Nuclear Liabilities: Financial Assistance

Orders of the Day — Electricity Bill – in the House of Commons at 5:32 pm on 24th July 1989.

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Lords amendment: No. 158, in page 117, line 21, after "incurred" insert "or to be incurred".

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I beg to move, That this House doth agree with the Lords in the said amendment.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

With this it will be convenient to take Lords amendment No. 159, in page 117, line 26, at end insert— (1A) Subject to paragraph 4 below, the Secretary of State may, with the approval of the Treasury, enter into an agreement with any person under which the Secretary of State undertakes that, if such conditions as may be specified in the agreement are satisfied, he will exercise the power conferred by this paragraph in such manner and to such extent as may be specified in the agreement. Amendment (a), after first 'agreement,' insert 'to be no longer than 5 years in duration.' Lords amendments Nos. 160 to 162.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

The amendments will fulfil the commitment given by my noble Friend in another place to put the provisions of schedule 12 on a firmer footing. It is important that the nuclear generators should have the certainty of knowing that the Government will stand by their assurances to provide funds, and the amendment simply provides for the Secretary of State to enter into contracts to meet those obligations.

The Opposition amendment (a) to Lords amendment No. 159 seeks to restrict the length of the contract to five years. That would make the policy unworkable. The contracts need to last long enough for the Government to make the payments when they fall due. The stage 3 decommissioning of power stations may not take place for 100 years after the station has closed, and vitrified high-level waste will not be finally disposed of until at least 50 years after vitrification. It is essential, therefore, for the contracts to be capable of lasting for a long time. While accepting the Lords amendments, I would ask the House to reject the Opposition amendment.

Photo of Tony Blair Tony Blair , Sedgefield

The Lords amendment alters substantially the position as it was in the Committee and Report stages of the Bill here. The Secretary of State said in his statement today that if there had been any benefit of privatisation, it was to have exposed the economics of nuclear power. It is worth pointing out that it was only two and a half years ago that Mr. Hadley, the secretary of the Central Electricity Generating Board, appeared before the Sizewell inquiry and proclaimed that the Magnox reactors, about which we have heard a lot this afternoon, were saving the consumer some £250 million a year. Throughout the history of nuclear power until privatisation, we were told consistently that it would be cheap. Indeed, that was the primary case submitted by the CEGB in support of Sizewell. What has happened since then is not that by some magical process of privatisation or a great evolution of market power it has become clear that nuclear power has become more expensive, but, in crude terms, that, where it used to be in the interests of the electricity board to tell us that nuclear power was cheap, it is now, short-term at least, in its interests to tell us that it is expensive so that it can get more guarantees and more subsidies from the Government.

When we debate the schedule and the Government amendment, we should remember that we are not merely debating those nuclear liabilities, but we are debating them against the background of the nuclear tax to pay for the new PWR stations that will be costing the consumer about £20 or £50 a year. The nuclear quota will remain in being and will ring-fence the nuclear industry in that special way, but the cost of decommissioning, which will form part of the nuclear liabilities cost, will arise not merely in respect of the Magnox stations that have been shuffled back into the public sector today, but in respect of the PWR stations that are about to be decommissioned in the United States. The estimates of cost for commissioning the advanced gas reactor stations are again escalating at a fairly rapid rate.

During our deliberations we heard much from the Secretary of State about how he wants to rid us of the iniquities of the cost-plus system, but under privatisation, and under the provisions relating to nuclear liabilities, we will have cost plus and then the profit on top of that necessary for the private sector to take a dividend for its shareholders.

The amendments have a peculiar and coloured history. My hon. Friends will remember that in Committee those nuclear liabilities for the end-of-cycle costs of decommissioning, reprocessing and disposing of nuclear waste started off as simply those costs that were entirely unforeseeable. The only example that we received during the entire Committee stage was that a future Government might bring forward stage 3 of the decommissioning process and that would add to the cost. That would indeed add to the cost. Indeed, recent estimates show that it would add about £200 million to the cost of decommissioning the power stations. I add, too, that it appears that the fact that a future Government may change our procedures to bring them into line more with those procedures operating as best practice abroad is entirely foreseeable. Why we should guarantee and insure a private sector company against that risk, I do not know. That is the only example that the Minister gave us during Committee of where the schedule would be activated.

We were then told in the other place, when the matter was debated, that that was to be extended not merely to items that were unforeseeable, but to what were called, in the words of Baroness Hooper, factors "outside the industry's control". That is an utterly vague statement on which we should have clarification today. What has happened, too, between our debate in Committee and the Bill's returning to the Floor of the House for Lords amendments is that the discretion of a Secretary of State to exercise power and to give nuclear liabilities the underwriting in the way I have described has gone and has been replaced by these words in the amendment: the Secretary of State may, with the approval of the Treasury, enter into an agreement with any person under which the Secretary of State undertakes that, if such conditions as may be specified in the agreement are satisfied, he will exercise the power conferred by this paragraph in such manner and to such extent as may be specified in the agreement. In other words, a discretion has been replaced by a binding agreement into which the Government now want to enter to shore up the nuclear side of the privatisation.

The importance of that is that the discretion would be exercisable at the time when the contingencies against which it is guarding arise. Therefore, the discretion might be exercised when a future Government change the decommissioning plan or when the factors "outside the industry's control" materialise. I hope that the Minister will deal with that point.

Presumably the arrangement in the Lords amendment now contemplated by the Minister will be agreed to before privatisation. The purpose of the amendment, therefore, is to give binding rather than discretionary guarantees to the industry before privatisation. Surely it becomes all the more important that we should assess the contingencies that may give rise to that binding agreement and what its terms would be.

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A binding agreement will be entered into as a result of the amendment and Parliament will give the power to make that agreement. The extraordinary thing is that we do not know the terms of the agreement, its duration, the contingencies against which it may arise or the consequences of the agreement for public sector funding. Nothing is known about this open-ended agreement to subsidise a private sector company from public funds. It is therefore outrageous for the Government to enter into such an agreement on our behalf in order to shore up a privatisation which, as we heard earlier today, is failing so badly.

Why have the Government not taken all the nuclear power stations rather than just the Magnox power stations out of the privatisation? The explanation is perfectly simple and it is an important one to remember when considering the amendment. The Government have not taken the Magnox stations out because they have a greater appreciation of the future success of the other stations compared with those Magnox stations—some might argue that the advanced gas-cooled reactor stations are in a worse shape than the Magnox stations. The Government have withdrawn the Magnox stations because they know that if they took all nuclear power out of the privatisation, as we urged them to do, they would have to withdraw I he Bill.

In Committee and throughout the passage of the Bill we were told that the 70:30 per cent. split between National Power and PowerGen was necessary to ensure the marketability of the nuclear sector within the industry's structure. If the Government withdrew nuclear power from that structure, they would then have to withdraw all the structure.

It is important to remember that, under the agreement, the price that we shall pay has been upped from £1 billion to £2·5 billion. That is the sum for which we, as taxpayers, will be liable. The price that we pay as taxpayers and consumers is, no more and no less, the price of saving the Government's face.

I must make it clear that we wholly repudiate the notion that the Government should be allowed to enter into an open-ended agreement for the public subsidy of a private sector company. We do not regard the introduction of the amendment as a proper exercise of ministerial discretion.

Photo of Malcolm Bruce Malcolm Bruce , Gordon

Today's statement has sharpened the purpose of the amendment and for many outside it will be put into sharp focus the commercial and safety risks associated with nuclear power. During the past 15 years the Government have had an incredible record of misinforming the public about the case for nuclear power. It is therefore difficult to see how any innocent speculators can be reassured by the Government's admission that the Magnox stations are too big a risk to be privatised, but that they should not worry as the Government will underwrite the risks of the other nuclear power stations. People are supposed to be reassured that those stations do not suffer the same problems of uncontrolled costs and environmental complexities as the Magnox stations. We have heard it all before and no one should take the Government's word about nuclear power.

Over the years the views of many of us have been vindicated. Throughout the passage of the Bill we have given the Government the benefit of our advice, but they have refused to take it even though, at the last gasp, we have been proved right and they have been proved utterly wrong.

The amendment is an open cheque as it is an attempt to get the House to accept that the private sector, which will run the nuclear power stations, should have unlimited access to taxpayers' money to cover the cost of its commercial mistakes, engineering failures, the difficulties associated with reprocessing, however unpredictable, or any other environmental consequences of the industry's activities. I hope that the Minister can tell us what other part of the private sector of the economy has such cast-iron, gilt-edged and open-ended guarantees. If such an amendment had been tabled by an Opposition party to cover any other industry it would have been ridiculed and condemned by the Government. Here they are, however, asking the House to accept a Lords amendment that will provide such guarantees.

The Secretary of State told us that he has only just discovered that nuclear power is more expensive than people thought. Many of us could have told him that a long time ago if he had been prepared to listen.

