Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Jenkin of Roding moved Amendment No. 74:

The noble Lord said: In moving Amendment No. 74, I shall speak also to Amendments Nos. 75 and 77. When we ended our proceedings last week and the noble Lord, Lord Lea of Crondall, had moved an amendment relating to Clause 35, the Minister, the noble Lord, Lord Triesman, gave what seemed to me to be a very sensible exposition of the policy behind Clause 35. Although the noble Lord, Lord Maclennan of Rogart, suggested that he may want to return to this matter later, I found that exposition reasonably convincing.

However, Clause 35 does not stand alone because it refers to Schedule 5, which has subsidiary provisions relating to Clause 35. We come to the schedule after having dealt with Clause 35 last week. I believe I can deal with this point extremely briefly. I understood that most of the property that will be transferred under the transfer schemes, for which Clause 35 makes provision, are likely to be incorporeal. It is intellectual property rights and things of that nature that will go. I notice the noble Lord, Lord Triesman, nodding wisely and therefore I hope that I have that right.

If that is the case, there appears to be a gap in the Bill. Clause 45 makes provision for the Secretary of State to give information to assist the transfer. These three amendments simply seek to ensure that, if the transferor has received such assistance and information from the Secretary of State, those will be transferred as well. It seems to me ridiculous that they would not be transferred. I shall be interested to hear what the Minister says. However, I believe that at present there is a gap in the provisions of Schedule 5. Amendments Nos. 74, 75

27 Jan 2004 : Column GC68

and 77 are intended to fill that gap and make certain that, when the transfer takes place with the intellectual property rights and other—what I believe are sometimes called—incorporeal hereditaments, the information and assistance are transferred as well. I beg to move.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): These three amendments seem to deal with what is perceived as the hypothetical risk that BNFL and UKAEA could face claims for damages from third parties as a result of information being provided for a nuclear transfer scheme. I am not sure that the noble Lord, Lord Jenkin, has clarified such a situation where that may arise. Indeed, the formulation here on transfers relates very much to the formula that has pertained for other forms of privatisation in a number of Acts. However, as I understand the amendments, the purpose would be to extinguish such claims and, instead, to provide third parties with statutory rights of compensation for their extinguished schemes.

Unless we can pin down how that hypothetical question will arise, it is difficult to see why that would be necessary. Officials at our departments have spoken to BNFL and UKAEA and recognise that there is an anxiety in the background, but they can come up with no specific situation where such a claim from a third party is likely to arise in practice. It would be difficult to justify a statutory measure without being clear of the kind of situation in which it could possibly arise.

The transfer powers permit contracts with BNFL, including any confidentiality provisions in BNFL's contracts, to be transferred to another person and for references in those contracts to BNFL to have effect as though they were references to the transferee. Therefore, such confidentiality provisions can be protected and third parties would not have a case against BNFL or the transferee company. I fail to see that that is necessary and it is certainly not provided for in equivalent legislation in other circumstances.

Lord Jenkin of Roding: I have listened to what the noble Lord has said. Clearly, I shall want to study his words carefully and perhaps discuss them with the two organisations that he mentioned. It has been made clear to me that they see some difficulty in this matter, unless the information and assistance is included in the transfer process. That is what we are trying to achieve. However, the noble Lord has said that he cannot see any point in the amendment. We cannot press it today, so we shall consider what he has said. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 75 not moved.]

Lord Jenkin of Roding moved Amendment No. 76:

    Page 141, line 34, after "enactment" insert ", rule of law"

The noble Lord said: Amendment No. 76 amends paragraph 2(3) of Schedule 5. The point of this amendment is simple. I do not find this part of the Bill

27 Jan 2004 : Column GC69

the easiest to understand and it would be helpful if the Minister could go a little wider than the amendment and explain precisely what is intended.

My short point is that the United Kingdom is the country that invented the concept of the rule of law; that is not necessarily the law resting on statute but also resting on judge-made law in the courts, which binds the citizens of this country as much as though it had appeared in an Act of Parliament or in regulations. It is the law until it is changed by further decision in the courts. Therefore, it seems to me that if paragraph 2(3) refers to "enactment or agreement", it should also refer to rights or obligations that are established by the rule of law. I believe that that should be inserted in the Bill so that it is absolutely clear what is intended. I beg to move.

Lord Triesman: We carefully considered all those forms of words. I am inclined to agree that there is a degree of complexity that is probably unavoidable in a piece of legislation that is designed in every respect to cover all eventualities that can be imagined. It is difficult to do that in terms that are a great deal simpler. That is probably unfortunate, but it is the nature of the beast. What is intended here is that the wording that is currently in the Bill,

    "under an enactment or agreement or otherwise",

includes the concept of the rule of law. I understand perfectly well the distinction that the noble Lord made between enactments and matters that may result from decisions taken in the courts. However, enactments and the interpretation of enactments are in essence one and the same thing. The word "otherwise" probably covers the matter in any case. We and the lawyers believe that the framing of these words absolutely covers the intentions that the noble Lord expressed in moving the amendment. Therefore, we suggest that the amendment is withdrawn.

