Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I beg to move amendment No. 45, in

schedule 1, page 151, line 11, leave out 'five' and insert 'three'.

The amendment would reduce the appointment time of the chairman and non-executive members from five years to three. While I would be the first to recognise that we can argue for ever more about how many years it should be, I felt that five might be somewhat excessive, especially for a completely new organisation. I would welcome the Minister's comments and perhaps an explanation of why he feels that five years is appropriate at this point in the cycle.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

The hon. Gentleman makes an interesting point. The NDA has a particularly long-term task. It will conclude contracts for the clean-up of its sites, which will be long-term contracts of about five years, with options for renewal. In that light, it makes sense to provide for similar continuity in the make-up of the NDA board. The Office of the Commissioner for Public Appointments allows for appointments to extend for up to five years. It is appropriate for NDA appointments to be able to be extended to that

maximum length, although the provision does not preclude briefer appointments if those were appropriate in particular circumstances.

The hon. Gentleman makes a fair point about the organisation being at its very beginning. It is likely that there will be different periods of service for people appointed to the board right at the start, if only to avoid wholesale change in its composition after the first terms are concluded. However, it is appropriate to allow for appointments of up to five years.

Renewal of NDA appointments is also provided for in the Bill, but we have made it clear that we will follow the guidelines of the Office of the Commissioner for Public Appointments, which allow for one reappointment and a maximum length of service of 10 years. Justified exceptions can be made, and we want to preserve that flexibility in case it is needed.

The points made by the hon. Gentleman are fair, but given the long-term nature of the task that the NDA faces and the contracts into which it will enter, five years is a sensible point at which to set the term.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I am grateful to the Minister for his explanation. He makes a good point about the long-term nature of the work that the NDA will undertake and the consequent long-term nature of the NDA itself. I am happy to accept his advice on that matter. However, I am slightly concerned that he says he will follow the guidance on public appointments. I think he said that it is likely that there will be scope for only one reappointment and a maximum term of 10 years.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

Except in exceptional circumstances. That is the norm.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I am grateful to the Minister for that clarification. Paragraph 1(3) of the schedule states that

''a person is eligible for re-appointment (on any number of occasions)''.

There is therefore a slight discrepancy. There is an inconsistency between the Minister saying that he does not envisage an appointment continuing for longer than 10 years and the statement that people could be eligible for reappointment

''on any number of occasions''.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

I am grateful to the hon. Gentleman for allowing me to clarify that matter. The legislation allows for extensions, as he suggests, but the Government's practice will be to conform with the guidance of the OCPA, which normally allows for two terms with the possibility of a further extension in exceptional circumstances. The legislation must allow for such extensions, but the Government will apply the OCPA guidance.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I am grateful to the Minister for that explanation, which is now on the record. It might have been better to re-word paragraph 1(3) to reflect it and perhaps to say that an appointment would be for two terms, except in exceptional circumstances. That would have been clearer and more transparent.

However, I do not wish to extend the debate and therefore I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I beg to move amendment No. 46, in

schedule 1, page 152, line 5, at end insert

'following consultation with the Chairman of the NDA'.

Mr Jonathan Sayeed (Mid Bedfordshire, Conservative)

With this it will be convenient to discuss the following amendments: No. 103, in

schedule 1, page 152, line 11, leave out sub-paragraph (3).

No. 49, in

schedule 1, page 154, line 9, at end insert—

'Limit on employment costs

6A The total cost of employment of executive and non-executive members of the NDA, including pensions, allowances and gratuities, shall not exceed £750,000 in the first year of its operation, to be increased in line with inflation each year thereafter.'.

Mr. Robertson: Amendment No. 46 is, in a sense, circular. It refers to paragraph 2, under which the NDA may pay to the chairman and to each of the non-executive members

''such remuneration and allowances as the Secretary of State may determine.''

It might therefore seem slightly odd to require the Secretary of State to consult the NDA about what it pays the chairman and the non-executive members, but I think it has been worth tabling the amendment.