Photo of Mr Rhodri Morgan Mr Rhodri Morgan , Cardiff West

The right hon. Gentleman has moved rapidly.

Photo of Malcolm Bruce Malcolm Bruce , Gordon

That is true. The right hon. Gentleman has told us that it has just become apparent that the cost of reprocessing is escalating at an unprecedented rate. Those of us who study the industry could see that coming and, in the circumstances, the escalation in costs is not entirely surprising.

It is not just a matter of problems associated with reprocessing as other changes are taking place. The hon. Member for Sedgefield (Mr. Blair) mentioned Baroness Hooper. She said that risk was being shared in such a way in areas which are not subject to the control of the nuclear operators That underlines my point about the amendment being an open cheque. She also said: We must look very carefully at this area to see whether we can give greater certainty to the investor and the public that the Government will meet their side of the deal. Therefore, at Report stage we intend to table an amendment to Schedule 12 to enable the Secretary of State to enter into binding commitments in this respect."—[Official Report, House of Lords, 19 June 1989; Vol. 509, c. 20.] That quote sums up the Government's attitude. They are much more concerned about the potential investor than they are about the best strategic way in which to run the industry or about meeting the public's concern about nuclear power.

The cost of reprocessing has escalated and is continuing to escalate dramatically. What happens if the cost of reprocessing makes nuclear power stations unviable? Today's statement does not make any difference. The entire cost of the lost capacity would fall on the taxpayer; there would be no risk to the shareholder. What would happen if Sellafield or THORP—the thermal oxide reprocessing plant—were closed on safety grounds? As a consequence the Magnox power stations would have to cease to produce. Who would bear the cost of that? Who would find the replacement capacity? The answer is that the taxpayer would bear the cost. To pretend that normal risk analysis or risk management would operate is an extraordinary distortion.

There is evidence to suggest that my theory is not just a fanciful concern. At the Hinkley inquiry the National Radiological Protection Board said that evidence of recent years suggested that the acceptable radiation dose had been set at too high a level. It suggested that the level should be reduced to a fraction of the current level. If what the board is proposing were introduced, it would mean that about one third of the employees at Sellafield would be exposed to radiation levels above the safety level projected by the board. The Minister must acknowledge that, if that is so, it is difficult to see how Sellafield or THORP could continue to operate. Already they have been threatened with closure, and if that happens the consequences for the taxpayer will be phenomenal.

Earlier, the Secretary of State tried to impugn the Labour party's commitment to the coal industry, and what it has cost the taxpayer, and I suppose that the Opposition's commitment is fair game. But what the Government are proposing is potentially a far greater commitment than that to the coal industry. The Bill is already committed to costs of more than £7·5 billion, and they go up by about 20 per cent. every time it returns to the House. I imagine that there will be numerous orders in the coming years on occasions when the Government come back to the House to seek further consent to increase borrowing to cover the costs of decommissioning and rising reprocessing charges.

Until recently, not many people suggested that we would simply abandon a decommissioned nuclear power station in a concrete shell for 100 years. Interestingly, the industry has tried to make that sound like an acceptable proposition, but I do not think that it will prove acceptable to have a decaying nuclear power station—monitored though it may be—wrapped up in concrete as a monument looming over people's communities. People will want total decommissioning; they will want stations removed; they will want land to be freed from the blight put upon it—

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury)

Will not that be especially true in cases in which the generating board has its eye on greenfield sites and beauty spots like Druridge bay in Northumberland, where there will be not only a building but a structure that will last for 100 years?

Photo of Malcolm Bruce Malcolm Bruce , Gordon

My hon. Friend raises a pertinent point. This factor will be used by objectors in future planning inquiries into the implications of building nuclear power stations. No longer will the industry be able to say—however unacceptable even this might be—that it is a question of a 25 or 30-year cycle, and then the structure will be removed. People know that it is so difficult to succeed in planning applications that one fades away, then another comes along, followed by another. My hon. Friend's point was a fair one: many communities will find it wholly unacceptable that a piece of land is likely to be frozen and out of use for up to 200 years. At least with a conventional power station, they know that it can be removed and that the site can be levelled within a generation or a generation and a half.

All those factors will affect the cost and liability of the industry. They will make many people reluctant to invest in it. We are faced with this prospect because of the consistent resistance of the City and other quarters to the saleability of a private electricity company based on nuclear power. and on Magnox reactors in particular. A poll published recently showed that about 17 per cent. of the population said that they might be willing to buy shares in the privatised electricity industry, but on closer questioning, more than half of those said that they would not buy shares if they included a nuclear component.

The Secretary of State may have had the worst of both worlds. He has failed to remove nuclear power altogether from the privatisation, but he has removed enough of it to tell these people that their judgment about the nuclear power industry was right and that an investment that requires them to buy into it is likely to be difficult—except that the Minister will be able to wave this proposal in front of them and tell them that they will make a profit while the taxpayer bears all the risk. The Government have signed up a wonderful deal for the investors. That is dishonest and immoral and it represents a principle that the Conservative party would not defend in any other context. It is the worst sort of double standards and double dealing to be brought before the House on this matter.

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The public should share my view and, if they have any sense, stay clear of the industry, and not only because it is not necessarily a sound investment: it is a bad risk with which they should not wish to taint their hands.

The Government are asking for an open-ended commitment which will leave investors feeling uncomfortable, which will not satisfy public concern and which will underline the fact that nuclear power should have stayed in the public sector. Surprisingly, the hon. Member for Bedfordshire, North (Sir. T. Skeet) is not in his place; I should have thought that he would be anxious to contribute. He said from the outset that nuclear power should be kept in the public sector, as did the CBI. Many of us who opposed the privatisation recognised that it would have been tidier without the nuclear industry. It is extraordinary that the Government have not even been prepared to accept good advice either from the Opposition or from their own Back Benchers. We believed that, although privatisation should not go ahead, without the nuclear industry the argument for it could stand on its merits.

The Government have conspicuously failed to realise that. Their proposal involves a blank cheque which will mean, over time, that the industry will cost this country, in subsidies from the taxpayer, more than the coal industry has done to date—and by a substantial margin. It will do so in circumstances that utterly destroy the rhetoric for privatisation. This is a dishonest piece of legislation, of which this amendment is the most dishonest part.

Photo of Dr Alan Williams Dr Alan Williams , Carmarthen

I find it strange that we are debating schedule 12, in view of the Government's statement this afternoon. As Magnox reactors have been removed from the intended sale, I should have thought that at least half the problem of decommissioning has been removed from the privatisation, and I would expect dramatic changes in schedule 12, the more so since Magnox reactors are near the end of their lives and will incur these costs first.

The same goes for all our discussions today. The changes implicit in the statement should be subjected to the sort of discussion that we had in Standing Committee, because many of the premises have been wholly changed.

There is a fundamental objection to schedule 12. Why should the public carry all the risk of the escalating costs of waste and decommissioning? The sums mentioned in this context—£1 billion or 12·5 billion—are small compared with what I suspect the true eventual figures will be.

We have no real idea of how we shall get rid of high-level nuclear wastes. Intermediate-level waste will be given a shallow burial, probably at Sellafield. That will be very expensive and I do not think that the public, even near Sellafield, will accept it. Ideas for high-level wastes are still at the design stage. No country has got rid of its high-level waste, and the costs will run on for up to 100 years. The wastes will stay radioactive for hundreds or thousands of years, so how can we estimate the costs? One billion pounds or £2·5 billion seem trivial amounts compared with the true costs. Estimating the cost of decommissioning is crystal ball gazing. We understand that for Berkeley the cost may be about £300 million. Stages 1 and 2, which involve taking out the waste and reprocessing, will certainly account for that. We have no idea of the cost in 100 years time of dismantling the power stations and £300 million sounds like a terrific underestimate. Experts in the industry think that the cost could be anything up to £2 billion per reactor. That figure is from the Financial Times newsletter article, "Power in Europe" which is edited by Mr. Andrew Holmes. Where will that money be found?

In Committee we tried to estimate the foreseen costs for waste and for decommissioning and arrived at figures of £10 billion, £12 billion or £16 billion. Those are the present guesstimates. Apart from the guesswork involved in arriving at such figures, the fundamental objection to schedule 12 is why should the public carry the risk, especially in view of today's statement that Magnox reactors will be left out of the privatisation. The new privatised National Power will have AGRs and PWRs which will run for 20, 30 or 40 years. Presumably they will be operated at a profit but, if not, there is the nuclear tax to fall back on. When it comes to waste and decommissioning, the buck will be passed back to the taxpayer. Schedule 12 is wrong in principle.