Lord Jenkin of Roding: I am grateful to the noble Lord for his assurances on this point. He conceded the point that this is pretty complex legislation. I remember once, as a very young barrister's pupil, sitting in court and the judge leaning over to the counsel on the other side and saying, "I am afraid that I do not understand your argument and therefore I think it must be wrong". I am not sure that I understand this clause but a clause in a Bill that becomes a section in an Act of Parliament cannot be wrong until it has been so held by the courts. However, the assurance that the noble Lord, Lord Triesman, gave to the Grand Committee seems to meet the case. In those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 77 not moved.]

Schedule 5 agreed to.

Clause 36 agreed to.

Schedule 6 [Structure etc. of transferee companies]:

Baroness Byford moved Amendment No. 77A:

    Page 152, line 40, leave out paragraph (b).

27 Jan 2004 : Column GC70

The noble Baroness said: I rise to move Amendment No. 77A and to speak also to Amendments Nos. 77B, 77C, 77D and 77E. Amendment No. 77A is a probing amendment. As I understand it, Schedule 6 governs the transfer to a publicly owned company—the transferee company—under a nuclear transfer scheme of property rights and liabilities from a company acquired under that scheme. Once the transfer has been made, the transferee company has to issue securities to the Secretary of State of a nominal value decreed by him fully paid in such amounts as he demands. The Treasury or a Minister may buy securities in the transferee company using money supplied by Parliament. A Minister may in either case dispose of securities acquired from the transferee company provided he has the consent of the Treasury. My question is, what is intended here? Why would the Treasury buy securities that can apparently be obtained quite legally for free? Why would a Minister dispose of such securities, and in this context would "dispose" always mean sell? If it does not, what would it mean? I was very confused by the paragraph.

I turn to Amendment No. 77B. Clause 22 is quite clear. Subsection (3) of Clause 22 states:

    "The NDA must pay to the Secretary of State all sums received by it"

that are not grants from the Secretary of State. I refer to line 44 of page 21 of the Bill. Subsection (4) of Clause 22 states:

    "The Secretary of State must pay sums received by him . . . into the Consolidated Fund".

Subsection (2) of Clause 5—at line 1 of page 5—opens the possibility that an installation designated as an NDA responsibility may be required to make payments to the Secretary of State. Subsection (8) of Clause 5 is unequivocal that the Secretary of State must pay all the sums received by him into the Consolidated Fund. Clause 39 allows for the transfer to the Secretary of State of the nuclear liabilities investment portfolio from BNFL. The clause also specifies that the cash from all other forms of income transferred in this way must be paid by the Secretary of State into the Consolidated Fund.

In the Explanatory Notes at page 32, note 159 states:

    "At 31 March 2003, the NLIP had a total value of 3.84 billion made up of around 2.34 billion in cash and Government gilts and 1.5 billion in short term fund-managed investments".

One way or another, that is a lot of money going in to the Consolidated Fund. We accept that the Bill sets up a system of recording what is owed to nuclear decommissioning activities. However, that is not the same thing as putting the moneys in a segregated fund that can be used only for nuclear decommissioning, unless the whole subject is debated and cleared by both Houses in the form of a new Bill.

On Amendment No. 77C, it is possible to accept that if the Secretary of State is making the loan, he should call the tune on when repayments must be made and how each shall be made. However, there must be an element of discussion and agreement. Moreover, the company in receipt of the loan should be aware of those factors when the loan commences. The fact that

27 Jan 2004 : Column GC71

recipients of such loans will be publicly controlled companies does not mean that they need or can make do with less control over their fortunes than private companies, most of which would be reluctant to enter a loan agreement without some idea of repayment terms. Will the Minister explain what is intended by the provision and whether in practice guidance would be binding on both the company and the Secretary of State?

On Amendment No. 77D, as with Amendment No. 77, any company in receipt of a loan needs to be confident that changes to the repayment terms will be negotiated, not simply imposed. Will the Minister give examples of existing government loans to publicly controlled companies where the terms include changes to rates or repayment times as may be directed? Also, are such terms frequently used or only in abnormal circumstances?

Lastly, I turn to Amendment No. 77E, which is another probing amendment. Schedule 7, paragraph 7(1) makes it possible for the transferee company to confer on the Minister the right to restrict the power of another company in the group to which the transferee company belongs to borrow money. That seems to imply that, for example, should one of our larger companies decide to allow a subsidiary to enter the nuclear decommissioning business, its own business freedom may be severely restricted. Will the Minister confirm whether that is possible? If so, will he explain the reasons behind the provision and the circumstances in which it may be used? I beg to move.

3.45 p.m.

Next Section Back to Table of Contents Lords Hansard Home Page