Amendment No. 49 is more important, as it would place a limit on the employment costs of executive and non-executive members of the NDA. The Bill is in danger of creating a body with a great many highly paid people. The amendment therefore provides that the total cost should not be more than £750,000. We could argue about that figure, but I believe it is reasonable, although the Minister will probably say that there should be no figure at all.

What bothers me is what can be paid to executive and non-executive members. Apart from salaries, there are pensions, allowances and gratuities. I am concerned that the cost of running the organisation at senior level should not be allowed to run away. Briefly, I would welcome the Minister's explanation of how the cost of the NDA board will be financed. What percentage will it take of the running costs?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

I think the proportion will be small. We expect the NDA's long-term programme to cost about £50 billion. In that context, the amounts of money we are discussing are quite small. However, I share the hon. Gentleman's concern to ensure the efficient and effective use of public resources.

Like other non-departmental Government bodies, the NDA will have to justify its administration expenses in its annual plan, which the Secretary of State has to approve each year. It does not make sense to impose a limit of £750,000 on the cost of the board. Even if that figure was right now, it is likely that it will

not be right in future. As I said, the authority's remit will extend for many decades, so the Bill stating a figure would be unhelpful.

As the hon. Gentleman said, it is odd to provide for a statutory consultation of the chairman for the chairman's own terms and conditions. Like the pay and allowances of other non-executive members, they should be a matter for negotiation between contracting parties rather than for statutory consultation, as amendment No. 46 provides. This is a matter of applying the normal arrangements that apply to public bodies.

Amendment No. 103 would remove the option for compensation to be paid to non-executive members should the Government wish to remove them before the conclusion of their term. It would be very unusual to rule out in statute the normal operation of existing contractual and employment law, which governs relationships between employer and employee.

On the hon. Gentleman's general point, I understand the anxieties often expressed about arrangements such as the seemingly over-generous golden parachutes, and I understand and share the concern about some practices that are applied elsewhere. We certainly do not want to enter into unnecessary obligations to pay compensation. The balance that we have struck in this part of the Bill reflects arrangements that apply elsewhere.

The hon. Gentleman asked about the NDA's running costs: we estimate that they will be between £25 million and £30 million a year. The board's costs on commencement are likely to be between £750,000, which he proposes, and £1 million.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I thank the Minister for that response. His last sentence won me over, so to speak, because he concluded that the figure I proposed—about £750,000—is not too ridiculous. Given his sympathetic remarks on the need to control costs at the top of the organisation, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr Norman Baker (Shadow Secretary of State for the Environment, Environment, Food & Rural Affairs; Lewes, Liberal Democrat)

I beg to move amendment No. 125, in

schedule 1, page 154, line 11, at end insert—

'Public annual general meeting of the NDA

6A (1) The NDA shall make arrangements for a general meeting of the NDA to be held in public during the course of each calendar year.

(2) The NDA shall take all practicable measures to ensure that members of the public with an interest in the activities of the NDA are given reasonable notice of the meeting held in accordance with the provisions of sub-paragraph (1).'.

I mentioned three tests that I am seeking to apply to the NDA: transparency, independence and the reduction of the waste problem. The Minister appeared to sign up to those objectives when he talked about clause 4, and I hope that I can offer him many opportunities to show that he intends to adhere to them. Here is another one involving transparency.

Like the hon. Member for Tewkesbury, I am unsure whether the NDA is officially a quango, but it is quite normal for quangos to hold one meeting every year in

public as a sign of public accountability. The Minister will be aware that the theoretical line of accountability through the Secretary of State may satisfy constitutional propriety, but it does not necessarily meet those tests in reality. If he wants the NDA to be transparent, the amendment is a clear way to achieve that objective.

