[Frank Cook in the Chair] — Nuclear Industry

Peter Luff (Mid Worcestershire, Conservative)

The Trade and Industry Committee produced its fourth report of the 2005-06 Session, "New nuclear? Examining the Issues" on 10 July 2006, the day before the Government published the conclusions of their energy review consultation, "The Energy Challenge". I express my gratitude to the Committee's staff, especially Rob Cope, the Committee's then very new specialist, and to the whole Committee for its extraordinary efforts in getting the report published before the Government brought forward their statement on the energy review. Meeting the deadline was a considerable challenge to the Committee and I am grateful to everyone involved for the parts that they played.

Before I turn to the substance of the debate, I make two parliamentary points. First, I am sorry that the House has not had proper notice of the debate, and I attach considerable importance to that. For reasons that I do not understand, the Leader of the House failed to mention forthcoming Westminster Hall debates in his business statement on the Thursday before the recess, which meant that the Table Office and House authorities were not aware of the subject of this debate. When I returned to the House after Easter on Monday, I was alarmed to find that today's subject was still not on the Order Paper. I went to the Table Office, which was, as always, very obliging and helpful. It did some research and found that this debate was to go ahead and the information appeared on the Order Paper for the first time on Tuesday of this week. This is an exceptionally important subject for the country and for many Members of Parliament, who will be sorry that they did not know about the debate. I am sorry to see a relatively small number of my colleagues here, but no blame attaches to them because they did not know that the debate was happening—that goes for my colleagues on both sides of the House and on both sides of the argument.

Secondly, and perhaps more flippantly, I am delighted to see the former Energy Minister in his place to reply to the debate. He was an excellent Energy Minister by any standards, and I have considerable personal regard for him. However, it worries me that the Minister routinely responsible for energy policy is not in this place but in another place, because it puts a considerable burden on the Minister for Science and Innovation when the Secretary of State for Trade and Industry is not available to answer debates and questions. Given the huge importance of energy policy to the future of the country, it would be better to have a Minister for Energy answerable regularly to the House of Commons as we used to have before the ennoblement of the current Minister.

I feel for the Minister for Science and Innovation—he has many ancillary responsibilities, such as that for skills, on top of his science duties, as I found when he came before my committee recently. Perhaps we ought to tag him to give us an idea of the extra responsibilities he undertakes on top of those to do with the science and innovation. That way, we could see where he is when not doing the job he is described as doing in the directory of ministerial responsibilities.

Malcolm Wicks (Minister of State (Science and Innovation), Department of Trade and Industry; Croydon North, Labour)

The hon. Gentleman is doing well.

Peter Luff (Mid Worcestershire, Conservative)

I am grateful for that admiration; the feeling is mutual.

The Trade and Industry Committee decided to look at three major aspects of the Government's review of energy policy: nuclear power; local energy, as we call it; and the security of our gas and coal supplies. The report was the first of three, but it was also the most difficult. The debate about nuclear power raises considerable passions. I decided that the Committee could not reach a decision on whether, in Sellar and Yeatman terminology, nuclear power was a good or a bad thing. However, the Committee could inform debates on the subject in the House by looking dispassionately at the issues and reaching definitive judgments on as many of them as possible. Its approach was similar to that adopted by the Defence Committee during the recent consideration of the decision on the replacement of the Trident nuclear deterrent. By way of a tribute to the co-operative spirit of the Trade and Industry Committee, I am delighted that it was able to produce a unanimous report. Irrespective of their long-held views, members of the Committee engaged objectively and dispassionately with the evidence, which is what Select Committees should do.

There is one negative conclusion that I should emphasise at the beginning of my remarks: nuclear power is a low-carbon technology. Some campaign groups and, indeed, some hon. Members, argue that, taking full account of construction and decommissioning and the extraction and processing of uranium, the carbon cost of nuclear power is much higher than the industry claims. It is true that nuclear power is not zero-carbon. No energy source of which I am aware is. It is low carbon, just as renewable energy is only low, not zero-carbon. Renewable energy also has carbon costs associated with construction and distribution. However, if we take full account of all stages of the plant's life cycle, in carbon terms, nuclear is every bit as good as renewable energy in respect of carbon emissions. My Committee agreed unanimously that the often heard argument against nuclear power should not be used.

Michael Connarty (Linlithgow and East Falkirk, Labour)

I presume that, during its inquiries, the Committee looked at the report of the Parliamentary Office of Science and Technology on the lifetime carbon footprint of all sources of electricity generation. In fact, nuclear—using uranium—is the lowest lifetime carbon footprint of all the generators.

Peter Luff (Mid Worcestershire, Conservative)

I am reluctant to overstate my case, but that is indeed what most of the evidence suggests—a point endorsed by Sir Jonathon Porritt when he came before the Committee. That very important canard about nuclear power needs to be laid to rest, and I am grateful for that helpful intervention.

We described three issues in relation to nuclear power as broadly ethical and requiring political judgment, which a simple appeal to science cannot definitively resolve. First, should we be creating new nuclear waste that future generations will have to care for? Secondly, does a pro-nuclear policy undermine the Government's attempts to stop nuclear proliferation such as in the case of Iran? Thirdly, should the United Kingdom be showing leadership in the fight to reduce carbon emissions at any cost when, at global level, our contribution can be at best marginal? Hon. Members will have different views on such issues. It is arguable that the original energy review failed to address them in sufficient depth.

We know, for example, that new nuclear build will add only about 10 per cent. to the existing volume of nuclear waste. The other 90 per cent. is there and has to be dealt with already, although there is debate about the level of the radioactive waste and whether it makes it more expensive to deal with. The industry says that it does not, while others have a different view. The Committee felt that a decision against nuclear power would also be unlikely to prevent the wider proliferation of nuclear technology, so long as other developed countries continue to pursue a pro-nuclear stance and the United Kingdom remains a nuclear military power, which, since the report, the House has voted that it should. The House must reach a decision on the carbon issue and to what extent we need to set an example to the wider world.

Another issue often raised is the security of nuclear installations. Modern nuclear reactors are designed to stringent standards, primarily to protect them from acts of God, such as earthquakes, tsunamis and tornadoes. Whatever happens to climate change, the clemency of the British weather militates against the need to protect against those particular risks. However, it worth noting that the third generation reactors that would form part of a renewal programme in the United Kingdom do not have specific anti-terrorism measures——something that they should have. The evidence that the Committee received suggested that existing measures such as concrete shields and automatic shutdown mechanisms were sufficient to prevent radioactive discharge as a result of any foreseeable terrorist attack. The Committee believes that such an issue should not concern the House.

Tobias Ellwood (Whip, Whips; Bournemouth East, Conservative)

I commend my hon. Friend on his leadership of the Committee and on its report. Has the Committee considered how long it would take to build a new batch of nuclear power stations? I understand that nuclear fusion would be workable in my lifetime——and, I hope, in that of my hon. Friend. The report did not cover that, but it is significant because it is important for the public to know that we will really need to build only one generation of nuclear power stations. Beyond that, I hope that nuclear fusion would have been developed to the stage when it can replace nuclear fission.

Peter Luff (Mid Worcestershire, Conservative)

I am most grateful to my hon. Friend for his intervention. Although not the subject of the debate, a different report on the work of the Nuclear Decommissioning Authority and the United Kingdom Atomic Energy Authority deals with nuclear fusion. The Committee is enthusiastic about the prospects for nuclear fusion, but like so many things, it remains about 15 years away. The evidence is that we are getting closer to plausible, commercially realisable nuclear fusion, and we are encouraging the Government to continue to support our international efforts, which are moving from Culham to the ITER——international thermonuclear experimental reactor——facility in the South of France.

I agree with my hon. Friend that there are other technologies, such as locally distributed energy generation, which may in 30 or 40 years' time produce alternative sources of power. As new technologies come along, we may find that this is the last time that we need to renew the old fashioned large-scale power plants. I entirely agree with what he said.

On security, the Office for Civil Nuclear Security expressed some concern about its ability to provide clearances for the likely influx of workers from other jurisdictions arising from a new build programme. We also heard about the traditional concerns—the transport by train of nuclear fuels and waste around the country. However, we were reassured on those points. Overall, the Committee felt that the security issue came down to the extent to which future nuclear power stations presented an additional risk over and above that which already exists in current nuclear installations. We did not believe that the risk would be significant.

Turning to the positive things, there are four key principles for nuclear policy. In our inquiry, we received evidence from many different groups. Four issues above all stood out. There was consensus on the primacy of those issues across the waterfront, from electricity generators, regulators, academics and non-governmental organisations. I will go through them one by one.

The first, if we are to renew the nuclear power stations, is the need for a broad national consensus on the role of nuclear power that has both cross-party political support and wider public backing. The energy review's conclusion in favour of nuclear power was widely foreseen following the Prime Minister's speech to the CBI in May 2006 in which he said that increasing dependence on gas imports

"put the replacement of nuclear power stations, a big push on renewables and a step-change on energy efficiency, engaging both business and consumers, back on the agenda with a vengeance."

That helped foster a high degree of cynicism about the energy review itself. Sir Jonathon Porritt told the Committee that

"the way in which the Government is handling the process around the Energy Review is not clever. It is allowing an awful lot of people to assume...this is, indeed, an exercise in rubber-stamping".

The Committee also concluded that the decision-making process was taking place too rapidly, before adequate consideration of the available evidence. That view was upheld in court earlier this year, following a case brought by Greenpeace, in which the judge concluded that the consultation process had been "misleading", "seriously flawed" and "procedurally unfair".

In response, the Prime Minister said that it would not affect the policy at all. However, the Government have rightly committed themselves to holding another consultation on nuclear energy, which has delayed the energy White Paper to May.

Overall, evidence to date suggests that there has been little opportunity for politicians to move towards a consensus on new nuclear build. I hope that that is something that today's debate will go a little way towards rectifying. It has also undermined the Government's ability to get the public to buy in to nuclear policy. I understand that a new nuclear consultation document will be published at the same time as the energy White Paper in May, and that timing may be enforced. However, that seems strange in view of the judge's criticism. The risk is that the White Paper could be seen to be pre-empted—or not to be pre-empted—by the consultation document. If the White Paper has green edges—in the consultative rather than the environmental sense—that means that important decisions on the future of energy policy risk being further delayed. That concerns me and I think that it would concern members of the Committee.

A carbon-pricing framework that provides long-term incentives for investment in all low-carbon technologies is very important. We took a lot of evidence on the different costs of nuclear power and how that related to other sources of electricity. We concluded that the Government should make it clear that all the costs of building, operating and decommissioning new nuclear power stations should fall to the private sector investors who build those stations. In other words, the costs are a concern for investors, not the Government or the taxpayer.

A policy framework that provided a level playing field, rewarding all low-carbon technologies, was seen as the only way in which the Government could cost-effectively tackle carbon emissions from the electricity sector. However, because of the long lead times for nuclear, and the period over which investors would seek returns, that framework would need to provide 15 to 20 years of certainty over a reasonably stable and foreseeable price for carbon if the private sector were to invest. Current carbon pricing arrangements, such as the climate change levy and particularly the EU emissions trading scheme, do not provide a sufficiently long-term stable carbon price.

The energy review rightly commits the Government to continuing with the EU ETS as the main means of pricing carbon, but in my view that is not an adequate approach. Phase 2 will take us to 2012 and there will be no clear progress on phase 3 of the scheme until perhaps 2010. However, significant progress must be made urgently if the Government's objective of advancing nuclear power is to be achieved and the energy gap we all fear in the next decade closed.

When we visited the European Commission in February, we were impressed by its commitment to making the EU ETS a success, but interested to learn of the scale of opposition among many member states to the very tentative steps in phase 1. It seems that the Commission has no option but to proceed in fairly short time frames until all member states are convinced of the need for a robust and enduring emissions trading scheme. Is the Minister convinced that the Commission is being strict enough in its review of allocations? Is it generally approaching the scheme in the right way? Are the other member states willing to abide by its decisions or is there a risk that, in practice, they will try to undermine them? What does he make of potential nuclear investors' concerns that we cannot wait for a third phase of the EU scheme? Investment decisions are needed now, and that means a UK initiative now, over and above the EU ETS arrangements.

The third point is the need for a long-term storage solution for the UK's existing radioactive waste legacy, never mind that created by a new generation of reactors. The Government rightly expect the private sector to meet the costs of decommissioning and waste management for any new build. However, nothing is yet in place to dispose of the existing nuclear waste legacy, and the record of successive Governments in that respect has been abysmal. Without a solution, or at least the prospect of one, everyone will be in a difficult position. The Government could find, if they seek to introduce new build too quickly and underestimate the cost of nuclear waste disposal, that they might have to cover some of the cost of future disposal themselves if it proves higher than the industry expects as a result of Government indications.

That is not what the industry wants, but the lack of progress is making it all difficult. The Committee on Radioactive Waste Management, or CoRWM, concluded last year that deep geological repository was the best means of providing a long-term solution to the UK's waste legacy. That was no surprise. We all knew that that was what CoRWM was going to conclude. It is not rocket science—an appropriate phrase, as one of the options was to fire nuclear waste into space. CoRWM concluded that site selection would need to involve a high level of local engagement. Again, I think that it is right. That is the experience in Scandinavia too. Nirex's estimate is that it could cost about £10 billion.

The Government published a response to CoRWM accepting its broad thrust, but we have not heard a great deal about what has happened since then. That is worrying. The principle of local community "volunteerism" is likely to mean that it will take longer to arrive at specific solutions than would have been the case with simple Government direction.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

There is no doubt that the waste legacy is the elephant in the room of nuclear policy. The Government did the right thing in agreeing with the CoRWM recommendations. Since then, the borough council in the area that I represent has entered without prejudice into discussions with the Government about exactly what the CoRWM recommendations mean and might mean. I encourage hon. Members not to read anything more into that, but it is a fact that 70 per cent. of the nation's higher activity waste resides in my constituency, as does all its low-level waste. We are getting there. The policy framework is now in place and most hon. Members accept that the debate has moved on significantly since the report was published.

Peter Luff (Mid Worcestershire, Conservative)

I am encouraged to hear that. It is not what I was able to determine during my researches for this debate, but it is encouraging. Perhaps the Minister could say some encouraging words in his response. I am glad to hear it, because the waste in the hon. Gentleman's constituency needs to be dealt with, irrespective of any decisions on new nuclear build. I sincerely hope that his optimism is well placed.

We need clear, transparent funding arrangements for waste disposal. For example, will the Government charge marginal or average costs to the operators of new nuclear power stations for the disposal of their waste in a facility that the Government will have to construct anyhow? There are important questions not just about the practicalities but about the funding of disposal.