Photo of Alex Salmond Alex Salmond Deputy Leader, Scottish National Party

I should like to put two questions to the Minister to see if we can clarify the economics of the nuclear industry in the Government's mind. I understand that the Government now accept that the nuclear industry is not fully economic. In a whole variety of ways and through some ingenious subsidies, ways are to be found to subsidise the industry or to give comfort to private investors thinking of investing in nuclear power stations.

Can the Minister of State, Scottish Office tell us whether that is still the Government's thinking in terms of the Scottish nuclear industry? In Committee, the Secretary of State for Scotland still maintained that the nuclear industry was fully economic, and the most cost-effective method of generation in Scotland. My first question to the Minister is whether the Government feel that nuclear generation is not economic in England but is economic in Scotland.

If it is fully economic in Scotland, how does that square with the evidence given last week to the Select Committee by the chairman of the Atomic Energy Authority? Under the most strenuous questioning by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) the chairman of the authority accepted the argument that the final decommissioning costs of nuclear power stations were unquantifiable at this stage. If the chairman of the Atomic Energy Authority is correct about that, how on earth can the Secretary of State for Scotland maintain that in Scotland the economics of nuclear generation is comparable with other power sources?

Perhaps the Minister of State will make a careful note of my second point, so that, when the Secretary of State returns, he will be able to give an answer to a question on which I manifestly failed to extract an answer from him earlier today. Given that the electricity companies are discounting over a long time the possible costs of decommissioning nuclear power stations, what will happen if the private companies go out of business before the costs fall due? Who will pick up the tab if the private companies which are to be given that responsibility are no longer around to meet the costs?

Photo of Mr Ian Bruce Mr Ian Bruce , South Dorset

I should like to comment briefly upon the way in which the Government have decided to unscramble the electricity industry in a very much different way from that which was originally proposed. Many of us understand the problems that any Government would face in trying to privatise a complex industry such as electricity generation and separate the different companies and the way in which they will operate.

The Government were correct to decide that there should be competition. I have always felt that perhaps the nuclear element of the industry should consist of one or more separate companies. The amendments are sensible, because the Government need to have powers to take account of contracts and other such matters. It is rather strange that the Opposition should try to defeat such contractual arrangements because, basically, the Government are seeking the ability to set out what is for sale and the agreements that are to be made in the industry. They seek to be able to say to potential investors that this is the way in which the Government will take out uncertainty about the reprocessing and decommissioning costs on the nuclear side of the industry. By doing that, the Government are not subsidising investors or giving them additional profit. By taking out that uncertainty, they are ensuring that the price paid for the other assets is much higher than it would be if such a doubt were allowed to influence the price. They are protecting the assets of the Government and the taxpayer by doing it in that way.

I stress to the Government that the uncertainty about the way that decommissioning and reprocessing will be dealt with is causing problems. Like any Back Bencher, I appreciate the Government's difficulty, because every time they make a decision about the way that we are to dispose of or reprocess waste, the NIMBY syndrome appears. That is designed to stop us taking decisions, and sometimes we have to go down what seems to be long and involved roads and try to put nuclear waste within a constituency that is already so heavily committed to the industry that it feels that it must provide a site for the spent fuel.

The Government's nuclear policy contains some imponderables. As we know, the City dislikes imponderables and will take the worst case and add 50 per cent. for good luck. Taking out the Magnox stations is a sensible idea. However, the Secretary of State for Energy has left within National Power a hostage to fortune, in that the management of that company could well use it as a milch cow by putting all the costs that it possibly can on the nuclear side, knowing that the rest of the industry will provide a subsidy.

The AGR stations and the future PWR stations should be shown to be economic. Given the additional costs of solving coal-fired problems of pollution and the cost of "greening" fossil fuel burning, we shall see the equation between nuclear generation and coal-fired generation turning around. It is necessary to have within the Bill powers to give nulcear power a subsidy, if it is needed. However, I hope that my right hon. Friend the Secretary of State will look carefully at ways to introduce a profitable nuclear industry and stretch it out.

The Atomic Energy Authority and British Nuclear Fuels plc are left in doubt as to what will happen to the nuclear stations that they are running. In my constituency, there is a steam generating heavy water reactor, which was designed many years ago as an experiment—the first-off of a type of reactor that was then cancelled by a previous Secretary of State for Energy, the right hon. Member for Chesterfield (Mr. Benn). This station has a fairly limited life left, because its generators and other equipment will not last. We were assured that the station would be included in the non-fossil fuels requirement. Today's statement leaves us in some doubt about how this station will be dealt with.

The powers in the Bill are designed to help the Government to provide a sensible solution to the great difficulties of producing a privatised, denationalised electricity industry, and I commend them to the House.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth 6:30 pm, 24th July 1989

As I had to see a Minister about an urgent constituency matter, I missed part of the debate.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

They change so frequently that it is difficult to remember.

I shall not detain the House for long, but I have one or two important points to make. The other day, I took part in a "Worldnet" television programme, which lasted the best part of an hour, between Strasbourg and Washington. Taking part were an American senator in Strasbourg and other American politicians in Washington. It was interesting to hear them say that an expensive, large nuclear power station had been built close to Long Island, but although it was now just about complete, it would never function because they believe that it is neither acceptable nor economic.

The Secretary of State's statement about Magnox may have bought him some time, but whoever is Secretary of State for Energy after we come back from the recess will be appearing before the House to make yet another concession to try to make this privatisation work. Even with this concession, National Power will not be a successful flotation. The City may view PowerGen as dramatically more likely than National Power to succeed, because it has no nuclear encumbrance. However, if what I said both in Question Time and in the debate last Thursday is right, about the sheer fecklessness that we are about to experience as National Power approaches its launch in a few days' time, the City and many investors will be put off.

My last point echoes the point that I made when I asked a question of the Secretary of State after his statement. The prospect of electricity privatisation may be more attractive now in Tokyo, Frankfurt, New York and other such places than it is in London.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

I am glad to have the endorsement, from a sedentary position, of the hon. Member for Bedfordshire, North (Sir T. Skeet), who is the only Conservative Member to emerge with any credit from this sad and sorry tale. As he quite properly pointed out to the Secretary of State—false modesty has no place in matters as serious as this—he proposed in Committee the very step that the Secretary of State has taken today.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

The hon. Gentleman suggested part of the step. One recognises virtue on a larger scale than it might deserve. However, the hon. Gentleman recommended a course of action that we supported in Committee but the Minister rejected. It would he interesting to ascertain how much the dilatory response of the Secretary of State to that proposition has cost us. The Secretary of State may feel that privatisation is more worth while, but the City of London, in assessing the economics of privatisation, may now recognise, despite all the cosmetic actions that have been taken, and all the to-ing and fro-ing to No. 10, the Government now look like a sick Government, or a partial Government. They look like a partisan Government, concerned only with the interests of those who will be seeking to make a little money out of privatisation. Today's action will not make privatisation successful, and it will assist neither the new electricity industry nor the cause of those who wish to see the business of this nation conducted competently.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

I apologise to the House for not being here earlier, but I had to attend to one or two matters. I was here for the interesting statement by my right hon. Friend the Secretary of State for Energy. I asked a question afterwards and suggested that my right hon. Friend could have gone a bit further. It is a wise man who recognises that, taking all the factors into account., a change is necessary. It shows the effectiveness of the Committee system when a Secretary of State listens to the arguments of Back Benchers, listens to the arguments put on Report, and eventually makes a modification. I find this one helpful. [Interruption.] I can remember when the Labour party introduced a groundnuts scheme, which cost us £36 million. An argument was put forward carefully in Committee and the Government are big enough, wise enough and awake enough to weigh up the arguments and bring out the desired modifications.

The crux of the Bill can be found in clauses 30, 32 and 93 and the schedule 12. We are dealing here with the schedule. When we deal with structures that will be closed down by the turn of the century, some revision must be made. Has it occurred to Labour Members that we are now building a third unit into the competitive exercise? We shall have not only National Power and PowerGen, but the British nuclear firm. In Committee, I made the modest suggestion that if we put some of the other nuclear assets into this body, it would be extremely competitive, and would be the third side of the competitive wedge. If we bring in the renewables, towards the end of the century. more competition will be introduced.

Photo of Mr Rhodri Morgan Mr Rhodri Morgan , Cardiff West

The hon. Gentleman is rather jumping the gun. We were given no details to show that there will be a third company. If this were done by means of a sale-and-leaseback arrangement, that would not be the case. The Secretary of State gave no sign that a third company to supply nuclear electricity in England and Wales, with a bit of Scottish Magnox, would be set up.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

It can be done in two ways. If the Magnox assets are retained by the state, those in Scotland and England will be either pooled into one company, or leased back to the enterprises. Final responsibility will rest with the state. That gives an additional guarantee to those concerned and to any disquieted members of the public that they can have full confidence in the privatisation that will ensue.

