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London—Gibraltar via Bordeaux Air Route

Lord Merrivale asked Her Majesty's Government:

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): Traffic rights for UK airlines to operate scheduled services on the route London—Bordeaux—Gibraltar are already available under the UK/France air services arrangements. BA currently operates between London and Bordeaux, but services between London and Gibraltar are currently operated by GB Airways using BA flights codes under a franchise agreement between the two airlines. It would be a matter for the airlines to determine whether it would be beneficial to combine the services.

Lloyd's Mutualisation of Losses

Lord Astor of Hever asked Her Majesty's Government:

Lord Inglewood: It is not the practice to comment on the nature of advice received by officials.

The letter referred to included a description of the interaction between statutes in force so far as the extent of mutualisation of underwriting losses between members of Lloyd's is concerned. It appears not to have been understood by those who have seen it besides the intended recipient. The letter was not intended to mean that there is a legal requirement for Names' losses to be mutualised through the Central Fund. However, the Central Fund (which was initially established in the 1920s under an agreement between Lloyd's and its members, and now operates under a bye-law made under the Lloyd's Acts (1871–1982)) has as one of its

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main purposes the meeting of losses of members who may be unable to meet their underwriting obligations. This is made clear to prospective members through Membership: The Issues, published by Lloyd's. To this extent there is mutualisation of some losses via the Central Fund. The use of the Central Fund to meet defaulting members' losses to ensure that a member's assets are sufficient to meet his underwriting liabilities is a discretionary decision in each instance by the Council of Lloyd's under the bye-law.

The members of Lloyd's are also subject to the solvency requirements laid down in the Insurance Companies Act 1982, which requires that each individual must satisfy the solvency test prescribed by Section 83(5) and that the members of Lloyd's taken together must meet the margin of solvency established pursuant to Section 84. If either individual members might be unable to meet the solvency test without being covered where necessary by the Central Fund and other assets held centrally, or the members of Lloyd's taken together were unable to demonstrate the margin of solvency because the total assets, including where necessary the Central Fund, were insufficient, the regulatory powers of the Secretary of State contained in Part II of the Insurance Companies Act would become exercisable in relation to individual members, or the members taken together, as the case may be. It would be a matter for decision at that time how those powers might be exercised.

Northern Ireland: EU Assistance and Matching Funding

Lord Holme of Cheltenham asked Her Majesty's Government:

    Whether they accept the European Commission President Jacques Santer's recommendation that the British and Irish Governments should match the Commission's £240 million assistance to Northern Ireland pound-for-pound.

The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield): The Structural Funds Regulations, which apply to the Peace and Reconciliation package, stipulate that the Commission will contribute up to 75 per cent. of funding to projects sponsored by the Structural Funds, while the remaining matching funds can come from a variety of sources including the private sector, voluntary/community groups and the public sector. The Commission's draft guidelines on the Peace and Reconciliation package provide that both the EU contribution and matching funding should be additional.

Radioactive Waste Management Policy Review

Lord Skelmersdale asked Her Majesty's Government:

    When they will announce the conclusion of the review of radioactive waste management policy.

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The Minister of State, Department of the Environment (Viscount Ullswater): In May last year, my right honourable friend the Secretary of State for the Environment announced that his department would be heading a review of radioactive waste management policy to be conducted in parallel with, but separately from, the nuclear review. Reappraisal of the policy was necessary in view of the developments that had taken place in the 10 years since the department published its strategy for the long-term management of radioactive waste. Our primary aim in conducting the review has been to ensure that radioactive waste, irrespective of whether it is produced by public sector or private sector operations, is managed in such a way as to ensure that people and the environment are not exposed to unacceptable risks either now or in the future.

The review's preliminary conclusions were published in a consultation paper last August. All the responses received have been carefully considered and the final conclusions of the review will be published in a White Paper this Summer. In advance of that, we are ready to announce the conclusions that have been reached on two issues—the timing of UK Nirex Limited's proposed repository for intermediate-level waste (ILW) and the Government's policy in respect of decommissioning nuclear plant. These matters are relevant to the conclusions of the nuclear review which my right honourable friend the President of the Board of Trade is announcing today. There are also proposals in the Nuclear Review White Paper about the future structure of Nirex.

The Government continue to favour a policy of deep disposal rather than indefinite storage for ILW and consider it appropriate that Nirex should continue with its programme to identify a suitable site. The question had been raised of whether a delay of 50 years in construction of the repository might have advantages. However, the review concluded that the balance of argument was against any such delay. The Government therefore believe that the repository should be constructed as soon as reasonably practicable once a suitable site has been found, although the precise timetable will depend on the granting of planning consent and compliance with regulatory requirements, including the establishment of a sound safety case.

We are aware of the concern expressed by environmental groups and others that the options available to future generations should not be foreclosed by irreversible action taken now. However, given the length of time needed to develop the repository and the period over which it will remain operational, action now to pursue deep disposal leaves options open until at least the latter half of the next century.

A planning inquiry is due to be held later this year into Nirex's application to construct a Rock Characterisation Facility (RCF) at Longlands Farm near Sellafield to test further the geology and hydrogeology of the site. My right honourable friend the Secretary of State has already outlined the matters about which he particularly wishes to be informed to help him reach his decision on this case. These do not include the merits of national policy on the deep disposal of ILW. It has been

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established through the courts that, while, of course, government policy can be a material consideration that may be taken into account at a local planning inquiry, it may not be disputed and made a central area of debate. Policy on deep disposal of ILW has, in any case, already been the subject of wide consultation in the course of the review.

On the decommissioning of nuclear plant, the Government's view is that this should be undertaken as soon as it is reasonably practicable to do so, taking account of all relevant factors. The Government will in future ask all nuclear operators to draw up strategies for decommissioning their redundant plant. These will need to include justification of the timetables proposed and demonstration of the adequacy of the financial provision being made to implement the strategies. As with all other operations on nuclear sites, decommissioning will be undertaken in accordance with conditions attached to the nuclear site licence by the Nuclear Installations Inspectorate of the Health and Safety Executive (HSE), in order to ensure the safety of the site, workers and the public. Disposal of wastes arising during decommissioning will be subject to regulation under the Radioactive Substances Act 1993 by the Environment Agencies which will replace Her Majesty's Inspectorate of Pollution (and in Scotland Her Majesty's Industrial Pollution Inspectorate).

The current decommissioning strategy for Magnox and AGR power stations involves three stages—defuelling immediately on shutdown, dismantling buildings external to the reactor shield 5–10 years later, and demolition of the reactor itself 100 years after shutdown. Given that regulatory approval for decommissioning is required on a case-by-case basis, the Government believe—as they said in the preliminary conclusions of the review—that it would be unwise at present for the operators of nuclear power stations to take steps which would foreclose technically or economically the option of completing the decommissioning process on an earlier timescale should that be required, and that they should recognise, when provisioning, the potential uncertainties regarding the timing of the second and third stages. Nevertheless, the Government confirm the preliminary conclusion of the review that there are a number of potentially feasible and acceptable decommissioning strategies for nuclear power stations available to the operator, including the safestore strategy proposed by Nuclear Electric and Scottish Nuclear. To ensure that operators' decommissioning strategies remain soundly based as circumstances change, they will be reviewed quinquennially by HSE, who will consult the Environment Agencies.

The Government recognise that, in addition to nuclear power stations, a variety of other nuclear facilities are in the process of being decommissioned, or are to be decommissioned in the future. As with power stations, decisions on decommissioning these facilities should be taken on a case-by-case basis and the same general principles apply in respect of timing. Proposals for dealing with such facilities will need to be included in the operators' decommissioning strategies.

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