The fourth principal point is the need for a review of the planning and licensing systems to reduce the lead time for construction. Those issues are not unique to nuclear power, at least as far as planning is concerned. However, nuclear power stations require a number of specific consents and approvals, for site licences and for planning consent. Under existing regulations, an optimistic projection for the time taken to gain all the necessary consents is around five years, and potential developers believe that that is too long.

Proposals to shorten the regulatory process focus on pre-licensing and planning. Developers want the pre-licensing of generic reactor technologies to address design and siting issues right at the start, and to reduce the time required to license subsequent reactors. On planning, the industry wants the Government to set a road map for the process, restricting the ability of public inquiries to question the original policy and requiring them instead to focus on local issues. I know that the Government are moving in that direction. On publication of the energy review, the Government will produce a response to the consultation on the kind of reforms to the planning regime proposed by the industry. I hope that that will be available in May.

Reform in this area is essential if we are to fast-track new build, but there are risks. Pre-licensing does not guarantee a faster outcome—a form of pre-licensing was used for Sizewell B, for example. Most of the reactor technologies are untested. A process that is perceived to be cutting corners will not engender public confidence, which is crucial to new nuclear build. Curtailing the planning process would work against encouraging public buy-in to new nuclear build.

There have been newspaper reports of some electricity generators putting pressure on the Government to start the type approval of reactors even before the White Paper is published, to save time. I wonder whether those reports are true. Has the nuclear installations inspectorate started work on pre-licensing generic reactor designs? What attitude are British Energy and the Nuclear Decommissioning Authority taking to the use of the sites of their current plants for new facilities?

I have spoken already for roughly the time that I had hoped to speak for, but I want to say a few more things, briefly. I will therefore rush through a few other issues.

There are big issues concerning where to site nuclear power stations. Most of the existing sites—where it is assumed that new power stations will go—are coastal. Rising sea levels resulting from climate change and endomorphic tilt will make some of them unviable in the coming decades. Most of those sites are owned by British Energy and the NDA. How will other developers gain access to them? What impact will the decommissioning work on older power stations have on the availability of adjacent land for new power stations?

On reactor technology, traditionally, we have seen two frontrunners in the UK: the Westinghouse AP1000, and Areva NP's European pressurised water reactor, which is being built in Finland and is due to open in 2009. However, that is the only example in the world of either of those technologies being put to commercial use, so any new build in the UK will be using largely untested technology. That poses risks for the pre-licensing process. However, Atomic Energy of Canada Ltd is making a strong case for its advanced CANDU reactor to be licensed for use in the UK, and its experience and track record make it a strong candidate for being added to the list.

There are also questions about the supply chain.

Michael Connarty (Linlithgow and East Falkirk, Labour)

Two things confuse me about this. First, on whether AP1000 has been built, I understand that a series already ordered by China is in the process of being built, as is the reactor from Areva. By the time the UK comes to order such technology, it will have been tried and tested elsewhere. The worry would be if the UK tried to engineer the technology to a higher specification and got it wrong.

Secondly, on the Canadian CANDU reactor, I understand that the proposal is to initiate the new build of another technology beyond that used at present. I believe that there is an order from somewhere within Canada. It looks as though all three will be competing here with technology that will be new but which will have been built elsewhere and tried and tested.

Peter Luff (Mid Worcestershire, Conservative)

Atomic Energy of Canada Ltd has extensive experience of reactor technology, and many of its reactors are working around the world using similar technologies. I agree that all those technologies have important new elements and I think that we need to put Atomic Energy of Canada Ltd into the frame as a potential supplier, in addition to the two technologies that are currently being talked about.

David Drew (Stroud, Labour)

The hon. Gentleman did not mention the role of Westinghouse. Some of us are still spitting feathers over what I, for one, felt was a hurried decision to dispose of Westinghouse, the British answer to new reactor design. There was no debate; we certainly had no debate in this place. Did he look at the implications of that, given that it came at roughly the same time as he was doing his investigation, or at some of the implications of not having our own answer?

Peter Luff (Mid Worcestershire, Conservative)

To my immediate recollection, we did not receive any evidence on that subject during our inquiry and therefore did not consider it, but I have considerable sympathy for the hon. Gentleman's concerns. I am sure that the Minister has heard them and will wish to respond to them in his reply.

I will not talk at length about the supply chain, in which there are concerns about constraints on certain key components, such as large forgings of the sort needed in reactors, but I will talk briefly about skills and uranium supplies.

Tobias Ellwood (Whip, Whips; Bournemouth East, Conservative)

My hon. Friend has been very generous in allowing people to contribute while he delivers his main speech. The report suggests that two main nuclear reactor designs seem to have grasped the attention of the Committee. I am pleased that the Chairman has gone further than that in saying that they are not only looking at the AP1000 and the EPR Areva models, but the CANDU model, which some of us visited around a year and a half ago. It was impressive in that that reactor can now be built in four years. Has he considered what is happening in South Africa with pebble bed reactors, which do not require to be built by the sea, because they are not cooled by sea water? They are far smaller and normally built in blocks of four. They can be placed anywhere and are ideal for places such as South Africa, but could have a role to play in the United Kingdom.

Peter Luff (Mid Worcestershire, Conservative)

I am indeed aware of that technology. Once again, sadly, to the best of my recollection, the Committee received no evidence on that. Committees are driven by the evidence that they receive rather than what they may intuitively know or think. Such reactors are attractive in many ways, because, apart from anything else, it is easy to connect smaller power stations to the grid than the bigger stations with higher outputs that we are talking about in relation to these other technologies. Such reactors have considerable advantages and I would like to know more about that technology.

On skills, the nuclear work force are ageing and many will be used to cope with decommissioning issues. However, it seems that more graduates are being drawn to the sector, so I think that we can be more optimistic.

I mentioned uranium supplies. We would be entirely dependent on imported uranium; we will not have any domestic sources of fuel for economic and other reasons. The Committee was optimistic that the increased market price of uranium would lead to increased exploration and an adequate supply.

On grid capacity, the UK has a centralised grid. It is the view of the Committee that, irrespective of what new technologies fill the generating gap, we need to renew the grid. That is also subject to the planning constraints that affect nuclear build. However, grid renewal is an important issue irrespective of whether we build new nuclear power stations.

I have spoken for longer than I intended, for which I apologise. In conclusion, there are two questions that we did not ask in this report, but on which political judgment is needed before a decision is made to proceed with any new nuclear reactors. First, do we need to replace large-scale generating capacity with other large-scale generating capacity, or can energy efficiency and local energy close the gap? Secondly, if we do need to replace the coal and nuclear power stations that will be closing in the relatively near future, do we need nuclear energy to play a part in that replacement programme?

My personal conclusions are based squarely on my understanding of declared Government policy—which I support—that no special favours or subsidies should be given to nuclear new build; it will be left entirely to the market. I agree with that approach, as do potential declared investors in new nuclear capacity. My view is simple, and here it is based upon another unanimous Committee report into local energy. The report concluded that we need new large-scale generating capacity. Energy efficiency and local energy cannot keep the lights on.

I believe that diversity in energy supply is good. Clean coal, gas, renewables, nuclear, local energy and, crucially, energy efficiency, all have their part to play. However—rightly—all the Government intend to do is to create the conditions to make sure that the technologies can compete fairly and then leave the market to decide—within the targets set by the European Union for renewable energy, of course.

Happily, most of the issues that will determine the viability of new nuclear build need to be addressed anyhow, and urgently, for the wider energy sector. They range from gas storage to grid renewal and wind farm developments. Two key matters that must be resolved are the planning regime and the price of carbon. Some issues, especially waste disposal and licensing, also need urgent decisions and are specific to the nuclear industry. However, waste disposal issues must be resolved to deal with the large historic legacy of nuclear waste in the constituency of the hon. Gentleman Mr. Reed.

I have concluded that it is likely that some new nuclear capacity will be built if the Government choose the correct technology-neutral policy framework. However, there is still a big "but": how much capacity will be built? The Prime Minister has hinted that he wants to replace current nuclear capacity, but his Government have no means of delivering that objective. They can only facilitate it, sit back and see what happens.

Given the substantial fall in wholesale gas prices and the increasing interest in carbon capture and storage, is the electricity generating industry showing the same interest in new nuclear build as it did a year ago, when gas prices were high and carbon capture looked further off? Is there any sign that City interest in financing such expensive, long payback projects is waning? In other words, will new stations actually be built, even if, in their second consultation, the Government finally conclude that replacing nuclear power stations is desirable?

The cost of capital is the largest component of the cost of nuclear power, and the one thing that puts up the cost of capital is political uncertainty. Companies such as EDF are very interested in building new nuclear power stations in the UK, but the issues that we are debating will have to be settled—and fairly quickly—if that new build is to happen.

As I said on the Floor of the House yesterday, the nuclear industry has an obsessively secret past. What we now need—to be fair, we are getting it—is the maximum possible openness. I am clear that, in such an open environment, the public can be shown that we have nothing to fear from new nuclear power, but I am far from clear that we will actually see substantial new nuclear build.

Several hon. Members:

rose—

Frank Cook (Stockton North, Labour)

I am waiting for Members to catch my eye, and I have here a number of letters from those who wish to do so, but it appears that some would prefer to stay in their seat.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

Thank you, Mr. Cook—I was momentarily elsewhere.

I welcome this debate, which is long overdue. The Select Committee's report and the Government response illustrate an impressive and encouraging degree of unanimity on some of the key issues facing the industry and new nuclear build.

I agree with what Peter Luff said about the Minister, who was indeed an excellent Energy Minister. I have had many in-depth conversations with him about the essential need for new nuclear generation and renewable generation in this country.

I shall be brief, but I must declare an interest at the outset—or perhaps I should say 17,000 interests, because that is the number of jobs that the industry sustains in west Cumbria. It is a matter of fact that I, like many other Members here today, am an enthusiastic advocate of the industry. Indeed, there are currently five or six freedom of information requests against me about my links with the industry.

David Drew (Stroud, Labour)

Ours as well.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

Well, there we go. I think that my interests have been declared and are well and truly understood.

The report discusses nuclear skills, and the Government have done an awful lot on the issue in the past 18 months or so. The headquarters of the national nuclear skills academy will shortly be based in the constituency of my hon. Friend Tony Cunningham, and that £30 million-plus project will be fundamental to this country's nuclear skills portfolio and ability to fulfil its nuclear ambitions, as I believe that it must and eventually will.

The hon. Member for Mid-Worcestershire also mentioned uranium prices—for time reasons, he did so only fleetingly—which have increased by 70 per cent. over the past 12 months. The reprocessing of spent nuclear fuel is therefore a live reality—I would, of course, say that, being a former Sellafield employee and having Sellafield in my constituency. This country is good at reprocessing and should continue doing it. There is an undeniable market need for reprocessing internationally, and it is matter of fact that China, Japan and other countries are looking to the British industry to fulfil their huge market requirements.

There are four key issues in the report, which the Chairman of the Committee mentioned. Paragraph 5 of the report states:

"A policy designed to enable the construction of new nuclear power stations would be credible only if it was based on four key elements:"

The first of those—I do not want to play party politics with an issue of this importance, but it is a relevant issue—is:

"A broad national consensus on the role of nuclear power, that has both cross-party political support and wider public backing".

How can that be so—how can it be a qualifying factor in a nuclear policy—given that the Liberal Democrats are opposed to nuclear energy and the current net effect of the Opposition's policy would be no nuclear at all? Nuclear as a last resort means no nuclear ever. If we do not take the decisions now for the nuclear industry, our skills base will wither. That was exactly the argument used by Opposition Members in the Trident debate: if we did not take the decision, the skills would be lost, and we should have to outsource our manufacturing requirements and seek the products overseas. The same is true for the nuclear industry. The Conservative party's policy has to change.

Michael Connarty (Linlithgow and East Falkirk, Labour)

My hon. Friend may know that I completely disagree with him if he is one of those who voted to renew weapons of mass destruction. On the question of the skills base and legacy and the policies of other parties, I am secretary of the all-party group on nuclear energy and have been studying the problem of energy, after many years of being opposed to nuclear energy. My hon. Friend will know that an election is now going on in Scotland. Liberal party policy is that no more energy should be produced in Scotland other than by renewable means. Yet nuclear now supplies 38.5 per cent. of the base load electricity for Scotland. The Scottish National party would appear completely to have disregarded the report, though its leader is a Member of this House. What chance does my hon. Friend think there is of consensus when people stand for election to a devolved Assembly entirely on the basis that whatever happens to the lights—which, I am told, would be switched off in Scotland within 10 to 15 years without nuclear energy—as they are opposed on an ideological but not logical basis to renewable nuclear energy?

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

My hon. Friend touches on an incredibly important point. First, good luck with keeping the lights on in Scotland, if our party should lose control there after the elections. The issue is real and pressing. How do we achieve consensus? I do not know. For too long the nuclear debate and the need for new nuclear has been characterised by wilful misinformation from certain ideologues and people who want an end to the industry per se, irresponsible and destructive as that would be. My hon. Friend's point supports the one that I want to make. Is the criterion in the report a satisfactory or credible one on which the Government should proceed with a new nuclear policy, given the difficulty in establishing such a consensus? I do not think so.

Secondly, the report specifies:

"A carbon-pricing framework that provides long-term incentives for investment in all low carbon technologies".

Peter Luff (Mid Worcestershire, Conservative)

The point about consensus is not a theoretical political point, but a practical, economic one. Without the confidence in the industry that decisions that it is asked to take in the next couple of years will be supported for the next 30 or 40, it will not be able to make the investments. That is a hugely important point, which transcends party politics, and I hope that leaders of all parties, including the SNP, will take it fully on board.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

I agree with the hon. Gentleman's point. In a way I think that he supports my point. We need to give the market the comfort and security to invest. That is why, with regret, I made the point that I did about his party's official policy. I do not think, if I may embarrass him, that it in any way reflects his view.

Peter Luff (Mid Worcestershire, Conservative)

In fact, my view is that my party's policy, because it is more robust on carbon pricing than the Government's current position, is more likely to deliver nuclear power than the Government's currently declared policy. However, I suspect that the Government will move.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

I sincerely hope that the Conservative party will move on that, so that we can give the industry comfort that energy policy is above the vagaries of party politics and it can have the confidence to move forward. I would appreciate being able to sit down with the hon. Gentleman in future to discuss those issues. A cross-party approach is absolutely necessary. We should jettison the vanities of party politics on issues of this importance.

The third element is:

"A long-term storage solution in place for the UK's existing radioactive waste legacy".

