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Lord Davies of Oldham: My Lords, I have recognised that there is an opportunity later in the Bill for us to engage in that debate and I now see the one dimension that the noble Lord will introduce. Of course we must look at all constructive ways in which we can see such an important body contribute its significant resources. The Government's indication of where they prefer the headquarters to be shows our earnest intent to follow exactly the thinking of noble Lords who have contributed to our debate.

I was asked about the level of funding that the NDA will feel appropriate to commit to supporting local communities. That will be a matter for the NDA, subject to ministerial approval. We must allow the NDA to be established before expecting us to reach a view—it is early days. The estimates for the whole of the NDA's activity, a total budget in the order of £2 billion a year initially, are under consideration in the current public spending review process for the three-year period from 2005–06. That £2 billion is substantial and, as the noble Lord, Lord Maclennan, has spotted, indicates that there may be margins for discretion and judgment which may help the issues that he has identified.

My noble friend Lord Campbell-Savours will not be surprised that I cannot give him much solace regarding guarantees on longer-term spending levels. Decisions on public spending are taken at the appropriate time through the appropriate process and noble Lords will recognise that this is not quite that time and I am not quite the government representative to make commitments along those lines.

Baroness Byford: My Lords, I seek some clarification. The Minister kindly mentioned that he sees the role of the RDAs helping in this area. But the RDAs will have many other demands on their money. So, I am still concerned that the Minister is trying to

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pass responsibility to the RDAs to do what most of us consider to be the responsibility of the authority that is being established.

Lord Davies of Oldham: My Lords, the RDAs are equipped to deal with the significant social and economic issues that emerge in their areas. I already have evidence of the way in which the north-west RDA is addressing a clearly identified and significant problem in its area. It will be making both constructive suggestions and the strongest representations about the budgetary implications for tackling a problem—mentioned by the noble Baroness regarding her Midlands interests—which might not show itself with quite the same degree of force in any particular industry in the Midlands. I believe that she will recognise the salience of the issue. I am merely saying that, within the current framework, that is the role of the RDAs. The role of the organisation that we are considering in the Bill is of such importance that it would not be right for us to seek to translate it into the same vehicle for social and economic regeneration that is indicated in the amendment. I am not saying that the NDA has no role to play or that there are not substantial resources at stake. There are many opportunities that can be exploited as regards the work of the NDA and the RDAs, local employers and local authorities in addressing the situation.

However, the prime task of the NDA, with such substantial resources, is to tackle a national task on behalf of the whole of our community. Although I recognise that significant issues have been raised and noble Lords have identified what needs to be tackled in the areas mentioned, that is why I hope that the noble Lord, Lord Jenkin, will recognise that we cannot accept his amendment and I trust that he will withdraw it.

6.45 p.m.

Lord Jenkin of Roding: My Lords, I am immensely grateful to all those who took part in this debate. It has been a valuable occasion. Not only have we been able to explore the Minister's mind on how these problems should be dealt with but I believe that it will also be of some comfort to those who are following these events outside and who feel the threat as acutely as has been stated by noble Lords who have strong knowledge of particular areas.

For me, rather interestingly, this has been a trip down memory lane. It is 20 years since I was Secretary of State for the Environment in the mid-1980s, when I found myself intimately concerned with the problems about which a number of noble Lords have spoken—that is, the decline of heavy industries, sometimes concentrated very much in particular areas. I shall never forget my regular fortnightly visits to Liverpool and Merseyside, which was perhaps one area most hard-hit by the decline of what was then the shipping industry.

We had a number of instruments at our disposal then. Local development agencies could be a channel for central government money and a focus for activity. However, I entirely recognise that all that has now

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moved on. The Minister made frequent reference to regional development agencies and, in particular, to the activities that they are now conducting in the areas for which they are responsible. I took some comfort from what he said because I was unaware of how focused the RDA in the north-west of the country is. It recognises the need for activity.

As the noble Lord spoke, it seemed that one feature of this situation was, in a sense, the reverse of what one saw in other parts of the country in relation to other industries. The activity of the NDA in undertaking decommissioning means that it is itself a substantial employment user. There will be no sudden cut-off from that point of view. I would probably exempt from that the problems of reprocessing at Sellafield, but I do not believe that a final decision has yet been taken on that.