Further details will have to emerge. We shall have to ascertain precisely how these measures will be implemented. I have no doubt, however, that the right concession has been made at the right time and that it will lead to a successful flotation of the companies. The concession was made because the market required it—the market wanted the removal of uncertainty. It would not have been possible to continue with such a large measure of uncertainty.

Unfortunately, schedule 12 was not discussed at any great length in Committee. However, the Government were told that additional money would be required for the reprocessing of nuclear fuels, for their storage—much depends on where we put them—and for the disposal of nuclear waste. The Government were prepared to set aside as much as £2·5 billion, but the first tranche was to be a much smaller sum than that. If the Secretary of State wants to put more money up front, I can understand his reasons.

Let us try to understand what decommissioning is. For the first 50 years little will occur. That will be the cooling period. It will be a long time before the decommissioning can be amortised. We must understand that the Central Electricity Generating Board has been making provision for the eventual decommissioning of its stations. I do not think for one moment that it has made satisfactory provision, but some provision has been made. I understand that it intends to make more and more provision as time passes. There is an advantageous position because the state enterprise in which the company is vested will remain with the Department of Energy, and the Department will be responsible for the reprocessing of the fuel elements. It will be responsible also for ensuring that any necessary repair work is carried out. It will be responsible for decommissioning.

Photo of Alex Salmond Alex Salmond Deputy Leader, Scottish National Party

I am sure that the hon. Gentleman has read the Select Committee's report on the accounts of BNFL, which contains the following passage: Using decommissioning to shift the burden of costs to future generations has little to commend it in economic or accounting theory or moral principle, particularly if the burden so shifted is a very substantial one. Does the hon. Gentleman endorse that view?

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

We must remember that there are cycles of popularity. The nuclear industry was extremely popular a few years ago but popularity has now shifted to fossil fuels. I think that in the years ahead the nuclear industry will become more popular. Fossil fuels have the disadvantage of CO2 sulphur dioxide, metals coming out of stacks and so forth. All these consequences have to be avoided and the shoe can move on to the other foot, as it were. Much depends on the amount of coal that comes on to the market, and it may be more restricted than we think. If that is so, the nuclear industry will gain in popularity. I should think that that would happen in about two or three years' time.

6.45 pm

Who would have thought that the price of uranium would have fallen from about $45 a pound to below $10? That fall in price has meant that it has become not especially profitable to operate all sites. With any commodity there will be periods of expansion and improvement followed by a period of deterioration. I have full confidence in the nuclear industry. It is wise to keep the nuclear industry going in the United Kingdom for the time when there will be improvements and expansion. Some countries have decided to let their nuclear industries go. If we followed that example, teams of experts would be disbanded. If £2·5 billion is made available for additional expenses and costs, the nuclear industry can be kept intact to a certain extent. That must be the desired consequence.

We have been told that no new nuclear power stations are being built in the United States. We must remember that the price of coal in the United States is very different from the price in the United Kingdom. The price here is relatively expensive, but in the United States the nuclear industry cannot compete with coal. I agree that the competitive element has gone in the United Kingdom that is on an 8 per cent. discount rate—but there are greater advantages here than there are in the United States.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Does the hon. Gentleman think that he or anyone else can estimate the full cost of nuclear power, including decommissioning? It is all very well to talk about the next 50 years, but somebody will have to pay the full cost at the end of the day. It is likely that for two or three decades the private sector will make a profit from our nuclear industry. When the time comes to pay for decommissioning, the bill will probably be met by the public purse. Is that what the hon. Gentleman advocates?

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

If a plant is dismantled, it normally has to be dealt with there and then. When a nuclear plant is decommissioned, it has to be left to cool for a number of years. That applies especially to the reactor. The first phase may be 50 years. We then enter subsequent phases. Therefore, nuclear costs can be phased over a period. There is ample opportunity to do that. The purpose of the provisions that we are discussing is to meet the future possibility of vastly increased costs. When we dealt with this issue in Committee, I recommended that the Magnox assets were not very valuable and that they should be written down to some extent. It could be argued that some of the assets in the coal industry are similarly not of great value and that they should be written out of the accounts. I recommended today that the coal industry should be subject to a reconstruction. It may be that after 100 years have passed we shall have to examine certain aspects of the nuclear industry with a view to deciding what should happen next.

I think that the Government are moving in the right direction. They have taken up the Magnox stations and kept them within the state scheme. I agree that they could have gone a step further, but they have not done so. A partial contribution is an extremely valuable asset.

Photo of Ian McCartney Ian McCartney , Makerfield

The Lords amendments stem from the directors of the National Westminster Bank. I have no doubt that the Secretary of State for Trade and Industry was to be seen scurrying to his inspectors to get them to examine the figures proposed by the Central Electricity Generating Board. We are talking not of a blank cheque but of the complete underwriting of a share issue because of the Government's fear that the City will not purchase at a sufficient level and that there will be a disaster on flotation.

These are not party political points being advanced by those who are opposed to the principle of privatisation. The issue arose in January in Committee when, fortuitously, the then chairman-designate of National Power sent a letter to my hon. Friend the Member for Sedgefield (Mr. Blair) in which he set out his concerns about the flotation of the company. He was anxious about its being saddled with the decommissioning costs of the nuclear industry. He argued against the underwriting by the company of the cost of fuel storage. He urged that the Government should construct a financial settlement that would protect BNFL, limit risks and enable it to be ripened, as it were, for future privatisation. The chairman-designate was opposed to the declared policy of the Department of the Environment that the polluter must pay. He said that, carried to its logical conclusion, such a commitment hung round the neck of the company would mean an unsuccessful flotation on the stock market. He said that he expected the Secretary of State for Energy to come up with proposals that would not only loosen the strings of that commitment, but would mean the Government picking up 100 per cent. of the continuing costs of nuclear decommissioning and the underwriting of fuel storage costs.

The Minister of State, Scottish Office is on the Bench and will respond to this debate. No doubt the Secretary of State and his Under-Secretary have been either successful or unsuccessful in the current operations at No. 10 Downing street. Perhaps we will be told later today what has happened. Will the Minister either confirm or deny that in January the Secretary of State received a letter from Mr. Baker making it clear that unless he introduced suitable amendments in another place it would be almost impossible to achieve a successful flotation of National Power? It is important that the public understand that the purpose of the amendments is not to provide some equalisation of market forces within the industry following privatisation; it is no more and no less than the use of taxpayers' resources to fund the flotation—a flotation which scares the Secretary of State stiff.

Mr. Baker's letter also made it clear that National Power was not prepared to agree to any commitment to phase 3 of decommissioning. He said: There is no way that you can guarantee that National Power will not become insolvent over the next one hundred years. Any impediment on National Power is only likely to increase the chances that it will not survive. He said that that would significantly reduce its attractiveness to investors". The amendments are designed purely to improve the attractiveness of the industry to potential investors, and the necessity to do that has obviously been quite clear since Mr. Baker's letter last January. My hon. Friend the Member for Wentworth (Mr. Hardy) was right to say that the beneficiaries of this policy will not be the taxpayers or the investors of the United Kingdom, but the foreign private capital investors who will buy the shares in the marketplace.

The Minister must clarify the statement made in another place about the Secretary of State giving up the power to decide on grants for unforeseeable costs. Indeed, under the amendments the Secretary of State relinquishes any power logically to decide on claims for the cost of decommissioning. By giving a blank cheque to the privatised companies he hopes to improve the chances of a successful flotation.

During the months since the Bill first entered its Committee stage, it has become increasingly clear that the public do not think that privatisation will benefit the nation. The Secretary of State has tried to push through this amendment while the manoeuvring at No. 10 is grabbing the headlines. He will not be successful—

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

The hon. Gentleman made a number of speeches in Committee. Does he accept that in most countries the private sector electricity industry is successful? That is partly because it involves an element of competition. Before the Government can privatise the industry, they must determine the value of its assets. Correct valuations must, for example, be made for all the reactors that will shut down by the end of the century. If a company is to be floated, it is important to decide whether its assets are worth nothing or a great deal. The Government have placed the private companies under an obligation to build four 1175 MW PWRs. That will be a heavy burden on the industry.

Photo of Ian McCartney Ian McCartney , Makerfield

The hon. Gentleman obviously did not listen to any of the arguments deployed by Labour Members in Committee, when we produced ample evidence of the problems. For example, New York state has had to step in to save a privatised company from bankruptcy. It sold and and then had to buy back the potential nuclear power generating capacity. The nuclear companies in France are on the verge of bankruptcy because of crippling costs and the French Government have had to intervene to prevent that. The hon. Gentleman knows that his argument does not hold up. That is why he, more than any Conservative Back Bencher who supports privatisation, has pressed the Government to underwrite the sale of the industry. Without a massive underwriting, not only will there be a shortfall on the expected proceeds from the sale, but in the long term the privatised company will be unable to cope with its social and environmental responsibilities as well as its prime objective of realising the profits that come from privatisation.