Key progress is being made. The CoRWM recommendations will be of pivotal importance in years to come. Finally, I absolutely and wholeheartedly agree on the fourth element:

"A review of the planning and licensing system to reduce the lead time for construction."

However, the report does not touch on a number of issues, and I should like to go into them now, if that is permitted within this debate. I seek your guidance, Mr. Cook. They are entirely germane to the subject.

Frank Cook (Stockton North, Labour)

If the hon. Gentleman is seeking guidance, my advice is that as long as the new material is relevant, that is most acceptable.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

Thank you, Mr. Cook. I think that you will find that it is.

Frank Cook (Stockton North, Labour)

I will soon let you know if it is not.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

I have no doubt about that whatsoever.

Security of supply is touched on in some detail by the report. That is probably foremost among the political considerations that energy policy must address. Recent events in eastern Europe have illustrated the dangers of over-reliance on foreign fuel supplies. Somebody quipped to me recently that the father of the new British nuclear industry must surely be President Putin. I make no comment other than that. Unless a nation can control its energy supply, it cannot sufficiently control its economy. The effects of that can be profound across a broad range of policy areas that I shall outline, such as taxation and public service expenditure.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I ask the hon. Gentleman to reflect on the point made by the Chairman of the Select Committee that, because Britain has no domestic uranium supply, it has to import all its fuel for nuclear power, whereas for renewables, for example, all that fuel is inside our country all the time.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

I am grateful for that intervention. In my constituency there are probably more than 100 tonnes of uranium, which may be readily used as fuel for nuclear reactors, and which would last for years. In addition, we have at least 80 tonnes of plutonium. If we were to mix that with oxide fuel, that would increase the longevity of that resource even further.

Peter Luff (Mid Worcestershire, Conservative)

May I invite the hon. Gentleman, bearing in mind some of the scepticism that I expressed towards the end of my remarks, to comment on the political stability of countries such as Canada and Australia?

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

I am not sure that I understand the hon. Gentleman's point. It is clear that countries such as Canada and Australia, in which major uranium mines are situated, are perfectly stable, and relations between those countries and the UK remain excellent. Uranium mining is a red herring for the UK. We have the resources here—in my constituency, as I said. I understand that there is a need for the Committee to investigate the matter; it is right that it should do so. Questions surround uranium supply. However, reprocessing would offer a solution.

Nuclear has a key role to play in ensuring that the UK enjoys reliable, secure energy supplies. Secure energy supplies enable a country to enjoy economic security and prosperity. The British nuclear industry possesses the capability to generate nuclear electricity, to recycle used nuclear fuel and to produce new nuclear fuel. The mining of new uranium is neither essential nor necessary. The already strong case for nuclear will intensify as the UK becomes more reliant on imported fossil fuels.

I think that everybody in this House would accept that climate change is the greatest single threat facing our planet. The challenge posed by that threat has so far drawn a mixed response from Governments around the world, notably that of the US, but there is now international consensus on the existence of climate change and on the environmental effects of the CO2 emissions produced in the burning of fossil fuels. The generation of electricity from nuclear power plants does not produce carbon dioxide. Nuclear is the only proven large-scale generating technology available that can provide clean generation in high volume; renewables cannot yet and may never do so.

The Government aspire to produce 20 per cent. of the UK's energy needs from renewable resources by 2020. In the event that renewables achieve that goal, the net environmental effects without complementary nuclear generation, which currently produces approximately 20 per cent. of the nation's energy, will be nil. What would be the point of that? Any energy policy that addresses climate change as its central purpose, as the energy policy of the UK must and should do, requires significant nuclear and renewable generation. Too often a false dichotomy of nuclear versus renewables is presented by people involved in these issues. That is unhelpful as such a polarity is false. Fundamentalist opinions of the pro and anti-nuclear camps should be immediately jettisoned and we should pursue a compromise and a solution.

Evidence already illustrates that, as stations have been decommissioned and have gone off-line, the reduction in the capacity for nuclear power generation over recent years has led to an increase in Britain's CO2 emissions. More coal and gas has been used to fire power stations and to fill the gap left by diminishing nuclear generation—that is a fact. Given the current and necessary decommissioning programme for Britain's aging fleet, it is no surprise that current energy policy will probably be unable to deliver the Government's commitment to reducing the UK's CO2 emissions by 20 per cent. by 2020.

The effects of climate change will be widespread and will reach developing countries more quickly than the developed world. We know that climate change will become a major driving force behind international instability. Consequently, energy policy, which should have nuclear energy at its heart, will have wide-ranging ramifications for UK foreign policy. That issue should have been addressed by the Committee. Not only the policy obstacles to the new nuclear generation that is happening in this country at the moment, but the policy objectives of new nuclear generation should have been examined.

The efforts to address climate change and to ensure the security of energy supplies are a growing purpose of the UK's foreign policy objectives. In March last year the Foreign and Commonwealth Office published its White Paper, "Active Diplomacy for a Changing World", which lists a number of strategic international priorities for the UK. One of those is supporting the UK economy and businesses through an open and expanding global economy, science and innovation and secure energy supplies. I cannot find any reference to that in the report, but please correct me if I am wrong.

In the same way that an over-reliance on foreign fuels would jeopardise our ability to run our own economy, it would also severely compromise our ability to pursue foreign and international development policies, which are in the national and increasingly international interest. Energy policy with nuclear at its heart has a key role to play in enabling that.

Peter Luff (Mid Worcestershire, Conservative)

I am sure that the hon. Gentleman's comments are absolutely germane, although another Chair may not rule so. However, the Committee faced the problem that all energy policies are interconnected to many other matters in some way and we had to cut the issue down to bite-sized chunks to deal with it. I personally have enormous sympathy with what he is saying, but there was just not time for the Committee to consider the whole issue of energy reprocessing. That is the simple reason why the issues that he mentioned were not addressed; it was just a matter of time.

Frank Cook (Stockton North, Labour)

Order. I will explain to hon. Members why I have adopted such an attitude to this debate. The title of the report is "New nuclear? Examining the issues" and if hon. Members choose to identify an aspect of the report that has been omitted, they have the right to do so. That is the basis of my logic and I hope that no one will challenge it.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

Thank you, Mr. Cook. I am grateful for your guidance. In the interests of other hon. Members who wish to make a contribution I will expedite my remarks.

It is clear that there is a need for nuclear generation as part of a balanced energy policy. In addition, whether we are in the Kyoto protocol or future international treaties with countries including India, China and the US, carbon trading mechanisms will rely on non-CO2 generating sources to offset intensive CO2 generating sources for any system to work. The use of high-volume, non-CO2 emission energy producers must be maximised, as the chance of such schemes being effective without significant nuclear generation is exceptionally low.

Moving on to the more germane issue of radioactive waste, there are no technical or scientific obstacles to the safe disposal of radioactive waste in the UK. To suggest otherwise is simply not true. Scientific research in that body of work is both robust and mature. The decommissioning of UK civil and military nuclear facilities, in addition to existing waste situated around the country, requires a final disposal route, irrespective of whether or not a new generation of nuclear stations is built in the UK. That policy issue requires resolution and, as I said, the Government have made significant progress.

It is misleading to cite the current lack of a final disposal route as a reason for not progressing with a new generation of nuclear power stations. Such arguments lack credibility and do not withstand any serious analysis. New reactor designs, as the hon. Member for Mid-Worcestershire mentioned, produce far less radioactive waste over their lifetimes than current reactor designs. A new fleet of nuclear power stations would, over its operating lifetime, only fractionally increase the already existing inventory of waste. CoRWM has made its recommendations, which Government have accepted.

Many groups and non-governmental organisations seize upon the opportunity presented by a policy investigation such as this to distort the facts of the industry. I am pleased to say that that is not at all present in the report. I thank the Committee for the in-depth and robust way in which it has addressed the issues. In assessing the component parts of a balanced energy policy, which enables the UK to retain a strong economy, secure and reliable energy supplies, an effective and progressive foreign policy and, above all else, the ability to play our role in a global fight against climate change, nuclear power must be used. The Government are doing and have done the right thing, and must move with some urgency on the issue.

The need for an energy policy that enables the UK to fulfil its ambitions in all those areas is absolutely undeniable. Such a policy must include renewable generation—I think that there will be unanimity in the House about that—in addition to coal and gas-powered generation, but we will inescapably need new nuclear. I understand the purpose of the report. I understand the issues that it homes in on as being problematic, but I believe that the Government have comprehensively and demonstrably shown that they have the solutions to those barriers.

Quentin Davies (Grantham and Stamford, Conservative)

I want to congratulate my hon. Friend Peter Luff, the Chairman of the Select Committee, on an excellent report and on achieving consensus in his Committee on what is always a controversial and emotive subject. He made a speech today that shows that he is a real master of the subject. So there is not very much that I want or need to add. I only want to make two points.

On my first point, I may be nuancing myself slightly from the position of my hon. Friend. He rightly said—here I agree with both him and the Government—that there is no need for, and it would be undesirable to have to resort to, some special form of subsidy in order to build new nuclear power stations. As my hon. Friend said, it is not the view of the industry that that is at all necessary. However, that does not mean that we should simply sit back and wait and see what the market delivers. It is important for the state—Government and Parliament—to be a little more decisive and to be prepared to take a number of strategic decisions about what eventual outcomes the country needs. There are several reasons for this.

The first reason is that there is a co-ordination problem in energy; it is very important for anyone planning one particular increase in capacity—whether through renewables, burning hydrocarbons or nuclear—to know what others are doing. The economics of any one project will be affected by the existence or non-existence of other potential sources of energy. The lead times in this are such that one cannot launch down an investment that may involve 10 years before making any kind of return with the danger that the looked-for cash flows will not be available because of some intervening new investment, which one had not anticipated. A real co-ordination problem can mean market failures. There is a need for state action.

The second reason is that an enormous number of the costs involved in building nuclear generating capacity are imposed by the state. As my hon. Friend said, those costs could be in licensing or the delays—any delay is very costly—in licensing and in the planning process. I think that I am right in saying that Sizewell B's planning inquiry took eight years. We should all be aware of that terrible example and try to avoid similar situations in future.

We must also consider the costs imposed by the state in its role as regulator. We might be talking about the state in the form of the British Government, the nuclear installations inspectorate, the European Commission or the agency in Vienna—whatever it is called—that establishes norms for nuclear safety. Real uncertainties are involved. These costs are controlled by the state and could not possibly be within the control of the private sector. In so far as the state is in the position of determining a large number of costs, it must be in a position to give some assurance on their extent; otherwise, it cannot possibly expect the market to take account of what are uncertainties for the private sector but matters directly and explicitly under the state's control.

The third reason why the state has a natural role to play, which would not normally be the case were one to be building a chocolate factory, a shoe button factory or something of that kind, is that there are enormous externalities in energy. The benefits of building a nuclear power station—this would apply in the case of any power station—are greater than those that are captured in the cash flow available to the company that owns and operates the station and sells electricity.

Equally, there are negative externalities to consider: the negative costs of an economy running into energy shortages or sudden supply shocks, or of an undue dependence on natural gas being imported from unstable places such as Russia, have an enormous external effect on the economy of a negative kind. In other words, the losses to the economy as a whole are a vast multiple of the losses to the power station or generating company that is dependent on that natural gas.

Those are reasons why we should not adopt a laissez-faire policy; we should not just sit back and say, "We will do lots of studies and so forth, but we cannot control the outcome because it is all left to the market." Given the three factors that I have mentioned, the state must accept the responsibility of establishing a clear, explicit strategy and it must be prepared to take such measures as are necessary to ensure that it can be achieved.

Michael Connarty (Linlithgow and East Falkirk, Labour)

I thank the hon. Gentleman warmly for giving way. As a long-term Labour Member, I am naturally attracted to the idea that the state must take responsibility and must therefore think about the fair use of the public wealth for the public good should situations such as those that he has explained not be factored into any private decision. I have spent the past couple of years going round industry and I did not find any private producer or distributor of energy who would wish to use nuclear approaching the Government. There has been a sea change in the way that the private sector is approaching this matter. Am I missing something? I should be happy to hear of pleas of mitigation from the industry that I could advance.

Quentin Davies (Grantham and Stamford, Conservative)

The hon. Gentleman, for whom I have great regard, may possibly be missing something. I think that his attention might have been momentarily distracted when I said that I did not believe that in this case it would be either desirable or necessary to go in for any subsidies to enable investment to take place in new nuclear generating capacity. What I did say was necessary was a clear regulatory framework that is not subject to subsequent change and a co-ordination role on the part of the Government. They should take responsibility for a general strategy to which they would be committed and within which the private sector would be able to make long-term investment decisions with less uncertainty and, therefore, with a lower capital cost, as my hon. Friend the Member for Mid-Worcestershire rightly reminded the Chamber.

There are good reasons why, in this case, the state should take a role—this is standard classic economic theory, and I have not said anything at all revolutionary. Should it not do so, there would be market failures and we would all suffer as a country. That is my point about abut externalities. Laissez-faire is not appropriate. People like myself, and even Michael Connarty and most of the Labour party these days, believe in markets, capitalism and so forth, so we have common ground on this matter. I remind colleagues from both parties that there are good, sound, classic grounds in economic theory for accepting a greater role for the state in this case. It is similar, Mr. Speaker—

Peter Luff (Mid Worcestershire, Conservative)

Mr. Cook.

Quentin Davies (Grantham and Stamford, Conservative)

I mean Mr. Cook. I never know whether I am supposed to say, "Mr. Speaker", "Mr. Cook" or "Mr. Chairman". I always get it wrong, whichever I say.

There is an analogy with the railroads in the 19th century, when both major parties were totally committed to the idea that the state should not interfere in the economy at all, but realised that because of co-ordination and externalities, which I mentioned earlier—although they would not have used those words in those days—it was necessary for the state to take some action. So they did so. That is why a series of private Bills went through the House, without which we would not have built the railway system. The Americans had to do the same sort of thing in America. On the continent, the state took an even more explicit role in railway building.

I should like to emphasise, as my hon. Friend the Member for Mid-Worcestershire did, the enormous urgency of the matter. I have been looking at the excellent report from my hon. Friend's Committee, which makes it clear that there is still some uncertainty about how far the advanced gas-cooled reactor stations' life can be extended. We still do not know about that. Originally, a lot of such stations—Hinkley and so on—were going to be taken out of commission in 2011 or 2012. We might get a few more years, possibly up to 10 more, but it is quite clear to me that from 2015 or so those AGRs will be retired. The Magnoxes, the total capacity of which does not add up to as much as 2 GW—they are not enormous—are being withdrawn at the present time.

