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Baroness Miller of Hendon: I thank the Minister for his remarks. As he is accepting the amendment, there is no reason why he should not provide the technical drafting. That would include the second part that I mentioned; namely, that this should be by positive resolution of both Houses, not just one. We hope that the Minister will be able to take advice quite quickly, so that when we return to the amendment on Report we shall know whether or not that is acceptable. In any event, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 2 shall stand part of the Bill.
Lord Gray of Contin: I had not intended to speak on Clause 2 stand part. However, when I arrived today, I found that my noble friend Lord Jenkin of Roding had added his name to most of the amendments. I did not feel inclined to disagree with him each time, so I thought that I would keep my few remarks for the clause stand part debate.
I strongly supported the Bill at Second Reading, and I still do. The Minister has dealt adequately with the amendments that have been moved. The answers he has given certainly satisfy me, if not my noble friends—but that is part of life.
It would be a mistake, as was suggested in relation to Part I, always to create a set of prohibitions to be included in the Bill—for example, that money must not be used for this, that, or whatever—because one never knows what may lie in the future. For example, at some future time British Energy might have a subsidiary which might be involved in some kind of arrangement with a chemical company. Is the intention to have a Bill that would prohibit the transportation of dangerous chemicals? Why do we always pick on the nuclear industry? It seems to be the easy target when people want to launch criticism.
I strongly support the nuclear industry and want to do everything to encourage it. I do not want to see anything included in the Bill or removed from it that might, at some future date, be of disadvantage to the industry. That is my main concern.
[The Sitting was suspended for a Division in the House from 5.5 to 5.15 p.m.]
Lord Gray of Contin: I gave the example of a possible association with a chemical company. But it does not stop there. At some time in the future, British Energy might have a relationship with a company involved in coal purification—dear to the heart of the noble Lord, Lord Ezra. Are we to include that in the list of companies with which it will be prohibited from dealing just because, in years gone by, the coal industry was a major polluter, when today it is a most attractive source of power generation?
My noble friend Lord Jenkin of Roding was a distinguished Chief Secretary to the Treasury. But all those chaps who go to the Treasury never quite lose its influence when they leave. Something gets into their nature. They query everything to do with expenditure—which is probably a very good thing.
I have had personal experience of this. Between 1979 and 1981, I was Minister of State for Energy. In the autumn of 1981 there was a Cabinet reshuffle. I was on holiday at the time, and my private secretary telephoned me, saying that I would be interested to hear who was the new Secretary of State for Energy. She told me that it was Mr Nigel Lawson—with whom I had been fighting for almost all of the previous two years when he was Financial Secretary to the Treasury. However, I learnt that those in the Treasury can change a little. Nigel Lawson taught me a great deal about the Treasury and how people there should and
should not be approached. He got more out of the Treasury in his first year as Secretary of State for Energy than we had in the previous two. But that is beside the point. I am sure that my noble friend Lord Jenkin has the same gift, although he is not prepared to use it at the moment.Whatever restrictions are placed on the use of money which may in the future be available to the company, I do not want anything ruled out if doing so would bring disadvantage to the nuclear industry in general and to British Energy in particular.
Nuclear waste is divided into several categories. The key problem lies in the disposal of the most highly active, long-lived components; namely, the used fuel elements, and, if reprocessed, the material left over. I refer to separated plutonium. But, given present technology, the waste package can be kept intact for several thousand years and stored in a deep burial chamber. Such repositories could be created without any problems. They already exist elsewhere. However, the "nimby" factor has yet to be overcome in the United Kingdom.
It would have been so much easier for all those with interest in energy had the Government, in their recently published White Paper, been more positive and more definitive in regard to the various uses of energy and what will, and will not, be acceptable. They have left the energy industry in a difficulty: no one is quite certain just how much of any particular type of energy will be in favour. That applies particularly to the nuclear industry.
Come what may, the nuclear industry is, and will be, essential for power generation in this country for the foreseeable future. It may be, costs being what they are, that the only way in which nuclear energy can truly progress is by a combination of interests. I refer not only to interests from within this country but European interests. Nuclear energy has been very successfully developed in France, for example. It seems tragic that, certainly in Scottish universities at the moment, there is no course for nuclear technology in this country. One day, we may have to go begging to our European neighbours in a field where we once took the lead.
Whichever government have to take these decisions, it will take a lot of courage and a lot of resolve to spell out the future for nuclear power. I hope that the Bill will lay a foundation to help British Energy and all the other generators to recover and prosper in the future. I single out British Energy not only because the Bill deals exclusively with that but because it is our largest generator of electricity from nuclear power.