Photo of Eric Illsley Eric Illsley , Barnsley Central

I wish to make only a few brief comments, most of which will relate to the Secretary of State's statement this afternoon and the effect of schedule 12. The right hon. Gentleman said that the Magnox stations will now remain in public ownership, yet schedule 12 increases funding for unforeseeable costs from the interim level of £1 billion to £2·5 billion. That suggests that the funding is being increased for the benefit of fewer power stations. There will be a larger pie for fewer stations.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

There were many fund-raising Bills for the coal industry under the National Coal Board in its time. Each time it exhausted the upper limit, it was extended through a new Bill. I am sure that no one would suggest that schedule 12 will last for ever. Perhaps another £500 million will be required and the Secretary of State will have to come back to the House with a new Bill. That is in line with coal industry legislation.

Photo of Eric Illsley Eric Illsley , Barnsley Central

The hon. Gentleman merely reinforces the point that we made in Committee, that decommissioning costs were unforeseeable and the Government would have to come to the House time and again to obtain more money for the nuclear industry. Cost comparisons including decommissioning all show that coal-fired stations are more economic than nuclear-powered stations. The Electricity Bill has not yet completed all its stages, yet already the Secretary of State intends to raise the funding for unforeseeable costs from £1 billion to £2·5 billion, even though the Magnox stations have been taken out of the equation. The decommissioning costs are increasing even before privatisation. The Select Committee report in April endorsed our views on BNFI, in which the hon. Gentleman has a particular interest. Its decommissioning costs have increased fivefold because of the change of policy to decommissioning to greenfield sites in three stages over 100 years.

We must wait until the Bill reaches the statute book in the autumn before the necessary order for further funding is brought before the House and we have an opportunity fully to debate the matter. BNFL's liability for decommissioning costs alone has increased five times over the estimated amount. That begs the question of whether the Government will need to return to Parliament for more money to pay for the decommissioning of the THORP plant, the costings for which already lag well behind the likely actual expense.

7 pm

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I am obliged to the hon. Member for Bedfordshire, North (Sir T. Skeet) for the thought that the measure that is the subject of this debate might be the equivalent of the groundnuts scheme for the Government. However, there is a distinction to be drawn between the two, because I am sure that the hon. Gentleman accepts that the groundnuts scheme was based on idealism and good intentions, and no one can say that the same is true of electricity privatisation. Certainly it cannot be said of the muddle that we have witnessed today.

I am sorry that, although the Minister of State, Scottish Office, has been courteous enough to await the conclusion of this particular debate, he has chosen not to reply to it. I wanted to ask him one or two questions about the implications of schedule 12 for Scotland, and the Under-Secretary of State for Energy, who is beginning to look like a remarkably solid and permanent object on the shifting scene of the Department of Energy, may not be able to provide the detailed information I want.

As I flew to London this afternoon, it occurred to me that many important questions remained unanswered because of the total lack of information about nuclear capacity and nuclear costs. However, as a consequence of the past two or three hours, we have almost too much information—most of it confused and disjointed. Nevertheless, only the most churlish right hon. or hon. Member could retreat from remarking that there has been a most interesting series of happenings.

While I recognise that it is difficult to get the attention of any even junior Ministers on this day of all days, because there is some nervous tic on the Conservative Benches, I may tell the House that my interest in schedule 12 was triggered by a report last week in the Glasgow Herald that the South of Scotland electricity board's accounts will be delayed for up to six months. I was curious to know whether that was true and, if so, the reasons for the delay. Perhaps we can now guess at some of the reasons, but it will still be useful if the Minister can confirm that the SSEB's accounts have been delayed and that the explanation offered by those who monitor the industry is correct—that the arithmetic of nuclear power has gone so badly wrong for the SSEB that it has been compelled to delay publication of its accounts while it scratches its head about the way of presenting them in a more palatable form to those people who may be tempted to invest in the privatised company.

That is an extremely plausible scenario. As the Under-Secretary of State may recollect, last year the SSEB reported a £15 million operating profit, but it was suddenly translated into a £70 million loss because of the problems relating to the transfer of Chapelcross and of the sharp rise in BNFL's reprocessing costs. Those circumstances form part of the formidable evidence that the whole privatisation exercise is in appalling and fundamental trouble as a consequence of the escalating costs of Britain's nuclear capacity.

I confess that I am greatly irritated by the way that Ministers blandly deny even the existence of such troubles and there is hardly a ripple across their calm pond of ideology, when anybody who takes the slightest interest knows that there is a ferment of anxiety behind the scenes. It may even have reached the notice of the Energy Minister that in December 1988 the chairman of the South of Scotland electricity board, briefing the press at Torness, remarked that if the Government pursued their original plans, the privatised company would be unsellable. He asked for "absolute insurance" against the ever-escalating costs of reprocessing and the way in which he could apparently be held to ransom by BNFL and by the substantial costs of decommissioning, which are also constantly rising.

SSEB's chairman said at that briefing—I recall raising this point again and again with the Scottish Office—that the assurances will have to be signed and sealed before one writes a prospectus—otherwise it will not be worth writing. Clearly he felt very strongly about that matter. Subsequently, I and other right hon. and hon. Members pressed for details of the Government's intentions. There were tales in the press about secret deals and guarantees, but perish the thought, we were told it was a horrible idea that such things should be happening in smoke-filled rooms. In fact, I am sure that those rooms had very good air conditioning. We were told that nothing was happening, but now we know that a deal was hammered out, and that in essence it is an extremely bad deal for the taxpayer.

The Secretary of State for Energy—as he then was, and may still be—suggested that the Labour party was not in touch with reality and had failed to catch up with the developments with which he was dealing so bravely and effectively. However, when I raised various matters in December 1988, I received a reply from the Secretary of State for Scotland, who is ever-courteous in responding to queries, in which he wrote: I fully recognise Mr. Miller's concerns, but I am confident that there will be a range of instruments to meet them in a manner which both meets legitimate investor concerns and safeguards the position of consumers. There are no grounds for suggesting that the successful privatisation of the industry will be jeopardised by risks associated with the nuclear operating costs. A few months later, the Secretary of State for Energy stumbles to the Dispatch Box and concedes that there was every reason for concern, and that a major capitulation by the Government is required in respect of nuclear costs.

I still want the Under-Secretary of State for Energy to explain more about the Government's intentions. I realise that there will be detailed statements and a debate later, which I welcome. However, as the hon. Member for Bedfordshire, North fairly pointed out, we are faced with a patchwork quilt of responsibilities, consisting not only of the English distribution companies but of two generating companies, one of which will have nuclear interests, and in Scotland a nuclear company wholly owned by the two successor companies to the present boards. There will be a Scottish Nuclear Company, and there is the possibility—I put it no higher—of some continuing state nuclear capacity, which will mesh into that network in a way that is, as yet, obscure.

I accept entirely that the details have yet to be worked out, because the Government have not worked out the details of any of their actions. They never seem to be worked out, and the Government consequently shift and change their position. The Minister must surely be able to give an overview of how the network will work and describe in the broadest terms what kind of holding company, public institution, quasi-quango, state board or corporation will be created to look after the residue of Britain's nuclear capacity that is the surviving Magnox stations—and state who in Scotland will spend the £400 million or £500 million that will, according to latest estimates, be required for decommissioning Hunterston.

I take the point made by the hon. Member for Banff and Buchan (Mr. Salmond), quoting my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse), that it is difficult to quantify decommissioning costs. My impression is that it is possible to make some estimate at a given point in time, but the trouble is that, over a long time, costs escalate in an alarming and extraordinary fashion.

I have an article from Power in Europe, a newsletter which carries some authority in the industry, showing the Central Electricity Generating Board's quantifications of decommissioning costs between 1986 and 1989 for a Magnox station. They vary from £211 million up to £641 million, depending on which of those years one picks, and the time scale between stages 2 and 3. This shows the variants and the unknown factors that we are being asked to face.

We want to know a great deal more about this, and about the circumstances in which money will be paid out under schedule 12. We now know that the upper limit of £2·5 billion is at stake. That is a substantial sum of money. It looks as though the taxpayer is being asked to take over the difficult fag end of the nuclear industry—the older Magnox stations—and pay the bills as a sacrifice to allow the new privatised industry to be launched with reasonable prospects.

It seems to me that there has been not just a touch of muddle, but a scandalous willingness to prop up a crumbling and tumbling scheme, almost irrespective of the cost.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I shall not give way. I am anxious to make a couple more points before I sit down.