We have to act quickly if we are not to find ourselves in an absolutely appalling, disgraceful situation in which, although we proclaim our commitment to reducing carbon emissions in this country and our desire to have a reasonable balance and mix of dependence and a diversified set of risks in energy policy, we would allow the nuclear contribution to fall dramatically. That would be damaging and dangerous, on the grounds that I have just touched on, and it will happen within 10 years, unless we take action very quickly indeed. I hope that the Government will act even more rapidly than has been anticipated. I would like to see them introduce a Bill in the Queen's Speech in October this year that will bring about the necessary changes in the planning system to ensure that we do not have another disaster like the eight-year-long planning inquiry for Sizewell B, when Sizewell C happens—which I trust it will—or when Sizewell C's successors come along. That is unnecessary.

I do not want to go into the mechanics and modalities that we might use to sort such matters out in future. Perhaps we should resort to private Bills. I remember, early on in my service in this place, sitting all night for a couple of nights on a private Bill on the Felixstowe dock and harbour scheme. [Interruption.] I think that my hon. Friend remembers that, too. We were both new in the House and, although it might be a traumatic memory, I do not think that I have ever spent 48 hours of my life more usefully. If we had not gone through two nights on that Bill the scheme would not have been built.

Frank Cook (Stockton North, Labour)

Order. I have been very tolerant so far and I am happy to continue to be so, but this contribution is becoming somewhat rambling. We are not talking about Felixstowe harbour; we are talking about nuclear matters and examining the issues. Felixstowe harbour has nothing at all to do with it as far as I am concerned.

Quentin Davies (Grantham and Stamford, Conservative)

Mr. Cook, I recognise that. Felixstowe harbour was merely an example, if I may say so, of a successful way of getting a controversial and very necessary infrastructural project built through the planning system. I was making an analogy. I am sorry to be described as rambling and will try to avoid giving any grounds at all for being accused of that in future.

The Government need to do something urgently about the nuclear installations inspectorate. My hon. Friend the Member for Mid-Worcestershire knows more about what is going on there than I do. I would love to know—perhaps we will hear something from the Government—what the staff of the nuclear installations inspectorate have been doing. Have they just been taking salaries for a number of years and doing nothing at all, have they been working on and evaluating new types of nuclear power station, or have they been doing some third thing? I do not know what they have been doing, but it seems to me that their job involves being in a position at any time to license new types of power station.

Sadly, the inspectorate has not had anything to do for many years. I shall not find it easy to accept that it now has a huge backlog to catch up on, and that it will take many years before it can get its act together and approve a new nuclear power station in this country. The least that it should be able to do is leverage all the work that has been done by equivalent inspectorates in other countries.

The Finnish example is a good one. I do not know exactly what procedures the Finns followed but, knowing Finland to some extent, I am sure that they were extremely thorough. They have good inspectors, and they have done a good piece of work in evaluating their power station, the European pressurised water reactor, which will come on stream in, I believe, 2009, which is fairly soon. As somebody said earlier, there may be experience of the operation of that type of station to draw on before we take irrevocable decisions here—perhaps not very much experience because, as I said, I want to ensure that we start breaking the sod and building the first of the new pressurised water reactors as soon as possible.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

I do not think that the hon. Gentleman was attacking the nuclear installations inspectorate. I certainly did not infer that from his comments. However, if I may leap to its defence, it has an exceptionally difficult and important job in respect of nuclear science in the UK. The point that I would make, which is of direct relevance to the hon. Gentleman's comments, is, yes, pre-licensing and investigation of new reactor technologies has been done in the United States most recently and in Finland as well, but, because the UK regulatory regime is the gold standard internationally, it is important that we do not simply import other regulatory regimes or accept the findings of other regulators. It is important—sadly, I concede that it is probably also very costly—for the NII to undertake its own investigations and fulfil pre-licensing requirements for whichever reactor design we may wish to proceed with in this country. I do not know whether the Minister can confirm this, but I believe that the Health and Safety Executive and the NII have begun a pre-licensing investigation of new nuclear reactor designs.

Quentin Davies (Grantham and Stamford, Conservative)

We cannot have it both ways. Either the nuclear licensing regime in this country is the gold standard, as the hon. Gentleman suggests, in which case our inspectorate is not only up to speed but more up to speed in evaluating new nuclear types than anybody else, or it is not up to speed. It has not had experience recently because we have not built anything since Sizewell B, and therefore it cannot be the gold standard.

Perhaps the gold standard is, in fact, the French licensing regime. If anybody gets a gold medal for successful development of nuclear power stations, it is the French. They have been brilliant: they built a batch of pressurised water reactors, and every few years, on the basis of the experience curve effect, they have improved them slightly and added another batch. There must be extraordinarily good engineers in Areva, EDF and so on.

I do not know whether what the hon. Gentleman said is true. It is very nice to say that the British set the gold standard for everything. We all feel comfortable and happy in this place when we beat our breasts and say that, but it may not be true. I am not having a go at the inspectorate—I am just asking questions. The purpose of these debates is to ask questions of the Government. What has the NII been doing? Is it up to speed? Will it introduce new delays into the system because it is not up to speed? We do not want delays. Has it been evaluating new types of station? If so, I would think—I cannot imagine how it could be done otherwise—that the NII must have been working closely with the French, the Finns, the Americans and so on. I hope to hear that it has been doing that.

I wanted to make only two points, and this is the second one. There is a need to avoid delays, to keep up to speed.

Peter Luff (Mid Worcestershire, Conservative)

It may reassure my hon. Friend to know that the Select Committee took evidence from the nuclear installations inspectorate. We were very impressed by what we heard from it. It seems to be combining the best of prudence in terms of safeguarding British interests with the ability to learn from international experience, and we are optimistic about its ability to deal with these issues.

Quentin Davies (Grantham and Stamford, Conservative)

That is exactly what I wanted to hear. If anybody from the NII should read this debate in Hansard, which, conceivably, they might, I do not want them to think that I am in any way disparaging them. However, I do want them to think that there are people in this House who are asking precisely the questions that I just asked, and who will be alert to the answers.

I hope that I have not trespassed too long on the time allocated. I would like to end by saying, once again, that I totally agree with my hon. Friend. It is extremely important that we have an informed and sensible public debate on this matter and we must reach decisions urgently. For far too long, for political reasons that we all understand, both parties have just been putting off the evil day and saying, "Oh, this is a bit difficult. We will wait until after the election, or until next year. We won't put a Bill in this year. We will take a bit longer about it and have some other Committee, or some commission, or some negotiation, or some consultation." Frankly, we are getting to the point now where we really have to be businesslike and take some decisions that will be vital for the future of this country.

David Drew (Stroud, Labour)

I am delighted to follow Mr. Davies. I am also delighted to have the opportunity to debate a report from the Trade and Industry Committee, which I think is a very balanced and fair report.

I will start with a note of agreement with the previous speaker. I think that we have dilly-dallied for far too long and a degree of urgency is now required. There is no better person to demonstrate that to me than James Lovelock. I do not know how many other hon. Members had the opportunity to hear him, but he spoke in this place about a month ago. If one wanted a clearer explanation of why the nuclear option is inevitable, and also wanted to know how to dismiss some of the absolute rubbish that gets put about by those who call themselves members of the green movement—I believe that I myself am a member of the green movement—but have an obsession with finding reasons why we apparently have alternatives to nuclear energy, James Lovelock utterly dismissed their arguments that day, being someone of outstanding repute who, along with Patrick Moore, has become a great advocate of the nuclear industry. They see it as both inevitable and right that we choose to go along the route of at least replacement.

There is some misunderstanding and I think we need to stress that nobody is asking for a complete change in our energy provision, so that we go over entirely to the use of nuclear power.

Michael Connarty (Linlithgow and East Falkirk, Labour)

I am sorry to interrupt my hon. Friend when he has just got into his stride. However, I must say that there are different views on this subject. In fact, Professor Patrick Moore, speaking at a meeting that I attended, said that he believed that all advanced countries that had the ability to do so should have 60 per cent. of their base electricity generated by nuclear power, if we are serious about dealing with climate change. If I am called to speak later I will elaborate on his remarks, but there is a view that responsible, advanced countries, when they consider the damage done to the planet by carbon and other emissions from fossil fuels and also the inability of renewables to give adequate capacity, should seek 60 per cent. generation, and I agree with that view.

David Drew (Stroud, Labour)

I would never in any way disagree about the precise figures or percentages; that is an issue that I have never been too concerned about. All I believe is that our starting point is replacement. We cannot stand still. After that, we must look at how the different component parts of energy provision best fit together. However, I also make no apology for the fact that I believe strongly that our time for renewables is here and now, and again we are rather slow in the take-up of some of the opportunities that are now coming our way.

Quentin Davies (Grantham and Stamford, Conservative)

Would the hon. Gentleman agree that when we discuss renewables we are really talking about non-base load, because most renewables that we can think of in this country, particularly solar and wind power, obviously only work when the wind is blowing or the sun is shining? So they are distinct from base load. Would it not be more sensible conceptually to examine what we need in terms of base load and what proportion of that might reasonably be generated by nuclear power, what we need in terms of renewables and what we need in terms of very flexible capacity, which can be switched on to replace the renewables when the renewables cannot provide the necessary power?

David Drew (Stroud, Labour)

That is an absolutely pivotal point. We are talking about two interrelated but separate systems. We need both a national system through the grid, which obviously will be partly, if not wholly, supplied by nuclear in the future, and local solutions. They can be very local. They can be microgeneration at the household level. We are talking about two different systems that need to work together. That is what technology will have to allow us to think through. We have not done that yet. That is for the future and let us talk about the here and now.

I will start with the point to which my hon. Friend Mr. Reed alluded: some of us are currently subject to a freedom of information inquiry about our interest in the nuclear industry. Like him, I have various bits of correspondence winging their way through my office at the present time. Considering that the three of us on the Back Benches—my hon. Friend the Member for Copeland, my hon. Friend Michael Connarty and I—have rather an established reputation for supporting the industry, it is somewhat bizarre that anyone should need to find out what our links with the industry are.

If they had the courtesy to write to us, I would tell them clearly that I have been pro-nuclear for at least the last 20 years. I make no apology for that. I do a lot of work with the industry and I am totally transparent about that. Notwithstanding the Bill that is to be debated tomorrow, it is rather a waste of time trying to prove the obvious. But that is by the way. I just say in passing that much of the correspondence relates to a visit by my hon. Friend the Minister to Berkeley that in the end never took place. It is a fascinating study that shows just how obsessed people are in trying to attack through all sorts of means those who have a view on this industry that is sensible and right. But we will not be put off.

I have to introduce a slight note of rancour here. I have disagreements with my hon. Friends and with the hon. Member for Grantham and Stamford. I have always believed that there is a role for the state not just in terms of the strategy. The industry needs greater state involvement. From the word go the state has played a crucial role in the nuclear industry. At one time it was an almost entirely state-run industry. Indeed, it was born out of state involvement. We sometimes forget that. Because of all the changes that the industry has undergone and the fact that it has been split up so many times, many of us who know the industry still find the picture of who is in bed with whom and who they represent extremely confusing.

We still have a fully owned state company in the form of what was BNFL, which reappeared again yesterday even though I thought that it had become BNG. Whatever it is now called, it is still entirely owned by the state. We cannot dismiss that. It is important. One of the problems goes back to the way in which the old Central Electricity Generating Board was divided up, leaving us with the so-called residue in the form of the old BNFL because of the liabilities issue. That was not necessarily done in the right way, but we are where we are. It was never successful because Nuclear Electric then became British Energy; it has hardly had a great financial past. One hopes that it is through the worst and that it comes out the other side.

One of the problems with the industry is that whenever we want to look to the future—there are those of us who advocate that there is a future and strongly support it—we are somewhat overcome by events. There is no better example of that than yesterday. It may be somewhat marginal to the industry and the new nuclear build, but it is a story that has not been helpful. As with previous stories about the falsification of data, it may have been greatly exaggerated, but this always stops the nuclear industry from getting a fair wind and building that consensus which needs to be built.

I see a strong role for the state. It is fascinating that this Sunday a rather important election is taking place. It is in the country next door and it will have a big impact, not least because that country happens to own a lot of our utilities due to the successful operation of what was EDF and is now, I presume, Areva. I have some difficulties knowing which company it is and who is in bed with whom. The hon. Member for Grantham and Stamford will put me right.

Quentin Davies (Grantham and Stamford, Conservative)

I think that the hon. Gentleman will find that EDF remains EDF. EDF is the operating utility that owns the power stations, whereas Areva, which was previously called Framatome, builds them.

David Drew (Stroud, Labour)

I accept that and take the hon. Gentleman's clarification in the best spirit. The point is that there is heavy state involvement in the company; it has built on that and used it to move into other markets, including, in a big way, Britain. I raise the issue now because many great issues are under discussion in France—social policy, economic policy, personalities—but the one issue that never gets discussed is the nuclear issue. I shall give way for the last time, because I am trying to develop an argument.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I am sorry to interrupt the hon. Gentleman. The nuclear issue has been raised by a number of bodies in the run-up to the French election; tens of thousands of people demonstrated against nuclear energy in France only last month.

David Drew (Stroud, Labour)

I take that information as being completely genuine. The reality is that it will not make a blind bit of difference, because whoever is elected as the new President of the French Republic will be avowedly nuclear. They will be nuclear not only for the generation of power; sadly, I think that the force de frappe will remain in place. Like my hon. Friend the Member for Linlithgow and East Falkirk, I voted against the renewal of Trident. I think that the two issues are completely separate. It does immeasurable damage to the argument in favour of nuclear power that it is always linked to nuclear weaponry. I would hope that we could convince other countries that the two issues are separate; perhaps we could do more to lay that ghost to rest.

The French have a much clearer strategy than we do. They are committed to the amount that they can produce with their nuclear component. The nuclear issue is not talked about much in political circles. As David Howarth said, there is some inevitable resentment towards nuclear power, but it is a given. They will continue with that approach, which has allowed them to secure their energy future. France remains the only country in Europe that can say that; the rest of Europe, let alone the wider world, is at least partly dependent on imported supplies, and increasingly so.

I do not want to delay Westminster Hall too long, but I would like to make a couple of other points, one of which is parochial as it relates to Berkeley in my constituency. I shall come to that in a minute. The building of a consensus is largely dependent on convincing people that we have an answer to the waste issue. The report of the Committee on Radioactive Waste Management was interesting; I will say nothing more defamatory than that. It resulted from the issue having been in the long grass for so many years, and although it brought it out of the long grass, it did not give it the full-frontal publicity that it needs. We have to convince people that we have an answer, because it is difficult to believe that we can go for a new build when there is legacy waste to be dealt with.