The fact that the Government have stepped in to save British Energy is commendable. I think that it would have been outrageous for the Government not to come to the aid of British Energy. I pay tribute to them for that. They do plenty of other things for which I would not pay them tribute, but I believe in giving credit where it is due. As far as I am concerned, they have done a good job here. I shall continue to support
the Bill. I hope that, despite the enthusiasm of my noble friends, nothing will be deleted from the Bill on Report.
Baroness Miller of Hendon: I should like first, if I may, to tell my noble friend Lord Gray of Contin that I am truly sorry. He had great difficulty in not opposing the first few amendments because our noble friend Lord Jenkin of Roding had put his name to them and he wanted to be seen to oppose our noble friend only once. I am very sorry about that.
We on this side oppose the Question whether Clause 2 should stand part, although I readily admit that affirmative resolutions will make the provision somewhat better. I agree with my noble friend Lord Gray of Contin that we certainly would not want to do anything that failed to ensure a nuclear dimension to our energy mix. The trouble with the Bill, and particularly with Clause 2, is that it is too wide and is taking all the other provisions with it. That is the problem. We wanted to open up that debate for consideration.
I shall not repeat the points which I made in earlier debates about the need for regulations to be approved by affirmative resolution. We seem to have reached that position. However, I should like to draw the Committee's attention to the serious—perhaps even sinister—implications of Clause 2(1), which in my view has been slipped into the Bill for no valid reason. The provision bears no relationship to the Bill's objectives and does nothing whatever to further those objectives. As we heard, Clause 2(1) repeals Sections 72 and 74 of the Electricity Act. It is not necessary for me to trouble noble Lords with the complicated and convoluted provisions of the two sections themselves as the excellent Explanatory Notes outline the provisions very well. I should like instead to quote from the Explanatory Notes in a slightly abbreviated form. They state that Section 74,
- "originally ensured that the privatisation of a Government owned electricity company could not be subsequently reversed. It did this by restricting the Secretary of State's common law powers to acquire ordinary shares in certain privatised . . . companies beyond a specified limit".
- "is a special provision for purchase of shares in successor companies (which . . . comprise certain of the privatised electricity companies)".
Clause 2 proposes simply to remove those restrictions. In other words, the Government want the power to purchase shares in privatised electricity companies—the very power that the Government admit those two sections were expressly passed to prevent. Specifically, the restrictions were intended, in the Government's own words, to prevent re-nationalisation. They do that under the pretext of the Explanatory Notes, which blandly claim:
- "In the main, Part 2 has served its purpose and the provisions no longer apply or are now irrelevant".
Who, apart from the Government and the unions, says that the threat of re-nationalisation is no longer relevant? Who says that inhibitions against
nationalisation or re-nationalisation have served their purpose? At the TUC conference only last year, a resolution was unanimously passed calling for British Energy to be re-nationalised. Sure enough, the Government included that provision in this Bill. Mr Wilson admitted to another place:
- "It is true that repealing that provision could, in theory, permit the Government to acquire shares in certain other electricity companies where we cannot currently do so, but I stress that we have no intention of doing so".—[Official Report, Commons, 27/1/03; col. 589.]
As I mentioned at Second Reading, I naturally accept the Government's assurance. At 4.50 p.m. on 27th January, when the assurance was given, the Government probably did not have any such intention. I am sure that the Minister will repeat something similar this afternoon.
We would like to put temptation entirely out of the way. If the Government change their mind and decide that re-nationalisation of electricity companies or any other company is necessary, let them come back to Parliament and specifically seek the power to do so rather than indulge in such a method at this stage. The Labour Party did not include in its manifesto for either the 1997 or 2001 general election any pledge to nationalise or re-nationalise anything. The Government do not have a mandate to do that, especially using this section of the Bill to do so virtually through the backdoor as the Minister in another place accepted could happen.
In the call for re-nationalisation of British Energy at the TUC conference, John Edmonds, the leader of the GMB, called for what he called a Railtrack-style solution. I leave that on the table, the Government's manoeuvres that drove Railtrack into administration and, therefore, enabled the Government to appropriate it without compensation to the shareholders were in effect an act of re-nationalisation.
The Prime Minister claims the credit for removing Clause IV of Labour's constitution, which expresses an aim to secure,
- "the common ownership of the means of production, distribution and exchange".
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