Clause 80 - Crown application: Part 3

Energy Bill – in a Public Bill Committee at 3:45 pm on 31 January 2013.

Alert me about debates like this

Question proposed, That the clause stand part of the Bill.

Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy)

Clause 80 stipulates that regulations may

“provide for fees to be payable for, or in connection with, the performance of any the following functions (whenever conferred)” and then goes on to list those functions. A briefing provided by DECC officials in December advised that, at present, the nuclear industry covers 95% of the costs incurred by the ONR, with the other 5% provided from grants in aid through the DWP. According to that briefing, the proportions were changed to 98% from the industry and 2% from DWP, meaning the industry will cover a greater proportion of the costs.

However I have yet to understand completely, and perhaps the Minister can help, whether the Government expect the value of those costs to increase. It is welcome that the industry will bear a greater share of the burden, rather than taxpayers, but I would be grateful if the Minister could set out what estimate has been made, if any, of the monetary value of those costs. I do not accuse the Government of sleight of hand, but it is possible that while the taxpayer share of the cost falls as a proportion, in monetary terms it actually increases. I would be grateful for clarity on that specific point from the Minister.

Photo of John Hayes John Hayes The Minister of State, Department of Energy and Climate Change

Again, the shadow Minister makes a reasonable inquiry. To do its job properly the ONR needs to be properly resourced, and that is why the fee clause is part of these proposals. As part of the reform that we seek, the clause, in essence, widens the cost-recovery powers available to the current nuclear regulator. These amended cost-recovery powers will therefore be available to the ONR in future. I use the word “widens” because the existing regulator already has a range of cost-recovery powers at its disposal, for example under the Nuclear Installations Act 1965, and already recovers the majority of costs from those it regulates. It is established practice in nuclear, as in other high hazard industries, that a regulator’s costs are borne by the industry and not by the taxpayer. This clause will therefore supplement and expand on the nuclear regulator’s existing cost-recovery powers, up to the point where virtually all of the regulator’s costs will be recoverable from the industry.

I think that what lies behind the shadow Minister’s inquiry is a proper desire to ensure that this process is not a licence to print money. The ONR will not be able to increase its costs at random, but it needs to be confident in the knowledge that it can always recover such costs from the nuclear industry. The ONR is not designed to be a revenue-raising vehicle, and this measure is not a revenue-raising measure but one that is about cost recovery.

If the ONR has any proposals for new fees regulations, it must consult on such proposals under clause 60 before putting them to the Secretary of State to be made. The monetary value is around £1.5 million, in real value, to be precise. Furthermore, we would expect the ONR as a matter of good practice to consult the industry on any increases to any of its existing fees that it may propose. These costs are borne by the industry, so it is important that the industry is part of the process by which any changes are considered and made.

Finally, let me stress that there is nothing in this fees clause approaching a tax or a levy on the nuclear industry. That has been specifically ruled out. In essence, that does not change the process that has taken place, but it empowers and—as I described, but only in the terms that I described—widens the fee-recovery arrangement. So the passing of any fees to the employees or to those seeking or training for employment is also ruled out. The clause only enables fees to be charged in connection with specific regulatory functions delivered by the ONR to the industry. It is heavily constrained; there is nothing more.

Having given these reassurances, I beg to move that clause 80 stands part of the Bill.

Question put and agreed to.

Clause 80 accordingly ordered to stand part of the Bill.

Clauses 81 to 85 ordered to stand part of the Bill.

Schedule 10 agreed to.

Clauses 86 to 90 ordered to stand part of the Bill.