The issue is controversial; although the constituency of my hon. Friend the Member for Copeland may provide the main answer, those of us who still have legacy waste in our constituencies have to think through the debate about what is stored where, rather than what is moved about. That needs to be explored fully and quickly so that we get some answers, as they will have a huge impact on where a new build might take place. I have always argued—some people will know that I do so to obsession—that any chance of the industry having any credibility will depend on the footprint falling across the country. I am not in favour of coming up with a number for the new nuclear stations that we need, but I have always thought it a terrible mistake to believe that the answer to the nuclear industry is, "Stuff it in Sellafield." Some people may think that that would take the problem away for them, but the problem cannot be escaped from. A number of sites need to be explored properly.

That is a good thing that came out of the CoRWM report. In talking about the waste solution, it alluded to the fact that we need to consider the issue comprehensively. I argue that we need to look at a number of sites where we could situate new nuclear build. We have to be open with people and we have to give them incentives, which is of course the way the French are able to keep local populations sweet.

Let me move on to the local situation. This is where we get into some difficulties. Because the industry has been treading water, certainly for the past five years—some of us argue that it has been doing so for much longer—we have seen yet another major restructuring of the industry. Peter Luff did not make much of the role of the Nuclear Decommissioning Authority. That is important because the NDA owns the sites where the new build is likely to be, although it is not in any way able to deliver anything on the sites. It is merely a holding body that will make decisions about who might be capable of delivering on the sites. It is a nice notion that we have those checks and balances. It has some attraction, although, to return to what the hon. Member for Grantham and Stamford said, it is a reason why there may be more bureaucracy, delay and confusion about who will do what and when.

I still believe that the key role of the NDA is as yet untested and unproven, but at least I would give it a fair wind, which I certainly would not give to Nirex on the waste issue, because I think that there we invented a body, fully owned by the state but entirely funded by the industry, that ended up failing to deal with the waste issue. We have learned some lessons from that, but on the NDA, urgency is needed regarding what it sees as happening to the sites.

The situation at my own local site at Berkeley is interesting. We have not only the decommissioning—I say decommissioning rather than decommissioned because the facility is still in a state of being decommissioned. We have not only the station but the old lab sites next door. During the past six months to a year, we have passed quite an interesting staging post. Until about two years ago there were about 1,500 to 1,800 people on that site. It is now down to a few hundred people, largely very technical people, so we have seen a rapid rundown. The worry about that is that it was supposed to be the future of the industry. Of course, it was not the only future for the industry, and many of the people have gone on early retirement, so it is not as though we have lost them on the scrap heap; they went because of their age profile. There is an age profile with the industry, which needs to be understood. Many of the people who have been in it are coming out of it because they are retiring. Many other people have gone up to Sellafield, where there has been an accretion of people because of the stability of employment there.

That is important because we need to make actual statements about where the future of the industry lies. If it is always seen to be in decline, even if that footprint is partial, it nevertheless is not a good way to relaunch it. The matter to which I am referring is not the responsibility of my hon. Friend the Minister, although he would have come to see the facility, but the skill level is very important and the way in which people have come together to use the skills is even more important. The decline can be rectified. It was pleasing to hear at a meeting that certainly a couple of us went to this week that there is an upsurge of interest in nuclear engineering and that college courses are beginning to fill up. That is promising, but we have lost many good people who cannot easily be replaced and we cannot pretend that that will not damage the industry.

We need the Government to clarify what will happen to the sites, and to put pressure on the NDA to say what it thinks it should be doing—the selling on of the sites and the contracts have not really been covered. It is crucial to be transparent about what is happening if we are to convince the public that we know what we are doing. If we, as the people's representatives, cannot understand what we are doing, it will be difficult to persuade them that things are going well.

On the nuclear installations inspectorate, one of the industry's problems is that it has not one regulator but two; it also has to answer to the Environment Agency. The fact that the Berkeley nuclear lab site has been de-licensed could be good news, because we might go on to use it. However, with two regulators there is always the danger of in-fighting. There has certainly been a question about how independent the regulators are, given that everybody in the industry knows everybody else—people move around within a closed industry. We need to look into that carefully.

In conclusion, we have to convince the public that we are serious; nothing will happen if politicians argue that they need another review, whether it is a review of energy, of waste or of the way in which the industry can be restructured. We have to convince them that now is the time for action if we are serious about global warming and finding a centralised answer to energy provision as well as local solutions. We must be honest and open; people must believe that there is a clear structure.

I should like to hear my hon. Friend the Minister say something about the fact that we have a structure that will stay in place for the foreseeable future. We do not want further change. If the NDA is going to continue in its crucial role, it must be open and it must push on. However, we need to know who is going to launch the new build. I do not think that the state can wash its hands of it; it has a critical role to play. It might not be able to do everything because much of the industry is in the private sector, but in other countries there are all sorts of paper walls between what the state commissions and who does the work on its behalf. It is not true that there is privatised industry in all other parts of the world; nothing is that clear cut.

I hope that my hon. Friend hears what I am saying about urgency, openness and attempting to engage with people who, in the main, are uncertain but not against the industry. Some are obsessed with the belief that the great British public are anti-nuclear. That is not true. Most of them are agnostic, but we have to get those agnostics on board. Other parties might not agree, but I would challenge them to tell us their solution. If renewables cannot fill the gap, what will they do if they do not want to see the lights turned off?

Michael Connarty (Linlithgow and East Falkirk, Labour)

Should I address you as Mr. Deputy Speaker in Westminster Hall, Mr. Cook, or as Mr. Chairman? What is your status?

Frank Cook (Stockton North, Labour)

There must be some difficulty with eyesight in the Chamber today. It is plainly stated here. The term "Deputy Speaker" in Westminster Hall was laid aside by the House some 18 months or two years ago.

Michael Connarty (Linlithgow and East Falkirk, Labour)

That is a pity, Mr. Cook, because I would certainly be happy to accord you that status, knowing the role that you perform.

I said earlier that I had come to the House opposed to nuclear power generation. I have been involved for many years in the oil and gas industry, as secretary of the offshore oil and gas industry group in this House. I was chairman of the chemical industry group and a member of PRASEG—the parliamentary renewable and sustainable energy group. I was challenged to review my position by some people who felt that the climate change and security supply issues were on the horizon—at that time, four or five years ago, they were not quite so prevalent. They were reacting to what seemed to be the Government's abandonment of the future of nuclear with the 2003 energy review, in the same way that the United States abandoned its capacity to build nuclear power, mainly because of some large problems in the industry worldwide when people were not taking climate change seriously.

I set myself some tasks and asked myself five questions, one of which was whether nuclear energy generation was avoidable. If people are interested enough they can find in the publication Nuclear Future, volume 2, No. 5, an article that I wrote following a debate in the Parliamentary Office of Science and Technology Committee, in which I argued strongly that nuclear power was not only necessary but unavoidable if we were serious about saving our planet and contributing to the continued growth of people's energy needs, even with the amelioration offered by energy-saving policies or generation from other renewable sources such as wind, wave and tidal. In Scotland, we have the blessing of hydro power, which some countries do not have.

I was pleased that the Select Committee took up the issue again and I compliment the Chairman on the excellent and thorough report. It is a pity that he was not the guiding hand when the 2003 review was under way, as we might not have been carried away by the siren voices that were being heard loudly then that we should take the route of other countries and abandon a low-carbon fuel which, unlike fossil fuels, does not generate other by-products that are equally damaging to the atmosphere and the future of our planet.

Peter Luff (Mid Worcestershire, Conservative)

I am most grateful for what the hon. Gentleman said about the Committee's report. Since he intervened, I have had the opportunity to check what I thought was the case and can confirm that the figures on the carbon footprint of nuclear technologies in the report of the Parliamentary Office of Science and Technology to which he referred are repeated in our report and prove exactly his point——that nuclear is the least carbon intensive of them all. He also makes the important point that emissions associated with some other technologies do not apply to nuclear.

Michael Connarty (Linlithgow and East Falkirk, Labour)

I say with some pride that I have been a member of the board of the Parliamentary Office of Science and Technology from the days before it was properly budgeted for in this House and had to go begging and borrowing to pay the scientists who did the excellent reports, including the one on nuclear security. I am the member of the board who asked them to do the study they produced. I had no sense of what the conclusion would be. I was seeking knowledge and it did provide the knowledge that, as the hon. Gentleman said, nuclear has the lowest carbon footprint.

As the Chairman of the Committee said earlier, the first question was whether we would need to build new electricity generating capacity, and the second was whether we need to replace nuclear with new nuclear. He came out very clearly and said that, on the basis of analysis, there should be no special favours. However, I noticed on page 59 that the Committee said that, whatever happened, it should be in a framework that rewarded low-carbon technologies. That is as objective as we can possibly be and I hope that from that conclusion, in other studies, wind, wave, photovoltaic and other types of power will also be seen as low carbon and given the incentives that they require.

I know that there is a dichotomy of views. Some believe that if we support nuclear, both Government and commercial money would flow away from renewable energies. I hope that that would not be the case. It is clear from the recent European decision about the energy options for Europe that those technologies are seen as important. There is no doubt that we need to find ways to use less energy and to advance the use of renewable and low carbon energy, from wherever it comes. In that mix, there must be nuclear energy, and the report points that out well. I look forward to hearing the Minister's opinion. I have seen the Government's response, but I want to see whether the Minister has further thoughts. The Government must give strong signals about where they are going.

There is no doubt that the legacy of nuclear power was not good. We have a lot to apologise for in its technological legacy, in this country and possibly in others. The worst incident was of course the Soviet Chernobyl incident, where the technology was entirely inadequate and the procedures and processes used were dangerous and caused major upsets.

For everyone in this country, there is the psychological legacy of the continual loss of technological integrity in the nuclear industry, with leaks into the sea and breakdowns. We have had a couple recently, even at quite modern reactors in Scotland. There are serious questions to be answered. From my experience of 15 years working with people in the oil and gas industries, I know of a parallel when there was a terrible fire at Texas City. It was down to the fact that the board had called for a 25 per cent. reduction in maintenance costs, so people just lengthened the maintenance cycles and eventually something went seriously wrong. My worry is that, with the pressures of finance—the legacy of our financial model is not good either—the pressure was always on people not to do their best. The concept of the gold standard mentioned by my hon. Friend Mr. Reed was not always the one seen by the public.

Even at this moment, as part of the process at Sellafield is turned on, the Norwegians are protesting because they see THORP as a further danger to them. That shows that our legacy has left people with a genuine, serious and respectable view that we must prove the technology all over again in the next generation before we can go forward. It is a shame that Mr. Ellwood, who went across to see the CANDU reactors, is not here. That is British technology that was shipped out during the war years to get it away from the war zone, and it has one of the safest records. The people who developed it were British scientists, sent across to Canada, who stayed there. As usual, we moved on to yet another untried technology and did not bring back the technology that was working perfectly well and has done so ever since at a high level of safety that we would love to have.

There is a Scottish dimension to my concerns. The question is not just whether we will need to have renewable energy as a substitute or low energy use. As a Scottish Member, I know that for some time we have exported electricity to England, because we have had nuclear generation. Luckily, we have also had hydro generation.

The country that boasts the lowest carbon footprint in the developed world is France, which has 80 per cent. of its electricity generated by nuclear and the rest by hydro. If I recall correctly, it creates about 5.8 tonnes of carbon per head of population per annum. The most vociferous country on renewable energy is Denmark, and its carbon footprint is almost 12 tonnes a year per head of population. It does not have hydro, which is geographically unfortunate, and it does not have any other alternatives because it will not use nuclear. If the winter is really cold, it imports power on the grid from a nuclear power station in France or Sweden, so there is a bit of kidology going on there. It is clear that, if a country is half nuclear and fortunate enough to have hydro or wants to use photovoltaic or renewable energy, it can create a small carbon footprint.

At the moment, 38 per cent. of Scotland's electricity is generated from nuclear power. I was at a seminar in Scotland recently when someone from a technical institute said that they had profiled the longest period that they could foresee Scotland surviving, even with the growth of wind power, without having to cut off the electricity, or switch off the lights, as Mr. Davies described it. It would be 16 years without nuclear.

The reality of wind power is that all the profiles show that it can replace no more than 18 per cent. of the base load, because it cannot be stored. There is no profile to show that more than that can be replaced and, unless David Howarth can do so, no one has ever proven differently.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I invite the hon. Gentleman to make it clear that the base load is only 20 per cent. of the entire electricity demand, so when he refers to a third of base load, he is talking about only 7 per cent. of overall demand.

Michael Connarty (Linlithgow and East Falkirk, Labour)

My understanding is that 29 per cent. of our electricity was generated by nuclear in 1979. That percentage is now lower at 19 per cent., and heading for 18 per cent. because the Magnox stations have been turned off. The profile in the 2003 report was that it would fall to 7 per cent. with only Sizewell B running by 2020.

The replacement is not available and the idea that it does not matter is contradicted by the fact that I celebrated, as did the Liberal Democrats and all the supporters of renewables, that we reached 2 GW from wind power. That is fantastic, but it does not represent a great proportion of what we use. It is a question of whether the glass is half-full or half-empty. The hon. Gentleman would say that it is half-full when talking about renewables, but half-empty when talking about nuclear. I would be much happier if we had made a commitment to maintain that 30 per cent., and Patrick Moore made a good argument for showing that the carbon footprint would be much better if we considered going to about 60 per cent. That is not to say that the other 40 per cent. cannot come from renewables elsewhere, but we have a different perspective. The Scottish dimension worries me because we have parties committed to no nuclear rebuild, and that would be a problem for me.

Turning to the legacy and reprocessing, I heard what my hon. Friend the Member for Copeland said about what goes on at Sellafield, and its 17,000 jobs. That may be a strong argument, but things must be done properly, and it cannot be good just to keep employing people. It is clear that Sellafield and reprocessing are vital to the nuclear industry, and it is important to me as a Scottish Member. We have no reprocessing facilities in Scotland, and we must reprocess Scottish waste somewhere in England. I am not sure how that squares with the policies of the parties who would abolish the use of nuclear power in Scotland.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

On the issue of waste and Scotland, all the waste that is produced by the nuclear industry in Scotland is in my constituency. In the event of independence, that waste will go back to Scotland. The agreement for housing that waste in my constituency is that it arises from Britain. I thought my hon. Friend might find that information useful.

Michael Connarty (Linlithgow and East Falkirk, Labour)

I have always argued that, in the chemical industry, the polluter should pay, and it is certainly sensible to stay within the United Kingdom. I want an integrated energy-producing and waste-reprocessing unit. Otherwise, we will end up with problems and conflicts. I am happy to repeat that argument again and again between now and the Scottish elections.