My worry is not with the City, or the financiers—I have some respect for the people who might invest in this company—but with the people who will get forms through the door, because they are South of Scotland electricity board customers, telling them that they will have a wonderful discount if they buy SSEB shares. I think that that is worrying. I am sure it must worry the Under-Secretary as well, if his senior colleague is right, and the Government have had to ride to the rescue because the electricity industry has not faced up to the true costs of decommissioning and reprocessing over the years, but must do so in future. I understand from that that the Minister expects those costs to be met partly out of schedule 12 funds, but substantially out of some reserve, some unidentifiable fund, to be built up over the years. It will face the formidable costs of decommissioning and reprocessing the AGRs in Scotland, which is bound to occur one or two decades after privatisation. I hope that the Minister will comment on that.

If we are to face the so-called true costs in the future, it is clear that there will almost certainly be a substantial increase in the price of electricity to the consumer. That is an inescapable conclusion from the statement we have heard today, and from the muddle and confusion that has emerged.

An article in The Daily Telegraph on 21 July said that there might be a 15 to 20 per cent. rise in electricity costs as a result of privatisation. The logic of what has been unveiled today makes that a real problem. It will be a problem for small shareholders and for the consumer. I do not think that the Government are out of the wood yet.

If the Minister sells these shares on the basis of the prospectus to people who are unlikely to have independent financial advice—people who get offers through the door with discount forms, who see the gloss and the glitz of the television advertising every day in their front rooms—to judge from the arithmetic and prospects that emerge from today's confusion, that would be the height of social and, I suspect, fiscal irresponsibility. The one thing that emerges from all this, with great clarity, is that the old story that I have been given year in, year out by the industry—that the best commercial basis on which to produce electricity is nuclear—has been blown out of the water. The truth is now out.

7.15 pm

Paragraph 78 of the Energy Select Committee's sixth report, on the greenhouse effect, says: Most strikingly, when questioned about the economics of nuclear power and the impending privatisation of the electricity supply industry in Great Britain, the Chairman of the UKAEA said that he did 'not believe that in the present situation or climate privatised electricity generating companies would invest in nuclear power, to be absolutely frank'. That we have again had to bail out a privatisation with the cynical use of taxpayers' resources does not hide the fact that the problems of nuclear power will haunt many of the Scottish boards, or rather the combined generating and distributing companies. I suspect, as the years go by, that exactly the same problems that have haunted the SSEB over the past few years will haunt the new companies and their shareholders and, given the Government's approach, the people who will pay the price, formally and unfairly, will be the customers who buy the electricity.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I hope that the House will agree to the Lords amendments that we are discussing and oppose the Opposition motions because, as I said in my opening speech, I do not think that it is sensible to put a time limit on these agreements.

Photo of Mr Rhodri Morgan Mr Rhodri Morgan , Cardiff West

The Government want a bottomless pit.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

The hon. Member says that we want a bottomless pit. That is precisely what is not implied in this group of amendments, in clause 93 and in schedule 12. A precise figure is attached to them, as he knows, because his knowledge of the subject is detailed. The figure is £2·5 billion. I remind the House that, for the figure to be raised from £1 billion to £2·5 billion, there will have to be an affirmative resolution. I want to underline what my right hon. Friend the Secretary of State said about that—the affirmative resolution will be debatable. Therefore, far from being open ended, as the hon. Member for Cardiff, West (Mr. Morgan) said, it is the reverse. It is specific as to what sums of money are involved.

I assure the House that these amendments do not make any difference, in substance, to the purpose of clause 93 and to schedule 12. That is common ground in the House, I would have thought. It has been made clear to us when writing the prospectus for privatisation that the additional net, if it can be called that, should be introduced into the Bill so that there is no doubt about the Government's intention to apply the terms of clause 93 and schedule 12. It underscores and underlines the Bill as it stands.

I understand, after today's statement, that the Opposition want to peg further questions and debates. II do not quarrel with that, but this is purely a technical matter, underlining clause 93 and schedule 12.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

Schedule 12 is there because certain costs cannot be evaluated because of the lengthy period over which they will mature. Decommissioning takes more than 100 years, so it is impossible to be precise, and, if one cannot be precise, one has to have this schedule to be able to deal with it. Is that not true?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I am grateful to my hon. Friend for making an important point which leads me to what I wanted to say in any case. The purpose of clause 93 remains exactly the same in relation to the new private companies. No doubt there will be unforeseen and indeed uncontrollable costs, but the powers under the clause will allow them to be met. The problem of the time scale would exist whether or not the industry was privatised, and regardless of today's statement; power stations of this kind have not been decommissioned before. The powers in the Bill clearly make sense, and the amendments simply underscore them.

The hon. Member for Gordon (Mr. Bruce), and a number of others, have thrown around the figure of £8 billion. I do not know where they got that figure; perhaps they will let us into the secret, and help us to make our dispositions even firmer. One of the reasons why we have no firm figure as yet was implied by the hon. Member for Glasgow, Garscadden (Mr. Dewar) when he asked me about the effect of Chapelcross on the profitability of the SSEB last year. Let me remind the hon. Gentleman that, contrary to the impression that he gave, Mr. Donald Miller has always been very enthusiastic about the sale—or so all his public statements have implied.

The hon. Gentleman's main question concerned the relationship between BNFL and the SSEB in the context of delayed accounts. I concede that negotiations between BNFL and the entire United Kingdom electricity industry on reprocessing are still in progress. Until the contracts are completed we cannot foresee the costs, as my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) has pointed out.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

I am not sure that the Opposition have worked this out properly. A different company from BNFL will probably be dealing with the Magnox reactors. I am assuming, on the basis of the schedule, that the additional costs of some of the reactors will come out of the £2·5 billion. If that can be clarified, we shall have made some progress.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I was coming to that point. As I have said, the companies left in the private sector will be subject to the criterion that we have already laid down, and about which I was questioned by the hon. Member for Sedgefield (Mr. Blair). My hon. Friend was wise and percipient to ask about the Magnox reactors: the powers in clause 93 could be applied to Magnox costs, should cashflow problems require it. We are not sure whether that will happen, as they will be earning revenue in the public sector as well as creating costs. My hon. Friend has made an important contribution by enabling that to be put clearly on the record.

There is nothing untoward about the Lords amendments, and I hope that the Opposition will not press them to a vote. It would certainly be extraordinary of them to press their amendment to a vote. They may not like our general policy; they may be concerned about the statement; they may have all sorts of worries. The problems, however, are long-term problems and have not occurred before. Any policy involving "capping" or "time-limiting" the agreements would, I feel, be wrongheaded.

Photo of Alex Salmond Alex Salmond Deputy Leader, Scottish National Party

I hope that the Minister was not intending to finish his speech without answering a question that I have already asked twice today. Given that decommissioning costs have been discounted over long periods, who will pick up the tab if a private company goes out of business before the costs need to be met?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

That is very unlikely, for a number of reasons. One of those reasons is that the regulator will be able to determine the prices that the industry will require to cover its costs. At the back of our minds has always been the need to make proper provision over a period of time, difficult though that is. That will incur costs, which the regulator will no doubt take into account when constructing his price formula. There will be no problem; that is the reason for the regulator's existence.

Given the regulation of the industry, the non-fossil fuel obligation and other protections for the industry which the Opposition have questioned, I do not feel that the hon. Gentleman's fears are well founded. I hope that the Opposition will feel able to withdraw their amendment and that the House will accept the Lords amendment.

Question put, That this House doth agree with the Lords in the said amendment:—

The House divided: Ayes 312, Noes 195.