Normally, decommissioning plant—my noble friend Lady Miller and I had described to us by UKAEA and others what has been going on in various parts of the country in that respect—involves a fairly gradual rundown, whereas in respect of the earlier industries the problem was the catastrophic closure of a steel works, a shipbuilder or mines in a mining village in Yorkshire. I listened with interest to what the noble Lord, Lord Woolmer of Leeds, said about that. Then, one was dealing with a crisis situation, whereas, here, it will be somewhat different. Those who will have to deal with such problems in the area of nuclear decommissioning will have to recognise that they will probably require somewhat different solutions.

When we visited Harwell, we heard what UKAEA has been doing in the areas where it has been decommissioning. Winfrith in Dorset may be a very different kettle of fish from Dounreay or Sellafield; nevertheless, it is a fairly substantial nuclear facility and it has been wound down. With the creation of an industrial estate to bring in new works, those involved were quite proud of what they had been able to achieve. However, the situation is different from what one has been used to in the past, and I believe that that is something of which we shall have to take account.

The noble Lord, Lord Davies of Oldham, made frequent references to the fact that he did not want to see the NDA, the Nuclear Decommissioning Authority, turned into an NDA—that is, a national development agency. I can understand that. It has its primary task and I acknowledged that at the beginning when I moved the amendment. Of course, that is its primary role. It has to go ahead with decommissioning and clean up. But is it sufficient that they shall merely have the power to collaborate with other agencies, the local authorities, the regional development agencies, the task forces and so on that have been set up? I am not sure that it is.

We shall need to look carefully at what the Minister has said. We shall have to consult those who have supported the amendment. It may be possible to come back at Third Reading with a somewhat different amendment which may take account of the anxieties that the Minister has expressed in his reply. I hope that those who have spoken to the amendment will feel that

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that is a reasonable response. It would be difficult to go charging through the Lobbies at nearly seven o'clock on a Thursday evening—I am not sure how many noble Lords are here.

We have to take account of what has been said. We shall consider returning with something more than just the power provided for in the Bill, something which recognises, quite clearly, the arguments that the Minister has made, while at the same time giving more reassurance to the communities who feel themselves so threatened at present. I am also sure that this issue will be dealt with at some length in another place. Ours will not be the last words spoken on the matter. Having said that, I hope that those who have supported the amendment feel that a reasonable response is to say that I shall withdraw it, with a clear undertaking that we shall try to return with an amendment at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 [Duties to operate installations and to provide treatment etc.]:

Baroness Miller of Hendon moved Amendment No. 35:

    Page 16, line 9, at end insert—

"(5) In discharging that responsibility and in performing its designated responsibilities under section 3, the NDA shall place no restriction on the UKAEA or BNFL or any other suitably qualified and experienced British or other European Union company from tendering for and (if appropriate) being awarded contracts for the decommissioning of installations or the cleaning up of sites."

The noble Baroness said: My Lords, I introduced an identical amendment in Grand Committee. I have no hesitation in bringing it back for consideration by the whole of your Lordships' House because of the unsatisfactory and partly contradictory reply that I received; because it is a very important issue; and because of the well intentioned, but equally unsatisfactory explanatory letter that I received from the Minister about two weeks later.

Contradiction appears to be a feature of the Government's approach to our two major and world leading companies which compete for decommissioning and clean-up work, even on the sites that they occupy or have been operating. I would have thought that this topic was one that was not even open to question. I would have thought that the Government would have accepted it at the beginning. Initially, the view of the Government seems to have been that it was not open to question. On page 13, paragraph 1.23 of the White Paper, Managing the Nuclear Legacy, the Government said:

    "Whilst UKAEA and BNFL will have the opportunity to demonstrate that they should be suppliers of choice to the LMA"—

that is now the NDA—

    "the management of clean up will be opened up to competition".

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Thirty-seven pages later at paragraph 5.39 the Government contradicted themselves in a massive U-turn when they said:

    "The Government does not consider that it would be appropriate for UKAEA as a public sector body to compete for additional site management contracts against firms from the private sector".