I have been looking at the new technologies. I have been to Canada and France to see what they do there, and I am extremely impressed by the passive safety technologies in the CANDU process. They are designed to prevent repeats of Chernobyl by incorporating features that cut out processing and other dangerous elements very quickly. The latest technology enables any problem to be completely locked off within 72 hours—automatically and without human intervention.

Those who like to create hysteria—I call them siren voices—talk about waste and spent fuel rods, and pretend that there is a ticking bomb. They give the impression that when fuel rods are removed and set aside those rods could blow up at any minute. I was astonished, as would be any hon. Member who visited a nuclear power station, that one can actually swim in the tanks where the fuel rods are kept. Obviously that is not recommended, but it is possible to swim in the water above the fuel rods that have been removed for reprocessing without contamination being likely. No radiation is given off from the surface of the water at all, because 5 m of water completely cancels it out.

The Canadian plan is that, after 10 years, the fuel will be taken into concrete bunkers that are open to the air, where it can be kept without any radiation registering on a Geiger counter. The Canadians talk of keeping fuel there for 100 years without nuclear pollution, so it is wrong to give the impression that a great reaction is going on.

Reprocessing has moved on immensely. I am not sure about the company structure, but I believe that Areva owns EDF and Framatome and that it is a holding company that, in turn, is owned by the French Government. We went to look at its operations in the manufacture of MOX fuel—mixed oxide fuel, which is mentioned in the report. When people are asked how much of a spent fuel rod can be reprocessed, their guess is 10 or 5 per cent. They do not realise that the actual figure is 96 per cent. and that not only the uranium but the plutonium can be dealt with. The material is reprocessed into mixed oxide fuel pellets that are put back into rods and returned to the customer.

At an Areva site in France, four bundles of spent fuel rods have been reprocessed from weapons-grade uranium. Britain's 100 tonnes of plutonium was described as a treasure. It might be stored in or near the constituency of my hon. Friend the hon. Member for Copeland, but in any event it is valuable because it helps in the creation of mixed oxide fuels, and the report says, I believe, that two nuclear power stations could be run throughout their life using the quantity of plutonium stored in the UK. The industry is sustainable and safe, and people should seriously consider the idea of "plutonium for peace", because when plutonium is not a scare story, it is very valuable.

Those who wish to use wind, wave and tidal power—particularly in Scotland—have the problem of getting power from the generating point to the user. The report raises the issue of the choice between national grid systems and dispersed systems whereby power is used near to the generation site. There is a great debate on that topic, and I think that the nuclear contribution should be the one to use the grid system. The Liberal Democrats are leading a big campaign in Scotland against a reinforced grid system that would extend across Scotland, even though it would use the renewable energy generated in the highlands and islands and get it to the end users, who are mainly in England, not Scotland. The Government should talk not only about where they put the stations but about whether they have a commitment to putting the grids in place to allow the energy generated to get to the end user—not necessarily using a national grid system, but perhaps a dispersed grid system.

The question of skills was raised by my hon. Friend the Member for Copeland. I have spent a long time considering the run-down of the skills that we require in the oil and gas industry. Despite the best efforts of the companies and associations—and the Government, through PILOT—there is a major skills problem in the UK. There is no doubt that we have to consider that as an EU question. For example, at the moment a refit, shut-down, maintenance job is going on in my constituency at INEOS, the company that bought the chemical olefins derivatives section of BP. Some 270 skilled workers were required, but we could not get more than 200 from the UK, even after asking all the associations and trade unions to supply them. Companies have had to bring in people from Poland, Portugal and elsewhere, paying them high rates of pay and additional expenses so that they can live in hotels. If we are to renew the build programme in the UK, we shall have to do that on a skill base at EU level. That underlines why it was so important for the EU to take those policies recently.

The second issue is the capacity of the licensing body. We heard a bid from the hon. Member for Bournemouth, East, who argued for an additional consideration for the pebble-bed process that has been developed in South Africa, on top of the Areva, Westinghouse and CANDU processes. My understanding is that talk throughout the industry is that the Government are sending out signals that they cannot cope with more than two pre-licensing examples; they only licensed two of the three that were named, even though there was a bid for a fourth, because there is not the capacity.

That is a sign of how far things have run down or of how many people, as my hon. Friend the Member for Copeland said, have left—because of age, not because of any lack of interest in the industry. There is a reigniting of interest in the industry at Birmingham, where there are nuclear industry courses, and among the trade associations. However, it will take a long time to get the capacity. If the licensing body does not have the capacity, all the aspirations in the report will come to naught. We will have to reduce the market and say that we can have only two players as we cannot cope with three—or, as I have been told, we will have to wait two further years if we want three. That leads me to disagree with my hon. Friend.

Quentin Davies (Grantham and Stamford, Conservative)

The hon. Gentleman has made an enormously important point. Does he share my hope that, in responding, the Minister will directly address that issue—the extent to which the capacity and capabilities of the nuclear inspectorate might be an avoidable delay in the launch of a nuclear programme in this country?

Michael Connarty (Linlithgow and East Falkirk, Labour)

I certainly have that aspiration, but I must also commend the Minister. When he was Minister for Energy, he worked with PILOT. There is no doubt it was the Government that put together the consortium that brought together their aspirations and those of the trade unions with the energies of the industry. The industry was turned around when it had been going in a similar downward spiral. I hope that those skills will be brought to bear on the question of the NII, which is the first organisation that needs to be considered. If the door is too narrow, we will never make the market that we require.

The second thing that we should do is use the information that other countries use for licensing. For example, I have been told that one of the reasons why the building of Areva's new generation in Finland has taken longer than was hoped—it is said that it is behind schedule—is that the Finnish authority is very strict and keeps coming up with more and more rules and regulations. If that is the case, the information used in that process should be readily transferable to a UK system, without our having to go and reinvent the wheel and ask for it to be done all over again. That is often what happens—companies spend huge sums, but when they come to the UK are told, "We have the gold standard. We do not want to read that document. You will have to write it all again and we will take as long as we like to consider it." We have to realise that, in the EU particularly, we now have comparable skills and standards in this industry. We should use that to shorten the process.

The other question is about land use planning. I noticed that one of the recommendations, on page 77 of the Committee report, is for a review of the planning as well as of the licensing system. The oddest thing at the moment is that, when an energy source is being talked up as a solution, political parties are very keen. Then, when there is an application for a wind farm or something else in the locality, the very same parties at the local level are the biggest opponents—nimby, not in my back yard. [Interruption.] Or "not in my constituency". We have to deal with that. If we now have nuclear power stations in locus, and a new one is to be put in the same location, no logical question can be asked about whether there is permission for that land use. The process could, therefore, be very much foreshortened.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

I would like to tell my hon. Friend and others that I am an "imby" and have made several requests for two new nuclear reactors at Sellafield. Nothing would please my constituents more, starting tomorrow, if the Minister is listening.

Michael Connarty (Linlithgow and East Falkirk, Labour)

That is my experience when talking to my hon. Friend Anne Moffat, who has Torness power station in her area, as with the hon. Members around the Hunterston B power station in Scotland. People there are very supportive of the nuclear industry. We went to Canada and found very much the same—people there would gladly have taken another station. In fact, I understand that different parts of Canada have been bidding for the waste facility, since the very substantial report put together by a former United Nations environmental commissioner for the Parliament of Canada.

The last question about capacity is about the capacity to manufacture. From my information from talking to people in the field, I worry that the large castings industry—the steel industry required to cast the pressure vessels—is very under-supplied at the moment. The Americans have no capacity at all, because they pulled out of nuclear. I was recently in the Framatome processing site in France, which four years ago the Government were planning to shut down. The new chief executive of Areva convinced them not to. Areva took over Framatome, which it is now investing in and expanding. They were creating pressure vessels for Three Mile Island and for Florida—in fact, they had just finished a 200-tonne pressure vessel for Florida, which was about to go out of the door when we were there. But there is no capacity in the US. There is capacity in Japan and talk of new build for manufacture in Korea and other places, but at the moment people are booking slots for pressure vessels without any customers. They are booking them four years ahead, so that when they do get a customer, they have the pressure vessel to supply the nuclear power station. That is how bad things are. I think we need to get together on an EU basis—in fact, worldwide—to talk about that.

I have a suggestion for the Minister. Having done a number of seminars with people in the industry and having talked to people on the financial, legal and manufacturing sides, they are in absolutely no doubt that the Government have to come up with something to secure the carbon price. We could say that the emissions trading scheme will do that, but looking at it recently—at one point, it was trading at €60, then it went down to minus—the market is far too volatile. Tinkering with the emissions trading scheme may help, but I do not think that it will do what we require it to do.

My suggestion is that the Minister and the Government should think about how to get together a PILOT for the nuclear industry. Talking to people on the legal or financial side, they all have their little commercial niches and secrets, which for me recalls the days when the North sea was running down. People were hanging on to plots that they would not explore because it did not fit their commercial model, and they would not tell people what they had found. However, the Minister got involved and all that was freed up. They started to exchange information, put packages together and give up their little piece of a plot so that someone else could explore that licence area. We came up with the Buzzard field and made big finds in different areas. I think that there has just been a new one in the past month.

People need to put together their knowledge and help make the market, but the Government must make that move. I do not know whether it will eventually mean, as the hon. Member for Grantham and Stamford suggested, that the Government will go further and underpin the market, but we must get everyone working together to make the market before we can move forward. Part of that will involve the carbon price, and the other part depends on the will of the Government, once they have made up their mind, to sit down and put together a team to work with a purpose.

Having said that, I was dismayed to find when I had my last meeting with a group that one of the companies said, "The problem is that the next time we go across to some European organisation, the DTI team will be completely different, because the civil servants that we have worked with for the past three years will have moved on. They'll be in agriculture or somewhere else." The Government are shifting the very people who have built up that knowledge during the past three years to other duties because of the civil service rotation problem. It is a real problem for an industry and a company in which people commit their lives and investment capital. They put themselves on the line for their entire business life, only to find that the people in Government with whom they are working shift every three years. If we have a PILOT, let us make sure that the pilot has a crew who will be there until we end the journey.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I start by congratulating the Chair of the Trade and Industry Committee on securing this debate, but I share his regret that, for various reasons, many hon. Members have been unable to attend today, including many who hold the same view as I do.

David Drew (Stroud, Labour)

Does that include John Thurso?

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

Yes, absolutely. My lonely role here today is to represent those who are still far from convinced that the case for civil nuclear power has been made.

As I see it, the main argument in favour of nuclear power is that, although it is not a magic bullet—as the Minister often says—it is needed as part of the mix, for three reasons. First, as many hon. Members have mentioned, there will be a generating gap. How will the lights be kept on? Secondly, it is needed for carbon reduction purposes. Thirdly, it is needed for security of supply.

I do not think that any of those reasons hold up to analysis. Not even the Government believe the generating gap theory. The question is whether the market will cope and introduce new supply to fill the 25 GW reduction that might occur as nuclear plants close and some coal plants must close or choose to refit. In response to the Environmental Audit Committee's report, "Keeping the Lights On", the Government said that their own modelling

"indicates that in most scenarios, the risk of having unserved electricity demand is unlikely to become substantively higher than today until around 2015. Even then, the amounts of 'shortfall' between demand and supply are likely to be small and could therefore potentially be resolved by some companies voluntarily shifting their electricity consumption from peak to off-peak times in response to price signals."

In other words, the risk of the lights going off, to which some hon. Members have referred, is grossly exaggerated. There is no real risk of it—even the Government recognise that—and no need to panic. The market will plug the gap without any change in policy. Moreover, the risk itself, although small, decreases the more existing nuclear stations' lives are extended and the more existing coal stations undertake the regulatory requirements to which they are subject.

There is also the question of timing. Even with reforms of licensing and planning, it is unlikely that nuclear new build can make a contribution to carbon emission reduction for at least 10 years—it would make only a small contribution even after that period. The Government's response to the Environmental Audit Committee's report states:

"Government agrees that even with facilitating measures, new nuclear build is likely to make only a small contribution to carbon emission reductions and security of supply by 2020".

That then raises the question, why go for nuclear at all? Reducing carbon emissions over the next 10 or 15 years is crucial, and the Government say that nuclear new build will play absolutely no part in it. After 2020, we will see new technologies coming on line, not only renewables such as tidal, wave and solar power technologies, but those such as carbon capture and storage, to which the Chairman of the Committee referred. It is significant that the date given in the EU proposals on energy policy for all new coal power stations to be employing carbon capture and storage is 2020. In reality, that is about the time when any new nuclear will be going on line. The question is why we need new nuclear power at all if other carbon-saving technologies will be available at the time that that nuclear power is due to start.

Michael Connarty (Linlithgow and East Falkirk, Labour)

I have to inform the hon. Gentleman that I questioned the person responsible for the first and most advanced proposal for carbon capture, who was a junior at BP when I first met him. In front of a large audience at Stavanger last year, he clearly said that carbon capture is technologically feasible, but that the go-ahead is not yet guaranteed because it is not yet financially viable.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

It was significant that the Chairman of the Committee said that the finances are rapidly changing with the technology. I agree with him that, left to the market, it is possible that carbon capture and storage will be able to outbid nuclear quite soon. The nuclear industry is always optimistic, but I think that it is being over-optimistic.

I have never been able to grasp the point made by nuclear advocates on the security of supply because there is no domestic uranium and European supplies of uranium are insufficient to keep nuclear power plants going for long, especially if there is new nuclear build that uses up existing and known supplies. All usable uranium has to be imported, not only from Canada and Australia, but other countries such as Uzbekistan and Kazakhstan. On the other hand, wind, tide, sun and coal are local and there are plenty of suppliers within our political grasp, as it were.

Instead of comparing itself with those sources of energy, the nuclear industry usually compares itself with the gas industry. True, gas will probably play a bigger part in the generation of electricity in the next few years regardless of the policy on nuclear new build, because gas is probably the source from which new electricity generating capacity will come as other sources decline, depending on the relative price of gas and coal. That is not in any way an argument for nuclear. By the argument that I have been using, nuclear will not be able to plug the gap in the time scale. The policy problem—the problem of a secure gas supply—applies regardless of nuclear policy.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

Is the hon. Gentleman aware of the radiation dose received by the European population as a result of the extraction of oil and gas?

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I should be grateful if the hon. Gentleman would tell me.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

The largest dose that the European population receives per head from radioactivity comes from the extraction of oil and gas from the North sea and elsewhere. Those are the findings of a long-established analysis undertaken by the European Union. I should be happy to furnish the hon. Gentleman with a copy of the report if he would like one.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I should be grateful to receive the document, although I cannot see what relevance such information has to my point about security of supply.