Division No. 317][7.27 pm
Adley, RobertBudgen, Nicholas
Aitken, JonathanBurns, Simon
Alexander, RichardBurt, Alistair
Alison, Rt Hon MichaelButler, Chris
Allason, RupertButterfill, John
Amess, DavidCarlisle, John, (Luton N)
Amos, AlanCarlisle, Kenneth (Lincoln)
Arbuthnot, JamesCarrington, Matthew
Arnold, Jacques (Gravesham)Carttiss, Michael
Arnold, Tom (Hazel Grove)Cash, William
Ashby, DavidChapman, Sydney
Atkins, RobertChope, Christopher
Atkinson, DavidChurchill, Mr
Baker, Nicholas (Dorset N)Clark, Hon Alan (Plym'th S'n)
Baldry, TonyClark, Dr Michael (Rochford)
Banks, Robert (Harrogate)Clarke, Rt Hon K. (Rushcliffe)
Batiste, SpencerConway, Derek
Beaumont-Dark, AnthonyCoombs, Anthony (Wyre F'rest)
Bellingham, HenryCoombs, Simon (Swindon)
Bennett, Nicholas (Pembroke)Cope, Rt Hon John
Benyon, W.Cormack, Patrick
Bevan, David GilroyCouchman, James
Biften, Rt Hon JohnCran, James
Blackburn, Dr John G.Curry, David
Blaker, Rt Hon Sir PeterDavies, Q. (Stamf'd & Spald'g)
Bonsor, Sir NicholasDavis, David (Boothferry)
Boscawen, Hon RobertDay, Stephen
Boswell, TimDevlin, Tim
Bottomley, Mrs VirginiaDouglas-Hamilton, Lord James
Bowden, A (Brighton K'pto'n)Dover, Den
Bowden, Gerald (Dulwich)Dunn, Bob
Bowis, JohnDurant, Tony
Boyson, Rt Hon Dr Sir RhodesDykes, Hugh
Braine, Rt Hon Sir BernardEvans, David (Welwyn Hatf'd)
Brandon-Bravo, MartinFairbairn, Sir Nicholas
Brazier, JulianFallon, Michael
Bright, GrahamFavell, Tony
Brooke, Rt Hon PeterFenner, Dame Peggy
Brown, Michael (Brigg & Cl't's)Field, Barry (Isle of Wight)
Browne, John (Winchester)Fishburn, John Dudley
Bruce, Ian (Dorset South)Fookes, Dame Janet
Buck, Sir AntonyForman, Nigel
Forsyth, Michael (Stirling)Lester, Jim (Broxtowe)
Forth, EricLightbown, David
Fowler, Rt Hon NormanLilley, Peter
Fox, Sir MarcusLloyd, Sir Ian (Havant)
Franks, CecilLloyd, Peter (Fareham)
Freeman, RogerLord, Michael
French, DouglasLuce, Rt Hon Richard
Gale, RogerLyell, Sir Nicholas
Garel-Jones, TristanMcCrindle, Robert
Gill, ChristopherMacKay, Andrew (E Berkshire)
Glyn, Dr AlanMcLoughlin, Patrick
Goodhart, Sir PhilipMcNair-Wilson, Sir Michael
Goodlad, AlastairMcNair-Wilson, Sir Patrick
Goodson-Wickes, Dr CharlesMadel, David
Gorman, Mrs TeresaMalins, Humfrey
Gorst, JohnMaples, John
Gow, IanMarlow, Tony
Grant, Sir Anthony (CambsSW)Marshall, John (Hendon S)
Greenway, Harry (Eating N)Marshall, Michael (Arundel)
Greenway, John (Ryedale)Martin, David (Portsmouth S)
Gregory, ConalMates, Michael
Griffiths, Sir Eldon (Bury St E')Maude, Hon Francis
Griffiths, Peter (Portsmouth N)Mawhinney, Dr Brian
Ground, PatrickMaxwell-Hyslop, Robin
Gummer, Rt Hon John SelwynMayhew, Rt Hon Sir Patrick
Hague, WilliamMeyer, Sir Anthony
Hamilton, Neil (Tatton)Miller, Sir Hal
Hampson, Dr KeithMills, Iain
Hanley, JeremyMiscampbell, Norman
Hannam, JohnMitchell, Andrew (Gedling)
Hargreaves, A. (B'ham H'll Gr')Mitchell, Sir David
Hargreaves, Ken (Hyndburn)Moate, Roger
Harris, DavidMonro, Sir Hector
Haselhurst, AlanMontgomery, Sir Fergus
Hayes, JerryMoore, Rt Hon John
Hayhoe, Rt Hon Sir BarneyMorris, M (N'hampton S)
Heathcoat-Amory, DavidMorrison, Sir Charles
Heddle, JohnMorrison, Rt Hon P (Chester)
Hicks, Mrs Maureen (Wolv' NE)Moss, Malcolm
Hicks, Robert (Cornwall SE)Moynihan, Hon Colin
Higgins, Rt Hon Terence L.Mudd, David
Hill, JamesNeale, Gerrard
Hind, KennethNeedham, Richard
Hogg, Hon Douglas (Gr'th'm)Nelson, Anthony
Holt, RichardNewton, Rt Hon Tony
Hordern, Sir PeterNicholls, Patrick
Howard, MichaelNicholson, David (Taunton)
Howarth, Alan (Strat'd-on-A)Nicholson, Emma (Devon West)
Howarth, G. (Cannock & B'wd)Norris, Steve
Howell. Rt Hon David (G'dford)Onslow, Rt Hon Cranley
Howell, Ralph (North Norfolk)Oppenheim, Phillip
Hughes, Robert G. (Harrow W)Page, Richard
Hunt, David (Wirral W)Paice, James
Hunt, Sir John (Ravensbourne)Parkinson, Rt Hon Cecil
Hunter, AndrewPatnick, Irvine
Hurd, Rt Hon DouglasPatten, Rt Hon Chris (Bath)
Irvine, MichaelPatten, John (Oxford W)
Irving, CharlesPawsey, James
Jack, MichaelPeacock, Mrs Elizabeth
Jackson, RobertPorter, Barry (Wirral S)
Janman, TimPortillo, Michael
Jessel, TobyPowell, William (Corby)
Johnson Smith, Sir GeoffreyPrice, Sir David
Jones, Gwilym (Cardiff N)Raffan, Keith
Jones, Robert B (Herts W)Raison, Rt Hon Timothy
Jopling, Rt Hon MichaelRathbone, Tim
Kellett-Bowman, Dame ElaineRedwood, John
Key, RobertRenton, Tim
King, Roger (B'ham N'thfield)Rhodes James, Robert
Kirkhope, TimothyRiddick, Graham
Knapman, RogerRidley, Rt Hon Nicholas
Knight, Greg (Derby North)Ridsdale, Sir Julian
Knight, Dame Jill (Edgbaston)Rifkind, Rt Hon Malcolm
Knowles, MichaelRoe, Mrs Marion
Lamont, Rt Hon NormanRossi, Sir Hugh
Lang, IanRost, Peter
Latham, MichaelRowe, Andrew
Lawrence, IvanRumbold, Mrs Angela
Lee, John (Pendle)Sackville, Hon Tom
Lennox-Boyd, Hon MarkSayeed, Jonathan
Scott, Rt Hon NicholasThurnham, Peter
Shaw, David (Dover)Townend, John (Bridlington)
Shaw, Sir Giles (Pudsey)Townsend, Cyril D. (B'heath)
Shaw, Sir Michael (Scarb')Tracey, Richard
Shephard, Mrs G. (Norfolk SW)Tredinnick, David
Shepherd, Colin (Hereford)Trippier, David
Shersby, MichaelTrotter, Neville
Skeet, Sir TrevorTwinn, Dr Ian
Smith, Sir Dudley (Warwick)Vaughan, Sir Gerard
Smith, Tim (Beaconsfield)Waddington, Rt Hon David
Soames, Hon NicholasWakeham, Rt Hon John
Speed, KeithWaldegrave, Hon William
Speller, TonyWalden, George
Spicer, Sir Jim (Dorset W)Walker, Bill (T'side North)
Spicer, Michael (S Worcs)Waller, Gary
Squire, RobinWalters, Sir Dennis
Stanbrook, IvorWard, John
Stanley, Rt Hon Sir JohnWardle, Charles (Bexhill)
Stern, MichaelWarren, Kenneth
Stevens, LewisWells, Bowen
Stewart, Allan (Eastwood)Wheeler, John
Stewart, Andy (Sherwood)Whitney, Ray
Stewart, Rt Hon Ian (Herts N)Widdecombe, Ann
Stokes, Sir JohnWiggin, Jerry
Sumberg, DavidWilkinson, John
Summerson, HugoWinterton, Mrs Ann
Tapsell, Sir PeterWinterton, Nicholas
Taylor, Ian (Esher)Wolfson, Mark
Taylor, John M (Solihull)Wood, Timothy
Taylor, Teddy (S'end E)Woodcock, Dr. Mike
Tebbit, Rt Hon NormanYeo, Tim
Temple-Morris, PeterYoung, Sir George (Acton)
Thompson, D. (Calder Valley)
Thompson, Patrick (Norwich N)Tellers for the Ayes:
Thorne, NeilMr. David Maclean and Mr. Stephen Dorrell
Thornton, Malcolm
Abbott, Ms DianeColeman, Donald
Adams, Allen (Paisley N)Cook, Frank (Stockton N)
Allen, GrahamCook, Robin (Livingston)
Alton, DavidCorbett, Robin
Anderson, DonaldCorbyn, Jeremy
Archer, Rt Hon PeterCousins, Jim
Armstrong, HilaryCryer, Bob
Ashdown, Rt Hon PaddyCummings, John
Ashley, Rt Hon JackCunliffe, Lawrence
Ashton, JoeCunningham, Dr John
Banks, Tony (Newham NW)Darling, Alistair
Barnes, Harry (Derbyshire NE)Davies, Rt Hon Denzil (Llanelli)
Barnes, Mrs Rosie (Greenwich)Davies, Ron (Caerphilly)
Barron, KevinDavis, Terry (B'ham Hodge H'l)
Battle, JohnDewar, Donald
Beckett, MargaretDixon, Don
Beith, A. J.Dobson, Frank
Benn, Rt Hon TonyDoran, Frank
Bennett, A. F. (D'nt'n & R'dish)Duffy, A. E. P.
Bermingham, GeraldDunwoody, Hon Mrs Gwyneth
Bidwell, SydneyEadie, Alexander
Blair, TonyEastham, Ken
Boateng, PaulEwing, Harry (Falkirk E)
Boyes, RolandEwing, Mrs Margaret (Moray)
Bradley, KeithFatchett, Derek
Bray, Dr JeremyFearn, Ronald
Brown, Nicholas (Newcastle E)Fisher, Mark
Bruce, Malcolm (Gordon)Flannery, Martin
Buckley, George J.Flynn, Paul
Caborn, RichardFoster, Derek
Callaghan, JimFraser, John
Campbell, Menzies (Fife NE)Galloway, George
Campbell, Ron (Blyth Valley)Garrett, John (Norwich South)
Campbell-Savours, D. N.Garrett, Ted (Wallsend)
Canavan, DennisGilbert, Rt Hon Dr John
Cartwright, JohnGodman, Dr Norman A.
Clark, Dr David (S Shields)Golding, Mrs Llin
Clarke, Tom (Monklands W)Gordon, Mildred
Clay, BobGould, Bryan
Clelland, DavidGraham, Thomas
Clwyd, Mrs AnnGrant, Bernie (Tottenham)
Cohen, HarryGriffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)Orme, Rt Hon Stanley
Grocott, BrucePatchett, Terry
Hardy, PeterPendry, Tom
Hattersley, Rt Hon RoyPike, Peter L.
Haynes, FrankPrimarolo, Dawn
Healey, Rt Hon DenisQuin, Ms Joyce
Henderson, DougRadice, Giles
Hinchliffe, DavidRandall, Stuart
Hoey, Ms Kate (Vauxhall)Redmond, Martin
Hogg, N. (C'nauld & Kilsyth)Rees, Rt Hon Merlyn
Home Robertson, JohnRichardson, Jo
Howarth, George (Knowsley N)Roberts, Allan (Bootle)
Howell, Rt Hon D. (S'heath)Robinson, Geoffrey
Hoyle, DougRogers, Allan
Hughes, John (Coventry NE)Rooker, Jeff
Hughes, Robert (Aberdeen N)Ross, Ernie (Dundee W)
Hughes, Roy (Newport E)Rowlands, Ted
Illsley, EricRuddock, Joan
Ingram, AdamSalmond, Alex
Janner, GrevilleSedgemore, Brian
Johnston, Sir RussellSheldon, Rt Hon Robert
Jones, Barry (Alyn & Deeside)Shore, Rt Hon Peter
Jones, Martyn (Clwyd S W)Short, Clare
Kennedy, CharlesSkinner, Dennis
Kinnock, Rt Hon NeilSmith, Andrew (Oxford E)
Kirkwood, ArchySmith, C. (Isl'ton & F'bury)
Lamond, JamesSmith, Rt Hon J. (Monk'ds E)
Leighton, RonSmith, J. P. (Vale of Glam)
Lewis, TerrySoley, Clive
Litherland, RobertSpearing, Nigel
Lloyd, Tony (Stretford)Steinberg, Gerry
Lofthouse, GeoffreyStott, Roger
McAllion, JohnStraw, Jack
McAvoy, ThomasTaylor, Mrs Ann (Dewsbury)
McCartney, IanTaylor, Matthew (Truro)
Macdonald, Calum A.Thompson, Jack (Wansbeck)
McKay, Allen (Barnsley West)Turner, Dennis
McKelvey, WilliamVaz, Keith
McLeish, HenryWall, Pat
McWilliam, JohnWallace, James
Madden, MaxWalley, Joan
Mahon, Mrs AliceWardell, Gareth (Gower)
Marshall, Jim (Leicester S)Wareing, Robert N.
Martin, Michael J. (Springburn)Watson, Mike (Glasgow, C)
Meacher, MichaelWelsh, Andrew (Angus E)
Meale, AlanWelsh, Michael (Doncaster N)
Michael, AlunWilliams, Rt Hon Alan
Michie, Bill (Sheffield Heeley)Williams, Alan W. (Carm'then)
Mitchell, Austin (G't Grimsby)Wilson, Brian
Morgan, RhodriWinnick, David
Morris, Rt Hon A. (W'shawe)Wise, Mrs Audrey
Morris, Rt Hon J. (Aberavon)Worthington, Tony
Mowlam, MarjorieYoung, David (Bolton SE)
Mullin, Chris
Murphy, PaulTellers for the Noes:
Nellist, DaveMr. Jimmy Dunnachie and Mr. Ray Powell.
Oakes, Rt Hon Gordon
O'Brien, William