It is entirely uncontentious to ask the NDA to meet once a year, as such a meeting would offer an opportunity to present its programme, reflect on the work that it has done during the year, take questions and generally be accountable to the press, the public and Members of Parliament. Of course, we all accept that confidential matters, such as contractual arrangements, will occasionally arise, and it is normal in meetings for such items to be dealt with differently. There are no objections to that because confidentiality can be protected. It is sensible for the proposal to be taken further and I look forward to the Minister's positive response.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I rise briefly to support the hon. Gentleman's amendment. One problem that the nuclear industry has perhaps had in the past—reference was made to it this morning, although I cannot remember which Member used this word—was its mystique. As we move forward and clean up various operations, the NDA must be seen to be transparent and work with members of the public. I cannot think what objection there should be to the amendment, but I am sure I am about to hear it from the Minister.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

The White Paper made the point that the NDA should champion openness and transparency, and that it should help to dispel what I referred to earlier as the aura of mystery and mistrust, which has been so damaging to the nuclear industry's reputation. It will be important for the NDA to win public confidence through regular engagement with interested parties and communities, and we have made explicit provision to achieve that.

Clause 15(3), which we will come to later, requires the NDA to set out its objectives for stakeholder engagement in its strategy. That provision was added following comments on the draft legislation during a good process of consultation. When consulting on its strategies and annual plans, the NDA is also required to have regard to any representations made by the public, while its strategies, annual plans and annual reports will all be published, subject to appropriate exclusions. In the DTI, we have also been preparing a stakeholder engagement framework, which has been developed out of the two rounds of regional events that have taken place in the last year. The NDA will take on that framework, and develop and maintain it.

I completely agree with the concern to see that the NDA conducts itself openly and transparently to secure the public's confidence. However, it is also important that it has the flexibility to decide how best to fulfil its remit and deliver on its objectives more widely. Paragraph 10 of schedule 1 explicitly provides for the NDA to have flexibility in deciding its own procedural arrangements. Nothing in it rules out the

possibility of a public annual general meeting, but I believe that we can leave the NDA to make such decisions for itself. For example, the NDA may decide that it would be better to have several smaller, regional meetings rather than the one meeting that the amendment envisages.

Those outside the House will see from the record of our deliberations our general agreement on the desirability of arrangements along the lines of those set out in the amendment, although the question whether the NDA chooses precisely that or something else can be safely left with it. It will be essential that the NDA promotes a strong sense of public interest in, awareness of and confidence in what it is doing. Meetings of various kinds will help to achieve that.

Mr Norman Baker (Shadow Secretary of State for the Environment, Environment, Food & Rural Affairs; Lewes, Liberal Democrat)

When the Minister began and talked about championing openness and transparency and dispelling the aura of mistrust, I thought, naively, that he might be prepared to accept my amendment. He was certainly speaking along those lines. In the end, however, we have had every possible assistance short of actual help, although he has suggested that the amendment is jolly good without being one he can accept.

The Minister mentioned regional meetings, and it would be possible for the NDA to arrange such meetings under clause 15(3). Nothing in my amendment would preclude that, so his point is something of a red herring. However, I suppose that him saying that he agrees with the principle—or words to that effect—is as close as I am going to get to having an amendment accepted by the Government.

I look forward to the operation of the NDA, although it would have been helpful for the amendment to be accepted. It would not have tied the NDA's hands and prevented it from undertaking the consultation and achieving the openness that it wanted. A public AGM is normal practice, which is why I tabled the amendment in such terms, but in the light of the Minister's comments I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That this schedule be the First schedule to the Bill.

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

I would like to have a small bet on schedule 1 standing part of the Bill.

I should declare a small interest, as the first constituency I fought was Workington in 1987. I was not as successful as my hon. Friend the Member for South-West Hertfordshire (Mr. Page), who represented Workington for the Conservatives in 1976. To paraphrase the Minister, the year 1987 falls somewhere between the Gas Act 1986 and the Electricity Act 1989.

Schedule 1 adds meat to clause 5, and I was taken by the information, which we received from the Minister in response to my earlier query, that the Sewel motion has been passed, allowing for joint action under a devolved settlement on nuclear matters. I want to press him further and ask under which particular legislation

that joint action has been agreed, as there seems to be a discrepancy as regards what energy matters are devolved to Scotland or reserved under existing law.