The nuclear industry has an appalling record of cost overruns. As many people have said, the nuclear industry runs as much on optimism as it does on uranium. The famous and heavily state-supported Finnish reactor to which reference has been made is already €600 million over budget and 18 months beyond its schedule. No British nuclear project has ever come in both on budget and on time. In addition, the industry has a record of secrecy.

Peter Luff (Mid Worcestershire, Conservative)

I do not have a mandate to defend the industry, although it is true that broadly I am sympathetic to it, but I do not understand the relevance of the cost issue. If the market is delivering, the private sector investors bear the problem. As it happens, every one of the Canadian reactors has come in on budget and on schedule. Matters are for the private sector to determine.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

When upgrading reactors, even Canadian projects have come in massively over budget. So even there, in one of my favourite countries, such things are not always done well.

My response to the hon. Gentleman's argument is that the industry also has a sorry record of receiving hidden subsidies. The market is rigged in favour of the nuclear industry. Billions of pounds of public money have gone into research and development for nuclear energy, compared with tiny amounts that have gone into research for other forms of energy. If we include fusion research, even now nuclear research takes up more than half of publicly funded energy research. That is one hidden subsidy.

The hon. Gentleman is shaking his head. I shall show him the graph that I received from the UK Energy Research Centre later.

Peter Luff (Mid Worcestershire, Conservative)

Throughout the whole of Europe, overwhelming research goes into coal. That is where the public support goes, not into the nuclear industry. It is distressing to hear factual arguments being dismissed. The hon. Gentleman has some important points to make. I have a lot of sympathy with what he is saying, but the facts are against him.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I heard the Chairman of the Committee change the unit of analysis. He was talking about Europe; I was talking about Britain. I am pretty sure that, if we include fusion, public support for energy research in Britain is still overwhelmingly for nuclear.

The other massive subsidy for the nuclear industry is in the form of the Nuclear Installations Act 1965. It limits the liability of nuclear installations for nuclear accidents to about £150 million and promises Government money of up to £350 million per accident over and above the amount of £150 million. It leaves any excess damage on the heads of the victims. The nuclear industry should, like other industries, pay its way. It clearly does not when it comes to nuclear accidents.

Let us consider the estimates for the cost of Chernobyl. They vary from around £4 billion to more than £100 billion and are way higher than the liability limitations that the Act grants to the industry. The industry says that, without that cap and hidden subsidy, the risk would be uninsurable, but to echo what the Chairman of the Committee said, that is the industry's problem. If a risk is uninsurable, it might be because no one should be taking it.

Jamie Reed (PPS (Mr Tony McNulty, Minister of State), Home Office; Copeland, Labour)

That is an anti-nuclear fantasy of long standing. This spectre of "the industry" is invoked every time the issue is discussed. There is no such thing as "the industry". The UK civil nuclear industry has absolutely nothing in common with the former decrepit, dilapidated Soviet nuclear industry.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I was not suggesting that the risks from nuclear power stations in this country and western Europe are in the same league as those from former Soviet bloc power stations. I was making a point about the cap on liability. A cap on liability is a massive subsidy to the whole nuclear industry. If the industry had to bear that liability itself, it would make the industry uneconomic. That fact cannot be denied. Nuclear plants are not as reliable as the hon. Gentleman has implied. There are various estimates for load factors in excess of 90 per cent. Last year, four Swedish plants had to be turned off at the same time because of an accident in one of them. That is a warning to those who propose that the Government should help the industry by ensuring that a single design for the new nuclear fleet is brought forward. The problem with that is if, as happened in Sweden, one discovers a very dangerous flaw in one plant, all the plants of the same design would have to be turned off at once. That is one of the biggest threats that one could imagine to security and continuity of supply.

Similarly last year, a Spanish plant, which was responsible for 20 per cent. of the country's electricity supply, had to be turned off because it overheated in the hot weather. Even the French had to turn off the Dampierre plant this month. Members might remember an incident last year when the whole of northern France lost power for days on end. That happened because the connection between France and Germany was damaged. The French electricity system is predominantly nuclear-powered. It is massively inflexible and cannot cope with having its connection with another country broken. The French grid exports and imports vast amounts of electricity. Therefore, the claim made by Mr. Drew that the French independent grid system is the best in the world is quite false. The French depend on import and export because nuclear power is so inflexible.

David Drew (Stroud, Labour)

I was talking about the interconnector. We are a major importer of the French nuclear industry, and without the interconnector operating, there have been times when we would have seen the lights go out in this country.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

The hon. Gentleman is making an error that many people make when discussing electricity. They think that importing electricity is worse than exporting it. In fact, they are both the same. The grid has to be balanced. If electricity cannot be exported because the interconnectors are broken, the whole of the grid could go up like a big fuse. The inflexibility of nuclear power is risky because of that fact and not just because of imports. The French also import vast amounts of electricity.

Michael Connarty (Linlithgow and East Falkirk, Labour)

Is not the hon. Gentleman arguing about the problem of grid systems rather than the source of the energy? We have the same problem. That is why the proposal is for a very much higher rated grid from the north of Scotland to the conurbations of Scotland, which of course is opposed by his own party.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

No, it is not about the grid system; it is about any grid system with a high percentage of nuclear power. The 60 per cent. that the hon. Gentleman proposes would be as dangerous as the 80 per cent. used by the French. The problem is that nuclear power stations cannot easily be turned on or off. Therefore, they are very inflexible. All this talk about base load—the concept of base load is an artificial construct because it is only the minimum amount of electricity being used on the grid over a long period—reveals a misunderstanding of one of the basic problems of controlling a grid, which is that it has to be held in balance at every point. Nuclear power cannot do that.

Michael Connarty (Linlithgow and East Falkirk, Labour)

I am sorry to take the hon. Gentleman up on this. If a huge array of wind power was generating electricity in the north of Scotland on a very windy day and there was a problem with the grid connection at some point down the line, the same problem would occur: energy that had nowhere to go would be coming down the grid, so all the wind farms would have to be switched off.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

No, the problem would be that the nuclear stations could not be turned off and that is why the grid would fail. [Interruption.] It is dangerous, risky and expensive to turn nuclear power stations on and off. That is one of the difficulties of nuclear power. [Interruption.] I move on to other aspects of costing, because the oddity of costing nuclear power extends to the energy review. We have delved into the costing offered for nuclear in the energy review and we found some odd things indeed.

First, one of the things that is known about nuclear power is that there are risks involved in the construction stage, not only political ones, but the inherent risk of the very long construction stage. As a result, experience from around the world shows that the relevant financing costs are about 3 per cent. higher than energy industry averages, yet the energy review's figure for financing the build stage of nuclear power is exactly the same as the percentage cited for all other technologies. That is simply a false assumption. Nuclear new build will involve a much higher level of risk—a 50 per cent. higher level of risk—than that borne by other sorts of projects.

We noted another odd thing. I suspect that this is for accounting nerds only, but it is important. The DTI's energy review is not using standard techniques for calculating the weighted average cost of capital for nuclear projects. Instead, it is using a weird mixed technique that discounts only some of the costs and therefore gives a big advantage to long-term projects. In other words, it is favourable to nuclear power.

Were standard investment appraisal techniques to be used and the right cost of capital inserted, nuclear energy would be shown to be vastly more expensive than the Government claim. We could include a carbon cost of about £20 a tonne and assume that nuclear energy has virtually no carbon cost—I am willing to accept that for the sake of argument. In even those circumstances, nuclear power would come out as being more expensive than onshore and offshore wind power—without any subsidy—and more expensive than tidal stream technology and carbon capture and storage. The only thing that it would be cheaper than is coal.

Even without including all the figures for the hidden subsidies and without taking into account the arguments about nuclear power crowding out investment in renewables, the arguments about it undermining efforts at energy saving—that seems to have happened in Finland—and the arguments about locking in the grid system to a centralised system that would impact on the ability of the system to accommodate decentralised energy, nuclear power is not a good bet over the time scales that we are talking about.

Michael Connarty (Linlithgow and East Falkirk, Labour)

I am sorry to keep coming back at the hon. Gentleman, but I must point out that the PB Power report of 2005 "Powering the nation", to which the Select Committee referred, makes it clear what the costs are. The relevant cost of nuclear energy is 2.8p per kWh. The only sources that are cheaper are without carbon capture: gas and coal with none of the carbon capture. Even gas with carbon capture is more expensive per kilowatt-hour. This is a substantive report by an institute that everyone in the industry respects. I hope that the hon. Gentleman's party also respects it.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

Of course, those estimates are changing over time as new cost estimates are coming through. I am talking about what is in the energy review, which I think is biased in favour of nuclear energy in a serious way.

Quentin Davies (Grantham and Stamford, Conservative)

Will the hon. Gentleman give way?

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I will not, because I need to finish my speech to allow the Minister and the spokesman for the official Opposition time to speak.

I just want to make a final point, which arises out of several comments that have been made. The nuclear industry needs to be open. A number of hon. Members have said that it has had a terrible record. The Chairman of the Committee made a very eloquent statement yesterday in the House when he commented on the statement. The industry has a terrible record of secrecy, which undermines confidence. Many other people have also said that. Bill Nuttall, the academic, says exactly the same thing in his works on nuclear renaissance. That is the message of the CoRWM report and Professor Gordon MacKerron.

However, there is a fundamental problem with that argument. That is, that nuclear power, because of its inherent technical links with nuclear weapons and weapons technology, can never be purely private. It will always have a security element. It is interesting, for example, that the person who was recently appointed to head the civil nuclear constabulary is not a career police officer; he is a career intelligence officer from the Secret Intelligence Service. There will always be a link and, because of that link, the industry can never be wholly open. That applies both to techniques and to materials. I agree that the industry would do itself a lot of good by being as open as possible. However, I think that it is an impossible dream that the industry could be as open as other industries.

Charles Hendry (Shadow Minister (Energy, Science and Technology), Trade & Industry; Wealden, Conservative)

May I begin by drawing the attention of the House to my entry in the Register of Members' Interests, which shows that, last year, I went on a trip sponsored by E.ON to look at nuclear waste disposal in Sweden and a nuclear power plant in Finland? In case people fear that my soul has been bought, it is listed alongside the entry for a trip to look at onshore and offshore wind farms and oil and gas facilities.

I congratulate my hon. Friend Peter Luff on the way in which he has introduced this debate and the extremely robust report that his Committee has produced. The way in which he drives these things forward and his energy and commitment are evident throughout, not only in his speech, but in the thoughtful report that has been produced by his Committee.

We have had some extremely good contributions in this debate. A lot of knowledge and constituency interest have been brought to bear. I will pick up on a couple of those points. My hon. Friend Mr. Davies is quite right to say that decisions need to be made soon. This is not an issue where we have the luxury of time on our side and where we can put off decisions until a future date. We need to make progress quickly.

I also pick up on the point that Mr. Drew makes, namely, that we need a strategy for waste disposal. Regardless of whether we have a new generation of nuclear power stations, it is to our shame as a nation that we have not addressed that issue more substantially and earlier.

I listened with interest to the personal journey of Michael Connarty from old Labour leftie perhaps to Blairite, modern, new Labour luvvie, in a way that would bring joy to the hearts of the Labour Whips Office. However, I would not encourage him to take a swim in the tank in which the radioactive waste is stored. I understand that the water contains the radioactive waste and radioactive particles, and if he gets in it, he will be in very serious trouble indeed. That may also bring joy to the Labour Whips Office, but I would discourage him from doing so.

My hon. Friend Mr. Ellwood made an interesting reference to fusion. Fusion has been 20 years away for the past 50 years. One day, we will get there. However, that makes the point that we are making decisions that will stand for relatively few years and, in time, some new source of energy, which as yet is perhaps not even thought of, may come through and address these issues.

David Howarth talked rather idealistically. He talked initially as though carbon capture and storage were a certainty, and under pressure from the hon. Member for Linlithgow and East Falkirk, he said that it was quite possible that carbon capture and storage could outbid nuclear energy quite soon. I felt that that was quite a qualified comment in the circumstances.

The challenge of this debate is that we are expected to make the decisions now, when the technology for many aspects of energy and electricity generation is not yet clear. We do not know what their potential will be.

I agree with a great deal of what is said in the report; indeed, I agree with it overwhelmingly. The report is right to say that there should have been a more detailed assessment of future generating capacity before the energy review was published last year. I think it likely that the nuclear installations inspectorate will give life extensions to many of the power plants involved, but the Committee was being over-optimistic in saying that there was not a serious energy gap, because we do not know the role that coal can play. If carbon capture and storage can be made to be economically feasible, coal has a very bright future. However, without that feasibility, we would have a very serious energy gap opening up.

I absolutely agree with the report as well that the Government should be technology-neutral in these matters. The Government should be setting a framework in which business decides how to invest. That is why we have recommended that there should be a system of cap and trade. Under such a system, the Government would say that, over a period of years—many years, 40 or 50 years ahead—if carbon is going to be produced in the course of generating electricity, a certificate should be required to do so and the number of certificates would decline year on year. Therefore, people could invest with great confidence and great knowledge of exactly what the price of carbon was going to be 20 or 30 years ahead. However, the Government absolutely should not be picking winners. They cannot build a dome, or a football stadium. What on earth makes anybody believe that they could decide on the right balance for our energy policy?

The report is also right in saying that the public are more supportive of nuclear power when it is linked with a greater commitment to renewables. A YouGov poll said that 56 per cent. of the population backed nuclear power in conjunction with a greater commitment to renewables. I am sure that that is true, but I query a little the statement that my hon. Friend the Member for Mid-Worcestershire made about the need for a national consensus. That consensus is certainly desirable, but it is noteworthy that in Finland the public support followed the political decision and the decision of the Government. It is the case that, once that decision was made, the public have been moving more in favour of the nuclear debate.

There is no doubt, however, that the Government are in something of a mess over the issue. There is no doubt that they should have consulted more on the nuclear aspect of this debate. As Mr. Justice Sullivan said in summing up the Government's consultation proposals, it contained information that

"was wholly insufficient for them"—

that is, the public—

"to make an intelligent response."

I think that Greenpeace is largely right in saying that any consultation process requires clarity in identifying the problem; integration, to ensure that it ties in with wider energy policy and climate change debate issues; independence, in that it should be carried out by professional experts; a layered approach, so that the technical discussions should run alongside public engagement; and feedback, which shows how the consultation will affect the outcome of the Government's policy.

David Drew (Stroud, Labour)

Will the hon. Gentleman give way?