That contradiction and the arbitrary, capricious and inexplicable decision of the Government, prompted the amendment in the first place. In the debate in Committee I asked for the origin of what I thought was a novel doctrine. I also asked why it was inappropriate for public sector companies to compete for publicly funded contracts. Indeed, the White Paper highlighted the guiding principles to be followed by the NDA in awarding contracts. Again, I quote the Government's words:

    "getting the job done to high safety and security standards . . . best value for money consistent with safety, security and environmental performance . . . openness and transparency . . . competition—so as to make the best possible use of the best possible skills".

While I hesitate to quote myself, I cannot resist repeating what I told the Committee, namely, that that specification might have been written with UKAEA and BNFL in mind. Those two companies are world leaders in their fields. With the advantage of being established on the nuclear sites, it is likely that they will be able to offer the best value for money. By invoking this specious and hitherto unknown doctrine that it is inappropriate for public sector companies to tender for publicly funded contracts, the Government are simultaneously negating both openness and transparency, and depriving themselves of the services of two of the world's leading companies.

I also suggested that the policy would be in breach of the anti-competition provisions of Article 85 of the Treaty of Rome. The Minister gave a wholly unsatisfactory explanation for rejecting that amendment. First, he said that it would threaten the ability to exclude people from the pre-selection process. We are not talking about regiments of people—we are only seeking to ensure that UKAEA and BNFL are not arbitrarily excluded. Secondly, he suggested that while the two companies would remain in place as site licensees, it is only the strategic and senior management function that would be open to competition. Even assuming that these two leaders in their field need senior and strategic management, this is a sure way of paying for the same job twice.

The Minister suggested that contrary to my view about Article 85, there was some restriction in European law that prevented them from being allowed to compete. From a sedentary position, I must have facially expressed some surprise at this extraordinary suggestion, because the Minister was good enough to write to me subsequently to say that he,

    "realised that his remarks were too sweeping in nature and could be confusing".

Well, he certainly got that right.

This amendment does not in any way inhibit the right of competitors to bid for contracts, in conformity with EU law. Indeed, the two companies say that they welcome competition, but I suppose they would say

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that. That the two companies have an inherent advantage of being on site is not a valid objection. Any successful bidder in any contract competition has some sort of advantage. In a convoluted argument in the same letter, the Minister suggested that having lost the clean-up contract, would somehow,

    "hold the operational skills and expertise necessary to operate the sites".

As if the workers would just stand still and watch their jobs disappear from beneath their feet rather than take off elsewhere, perhaps abroad.

In his letter, the Minister denied that UKAEA and BNFL are uniquely placed as incumbents to provide a competitive clean-up service. Maybe not uniquely, but they must be at least as qualified as any other contractor to do this job. The Minister told me in his letter:

    "There are a number of potential site management contractors who could manage nuclear sites safely and effectively."

That is good news. Let them come and try for the contracts, and hopefully the best company will win, and we shall benefit from the best expertise and the best value for money. In Grand Committee, I said that I did not know what hidden agenda the Government had in imposing this unnecessary, and as it happens illegal, restriction on these two companies. On reading the Minister's letter, which I have quoted only in part, I am far from reassured that there is not some ulterior motive in leaving the field open to foreign competition and depriving our national companies of valuable contracts and depriving our skilled work force of jobs. Goodness knows, listening to the previous amendment, how well it was moved and the concerns of people from across the country, it is inappropriate that they should not even be allowed to compete for work.

This amendment does not require the NDA to award the contracts to UKAEA or BNFL. What it does is to prohibit the NDA from deliberately not even allowing them to compete. That is the issue. I shall certainly want some much better explanation for the Government's obstinate stance of keeping them out of the market than the feeble non-arguments that the Minister has made so far. I sincerely hope that, given the time that the Minister has now had to think about it since we last debated the point, he will have reconsidered his position and will not simply continue to repeat the Whitehall doublespeak that he previously passed on to the Committee. It is late in the evening. It would be appropriate for the Minister to simply stand up and say that he agrees with and accepts my amendment. I beg to move.

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