Under the Scotland Act 1998, all matters of regulation, apart from water, are reserved and therefore outside the competence of the Scottish Parliament, whereas under section 3 of the Electricity Act 1989 such matters are devolved to the Scottish Parliament. I am not familiar with energy matters relating to Scotland, so I have relied on a book by Cosmo Graham, ''Regulating Public Utilities: A Constitutional Approach'', which explores the subject in detail. Will the Minister tell us which legislation he is relying on, particularly with respect to nuclear energy?

According to paragraph 1(8) of schedule 1:

''Before exercising his power under sub-paragraph (6)'',

which refers to removing the chairman or a non-executive member from office,

''the Secretary of State must consult the Scottish Ministers.''

Has that also been agreed under the Sewel motion, or is it yet to be considered by the Scottish Parliament?

According to the regulatory impact assessment, the agreement of the Scottish Parliament is required. The NDA will have functions that relate to reserved and devolved matters, so it will have a similar status to a cross-border authority. What other cross-border authorities exist in the energy field? Schedule 1 sets out responsibilities that Scottish Ministers will have in relation to the operation of the NDA and to the arrangements to ensure the accountability, where appropriate, of the Scottish Parliament as well as Westminster.

Page 16 of the regulatory impact assessment states:

''Expectations are that the establishment of the NDA will lead to cost efficiencies over the medium to long term.''

The Minister informed my hon. Friend the Member for Tewkesbury that the annual running costs will be about £25 million to £30 million a year, with salary costs of £750,000 to £1 million a year. Schedule 1 sets out most of the NDA's set-up and operational costs, so where will the medium to long-term savings be made?

According to page 17 of the RIA:

''Primary legislation is required to set up the NDA to exercise statutory powers in respect of managing public sector nuclear liabilities and to provide a publicly accountable body subject to Parliamentary scrutiny for the spending of £50 billion plus of public money over the next 60-100 years''.

That is a firm commitment that the spending will be £50 billion plus. How does that compare with what the running costs of BNFL would have been? Would the costs cover the need

''to facilitate, if necessary, the transfer of assets vested in BNFL by the Atomic Energy Authority Act 1971 out of BNFL and otherwise enable restructuring of the company to take place''?

It would be helpful if the Minister shared that information with the Committee.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

Sadly, I have not had the opportunity to read the splendid book to which the hon. Lady drew the Committee's attention. Essentially, the arrangements that I referred to, which are reflected in the drafting of the legislation in respect of Scotland,

were put in place under the Scotland Act 1998 when powers were devolved to the Scottish Parliament concerning parts of the Radioactive Substances Act 1993 and the Nuclear Installations Act 1965, which I mentioned. There is more detail about exactly what will happen in Scotland in clause 9, which we shall come to shortly. If the hon. Lady needs more detailed information on that topic, she can drop me a line and I will ensure that it is promptly provided.

The hon. Lady raises the question of where the savings are going to come from. I anticipate that the largest savings will arise from the introduction of competition to the selection of site operators, which is a core part of what the NDA can achieve. Evidence from the United States shows that substantial savings can be achieved by introducing such competition. We would expect to realise that objective. Precisely how great those savings will be is a matter for speculation, but they are likely to be significant given the large scale of the public spending—£15 billion—that we expect over a long period. Given the scale of that budget, quite modest percentage savings will add up to a lot of money. The creation of the NDA will be a helpful step in realising them.

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

I am grateful to the Minister for his comments. I was quite specific, and perhaps we can explore the matter further under clause 9. It would appear that there is some discrepancy. I do not want to detain the Committee for long, but the Scotland Act 1998, to which the Minister referred, is specific on the point that all matters of regulation are reserved. I am not completely satisfied on that point, but we can explore it further in the context of clause 9.

Question put and agreed to.

Schedule 1 agreed to.