are
closed down or are bought by foreign companies. In those circumstances,
how do the Government intend to ensure that the obligations on a
current owner are transferred effectively to someone
else?
Specifically
on demergers, if a conglomerate that owns the nuclear plant at the
outset demerges into a number of smaller parts, what happens to the
duty? The Secretary of State could not impose a duty on, for example, a
French company that had fragmented or simply to decide which element of
that French company should bear the responsibilities. I am interested
to know how that responsibility would be
enforced.
Malcolm
Wicks:
That is an important line of questioning, and I
hope that I more than touched on some of it in my opening
speech.
Operators will
be released at the discretion of the Secretary of State. That
essentially means that he may or may not release them. He is likely to
release them when he is confident that the liabilities can be met by
another organisation. If he is not confident about that, they will not
be
released.
The
Government must be notified in good time before a change in ownership
or control of the station. The Secretary of State must approve the
revisions to the funded decommissioning programme. The Secretary of
State would not expect to release the former owner or controller from
their obligations unless and until satisfied that the arrangements
under the new owner or controller are adequate. Breaching the
obligation to notify the Secretary of State of the change or to submit
the relevant parts of the funded decommissioning programme for approval
will amount to a criminal
offence.
Although
the hon. Member for Northavon and myself must not keep drawing
comparisons with pensions, it strikes me that there is an interesting
comparison to be drawn in this matter. The Pensions Act 2004, which he
and I discussed a few years ago, set up the pension regulator and the
Pension Protection Fund, and it is interesting that pension liabilities
are now, properly, part of the equation in company takeovers and
possible mergers. One can well imagine that, when a company seeks to
take over another company, nuclear liabilities will be on the balance
sheet in the negotiations and in the discussion. That is perfectly
proper.
Question put
and agreed
to.
Clause 60
ordered to stand part of the
Bill.
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