Charles Hendry (Shadow Minister (Energy, Science and Technology), Trade & Industry; Wealden, Conservative)

I will not give way, because I want to give the Minister time to respond. I hope the hon. Gentleman will understand that.

I agree with the Chairman of the Select Committee when he says that there are inherent complications if the Government decide to launch the nuclear consultation document at the same time as the White Paper, because that would require assumptions to be made that cannot necessarily be delivered.

Our preference is clearly for as much energy as possible to be generated through renewables. I believe that we are on the brink of a revolution, in terms of what is going to be possible. Indeed, every week we are seeing new ideas being developed. This is an extraordinarily exciting time for energy. However, we do not have a philosophical objection to nuclear power. The Opposition view is quite simple. We have said that we would prefer to see other sources of energy being developed, but we accept that, if nuclear power must be used to keep the lights on, then it has a role to play. More than that, we accept that, if people wish to invest in nuclear power, without subsidy and taking account of the full long-term decommissioning costs, then, as the Chairman of the Select Committee has said, it is not the role of the Government to stop that sort of investment.

Therefore, there should not be a subsidy, and potential investors must take account of the cost of disposal of the waste. We are quite to happy to see that investment made, as in Finland, on the basis of pre-sale agreements, where customers are found in advance and therefore it is known exactly who will buy the electricity that is produced. We take what is an entirely realistic view on the subject, but we need to see who will come forward on that basis. E.ON, EDF and Atomic Energy of Canada Ltd have all told us that they will do so. However, the challenge for the Government is what happens if such companies do not come forward. As my hon. Friend the Member for Grantham and Stamford said, there is a significant chance that, when they look at the economics, they may decide simply not to take forward that investment. That would leave a gaping hole in the Government's energy policy, one that we would avoid by saying that we take a much more neutral approach towards these issues.

If the nuclear policy is to move forward, the industry itself must do more to try to win this debate. Yesterday, a statement in the House highlighted the secrecy that has traditionally gone with the nuclear industry. It will only win hearts and minds by much greater openness than has been the case so far.

I have visited Sizewell B and know that the issue of safety there is paramount, but too many people do not believe that science has moved on since Chernobyl. They accept that there have been advances with their television and their car, with aviation and every aspect of science—everything, apart from the nuclear industry. The industry has to get out there more and persuade people that the world has changed. We must learn from overseas and look at how the debate was changed in Finland, for example, if this is to be the course that we take in this country. In Finland, two towns were bidding for a nuclear power station, partly because they wanted the business rates that went with it. In Sweden, there are two communities bidding for the nuclear waste site.

Mr. Cook, you will remember that 20 years ago it was suggested that Billingham in your constituency should be a nuclear waste site, but I do not think that 1 per cent. of the population would have backed that. However, in Oskarshamn in southern Sweden 80 per cent. of the population think that nuclear waste should be buried in that district. The nuclear industry there has won that debate, because it has been open and taken thousands of people a year to look at the potential site. It has, in many ways, put our nuclear industry to shame by the way in which it has conducted that debate.

We should also recognise where we as a nation can lead this debate. The work that Nexia Solutions, a former nuclear research body, is doing could lead to its playing a global role in using British technology and expertise. Regardless of whether we go down the route of new nuclear build, it has a significant contribution to make.

We are committed to changing the planning regime. There should be a level playing field. If people are going to come forward to invest in nuclear power, which is not our preferred option, the planning regime has to be changed. There has to be site and type approval.

We must learn the lessons of the past where we have gone wrong. If we are going to encourage economies of scale, nuclear power stations must be built to the same design on various different occasions, without people saying, "We have chosen one from this design, two from another and one from that one", which will massively increase the costs of building them. If that is to be a realistic option, we must learn to achieve the economies of scale, as they have done in France.

This has been a useful debate. The Select Committee's report is excellent. There are three alternatives available to us: the not-at-any-cost approach of the Liberal Democrats, which is to put one's head in the sand; the Government's approach, which is that this must be an integral part of our energy policy, without necessarily having the means to deliver it; and the realistic one, which is to say, "Let Government create the framework and let business decide."

Malcolm Wicks (Minister of State (Science and Innovation), Department of Trade and Industry; Croydon North, Labour)

I, too, think that this has been a useful debate. I have immense regard for the Select Committee system. I once chaired one myself. May I congratulate the Select Committee Chairman on the authoritative, lucid way in which he introduced its findings? The vast majority of the conclusions in the Committee's report reflect the position and proposals that we advanced in the energy review, which hon. Members know set out how the Government plan to meet the two major challenges facing us in the 21st century, namely, climate change and our energy security. We use the word "security" advisedly, rather than simply "supply".

It is worth reminding ourselves of the scale of those challenges. I have said before that when the history of the 21st century is written, not just for the UK, but globally, those twin issues will loom as importantly as some of the big issues about war and peace and the development of welfare states in the 20th century. Climate change is with us now. I was fortunate recently to visit Antarctica, where I talked to British scientists in the excellent British Antarctic Survey about their work on climate change.

In simple terms, we set out in our energy review that, in the face of those challenges, a low carbon and diverse energy mix is crucial. Those proposals will now be taken forward in our energy White Paper, which will be published next month. The Government responded to the Select Committee report last October. Last year, I gave evidence to the Committee on the energy review, so I do not want to use the time that I have this afternoon to repeat myself. Instead, it will be more useful to update hon. Members on recent developments. I shall also address the key elements that the Select Committee said should be the basis of any new policy decisions on new nuclear.

I have listened carefully to the views of hon. Members. We have had some important contributions from my hon. Friends the Members for Stroud (Mr. Drew), for Linlithgow and East Falkirk (Michael Connarty) and for Copeland (Mr. Reed), and of course I listened with great care to the interesting speech by Mr. Davies. We also heard speeches from two Front-Bench Opposition Members.

The Select Committee discussed a broad national consensus on the role of nuclear power, a carbon-pricing framework, the long-term management of legacy waste and a review of the planning and licensing system. I should also acknowledge that it identified issues such as pre-licensing and site selection, which are important for nuclear new build. They would need to be dealt with to enable any new power stations to be built.

Let me start with the judicial review. As hon. Members know, the Government accepted the High Court's judgment. We will publish a further consultation document next month alongside the energy White Paper. Our new consultation will endeavour to meet the Court's requirements, and it will bring together the evidence and analysis that the Government have collected and published since the energy review began. It will help people to reach informed views and to provide the Government with valuable contributions.

Our preliminary view, which is, of course, subject to consultation, is that there is a case for having new nuclear power stations as one of the options open to developers of large-scale electricity generating capacity. However, we will consider the comments that we receive before we reach any decision. This is not about nuclear for nuclear's sake; it is about the potential that nuclear has to reduce carbon emissions and to contribute to security of energy supply.

The Select Committee commented on the need for a broad national consensus. We have already said that we are committed to further consultation and that we will need to consider carefully the responses that we get. The Government recognise that nuclear is a subject on which many people have diverse views. The consultation will enable us to hear and to understand those views, and will inform our decision in the autumn.

Nuclear would only ever be one part of a future diverse energy mix. Renewables, other low-carbon technologies, energy-efficiency measures and carbon capture and storage will have to play an increasingly important role if we are to meet our challenging energy policy goals. The White Paper will set out the overall conclusions in respect of our energy strategy.

The Chairman of the Select Committee asked whether there would be nuclear new build by the private sector, in view of the political uncertainty and its impact on the cost of capital. Of course, political uncertainty is not purely in the hands of the Government. I listened carefully to the Conservative spokesman, but I am still a bit puzzled about the place of nuclear in the Conservative strategy. There are time scale problems that need to be addressed—I offer that advice freely, of course, in all senses.

The Government's response to the question is that the private sector will come forward if the economics are attractive. Our current view is that, provided the prerequisites that the Select Committee identified— planning, licensing, carbon pricing—are addressed, the economics will become more attractive. Those are precisely the issues that were identified in the energy review and that, subject to the outcome of the consultation, would need to be dealt with to enable any new power stations to be built.

There have been other developments. At the recent spring Council, EU leaders approved an ambitious climate change and energy package. The fundamental aim is to cut greenhouse gas emissions by 20 per cent. compared with 1990 levels by 2020, or by 30 per cent. if other countries also play their part. The targets are tough, but, through that package, the EU is sending a powerful message to the rest of the world that we are serious about tackling climate change and ensuring security of supply.

We will also continue to work in Europe to address issues surrounding the European Union's emissions trading scheme. The Commission has been tough in assessing the caps for the second phase. The market is expecting the price of carbon to be about €17 next year, which shows that the market believes that the scheme will have a real impact on emissions. That is encouraging. However, we will also keep the option open for further measures—I have listened to colleagues' views on that—in order to reinforce, if necessary, the operation of the scheme in the UK and to give greater clarity to investors. That answers another key point raised by the Committee concerning the framework of carbon pricing.

I have listened to a number of colleagues' views on nuclear waste, including my hon. Friend the Member for Linlithgow and East Falkirk. Comment has already been made on his suggestion that the waters are safe enough to swim in. One always looks for a photo opportunity, but on this occasion I would simply offer to hold the towel for my hon. Friend.

Since I last addressed the Select Committee, the Government have made progress on the issue of nuclear waste. We can be proud of the fact that we are the first UK Government to take decisive steps to resolve that issue. However, we are realistic and know that it will take concerted action to bring about a lasting solution. I should add that I visited Finland to examine its strategy on waste.

As the Committee will know, we are currently developing plans for a consultation on geological disposal and how to take forward the CoRWM recommendations. We aim for that to take place this summer. There will be more in that about volunteerism. I am advised that managing radioactive waste supply is the name of the project to which I have referred.

We all recognise the significance of planning, about which the hon. Member for Grantham and Stamford spoke in an interesting manner. The Committee rightly said that the current planning system can be a significant barrier to investment in all sorts of new infrastructure. All hon. Members are aware of that and we certainly came to the same conclusion. The system needs to be reformed to give us the infrastructure that we need on the right timetable, whether it be for energy or other types of large infrastructure. To that end, the Government will shortly publish a planning White Paper, which will take forward proposals for the reform of major infrastructure planning. Energy will, of course, be an important part of that.

The Committee has concerns on a number of other matters that I will now attempt to address, but I will start perhaps with another matter raised in the debate: reactor type and design. That is not a matter for Government per se, as it is, broadly, for the private sector to make judgments about that. Most of us would agree that that is the sensible approach. We have heard about a number of different companies and designs, so it is for the private sector to judge. However, of course, that must be subject to licensing. It is for private sector technology vendors to decide whether they want to have their technologies pre-licensed, and it is for the private sector generators to decide which licensed technologies to deploy if licensing shows that they are safe.

Skills are now a frequent matter for discussion, not only in the energy sector, but in many other sectors about which we are concerned. The Committee's report concluded:

"Constraints in the domestic skills capacity could be overcome".

In our energy review we agreed with that. We know that there are significant skill gaps in the decommissioning and waste management sector. We understand that the demography of the work force means that more people are closer to 50 than to 25—if I can summarise it in that way. Many of us have sympathy with that demography.

We know that there are significant skills gaps in the decommissioning and waste management sector, but we believe that the Nuclear Decommissioning Authority, Cogent, which is the sector skills council, and the industry more widely, as well as the recently established national skills academy for nuclear are pulling together a strategy to deal with those gaps. As the Minister responsible for skills in the Department of Trade and Industry, I promise to take a close interest in those developments.

Regardless of the decision on new nuclear build in light of the consultation, skills will continue to be an important issue. That applies both to existing nuclear power stations and to long-term decommissioning and waste management.

Charles Hendry (Shadow Minister (Energy, Science and Technology), Trade & Industry; Wealden, Conservative)

I am most grateful to the Minister for giving way, given our time constraints. When he went to Finland, was it impressed on him, as it was on me when I went there, that when the announcement about new-build nuclear was made, nuclear engineering departments started opening up in the universities? They are now producing graduates to help to build that programme, and they have had time to develop the new skills base.

Malcolm Wicks (Minister of State (Science and Innovation), Department of Trade and Industry; Croydon North, Labour)

I recognise that, too. I should assure hon. Members that we have learnt lessons from other nations and we will continue to do so. France and Finland obviously, but not exclusively, come to mind.

David Howarth, the Liberal Democrat spokesman, did not have time to set out the party's strategy on energy policy, but he asked one or two questions as he piled attack on attack, in an obsessive way, on the nuclear industry. When I think of the Liberal Democrat strategy, I think of the last era when the Liberals were in power and a Foreign Secretary reflected in wartime that the lights were going out all over Europe. The hon. Gentleman still has to prove that, if the political miracle, or nightmare, of a Liberal Democrat Government occurred, the lights would stay on. I do not quite see it.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

Will the Minister give way?

Malcolm Wicks (Minister of State (Science and Innovation), Department of Trade and Industry; Croydon North, Labour)

On the subject of wind power, I give way briefly.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

Perhaps the Minister could explain his Department's response to the Environmental Audit Committee's report, to which I referred.

Malcolm Wicks (Minister of State (Science and Innovation), Department of Trade and Industry; Croydon North, Labour)

I am not sure that I can explain it. I am not sure that I understand the question. Let me reflect on it, and if it is worthy of an answer, I will reply in writing.

The hon. Gentleman made some technical, but important points, no doubt, that the DTI energy review used non-standard discount rates and costs of capital. The model used in the energy review was extensively peer-reviewed by external experts who were satisfied as to its robustness. We took the arithmetic very seriously.

My hon. Friend the Member for Linlithgow and East Falkirk asked about grid infrastructure, which is crucial in terms of any development that we are proposing or hoping to see. Ofgem has recognised the need for increased investment in the distribution networks. In its last electricity distribution price control review, it increased funding allowances for investment for 2005 to 2010 by approximately 50 per cent. over levels spent in 2000 to 2005. That is an important point, which is often neglected and I thank my hon. Friend for raising it.

It is interesting that, however few hon. Members are present in the Chamber, we always spend three hours debating, which is gratifying on a sunny afternoon. To sum up, the Government have reached their preliminary view on potential new nuclear build for two main reasons: the science of climate change is now very clear and we need to secure our energy supplies as the amount of oil and gas in the North sea declines.

We will bring forward our consultation on nuclear next month. It is important that people engage with the arguments. If people have better solutions, then, of course, we are listening. We are faced with difficult choices, but any Government worth their name must surely be prepared to show leadership while listening to views on this crucial issue. That is what we intend to do. We have made a good, as it were, new start this afternoon. We have had an excellent discussion involving all hon. Members. Again, I thank the Chairman of the Select Committee for an excellent report and for introducing it with such clarity and authority.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Five o'clock.