Question accordingly agreed to.

Lords amendments Nos. 159 to 162 agreed to. [Special entry.]

Lords amendment: No. 21, before clause 11, insert the following new clause—Licence conditions for nuclear installations—Where a person authorised to generate electricity under section 6(1)(a) above proposes to do so by means of nuclear fission, it shall be a condition of the licence that the Secretary of State may at any time if he perceives that there is a matter affecting the safety of the public by order requisition and bring under his own control the relevant nuclear installations.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I beg to move, That this House doth disagree with the Lords in the said amendment.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

With this it will be convenient to take Lords amendments Nos. 81 to 89 and the Government motions to disagree with each.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I understand, Mr Deputy Speaker, that it may be for the convenience of the House if we take with this group the following Lords amendments: No. 28, in clause 32, page 24, line 42, leave out from "with" to "and" in line 43 and insert the suppliers concerned, by order require each public electricity supplier in England and Wales or each supplier in Scotland, before a day specified in the order, to make (in so far as he has not already done so) Amendment (a) to the Lords amendment, leave out 'each such supplier in Scotland'. Nos. 29 to 35.

No. 36, in clause 33, page 26, line 21, after "above" insert in relation to public electricity suppliers in England and Wales, or public electricity suppliers in Scotland Amendment (a) to the Lords amendment, leave out 'or public electricity supplier in Scotland'. Amendments Nos. 37 to 50, 78 and 79.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Is that the wish of the House? That being so, the Minister may proceed.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

Amendments Nos. 28 to 79, dealing with the non-fossil fuel obligation and associated levy, are technical amendments. If any hon. Member has questions, I shall be happy to answer them, but if not, I shall leave the amendments to one side.

The first group of amendments deals with safety and seeks to provide that when a nuclear power station is defined as unsafe, its ownership and control should fall back into the hands of the Secretary of State. The main reason why the Government disagree with that is simple. Under the Nuclear Installations Act 1965, the nuclear installations inspectorate has powers to shut down nuclear power stations or to modify their licences. Indeed, should there be any question of their being unsafe, it has virtually unlimited powers over power stations and their operators. The obligation for safety placed on the operators within the general restrictions and safety conditions laid down by the inspectorate has served the country well, so the amendment is not necessary.

I do not want to make a debating point, but the Opposition are trying to suggest that we should take safety for North sea oil operations out of the hands of the Secretary of State whereas the other place at least supports the view that safety at nuclear installations should be in the hands of the Secretary of State. It will be interesting to see whether the Opposition can solve that conundrum.

Both sides of the House agree that the present legislation is tight on safety. The Bill further strengthens the safety provisions relating to the regulator. We have had a debate on that subject and the Government have brought forward amendments to that effect. We agree about the paramountcy and importance of safety, but the Bill provides a regime to ensure that safety provisions will be complied with.

Photo of Mr Rhodri Morgan Mr Rhodri Morgan , Cardiff West 7:45 pm, 24th July 1989

We are in something akin to uncharted waters this evening, in more ways than one. First, we seem to be operating in a Minister-free zone. I have some sympathy for the departing Secretary of State and his Under-Secretary of State, who were near to ascending their own parliamentary Everest. Just before they reached the summit, the Secretary of State, at least, seems to have slid back to South Col on his backside. Since then, he seems to have found a convenient bus operating from South Col back to Katmandu. His future parliamentary survival may depend on him seeing what he can do to live down the consequences of his announcement earlier today that Magnox stations would be left out of the Bill at the last minute of its parliamentary consideration.

There is a further reason why we are in uncharted waters. The Secretary of State told the House at 4.30 pm that Magnox stations should be taken out of the privatisation process and brought back into the public sector, because that was the only way to protect potential investors. Now the Minister is telling the House, at 7.50 pm, that for reasons of public safety he is not willing to consider bringing nuclear power stations back into the public sector. He is willing to strengthen protection for private investors, but he wants to weaken protection for public safety. That is an extraordinary contradiction. It may even he the ultimate statement of what the Government are about. They do not care as much about public safety as they do about the safety of the privatisation process, and the advice that they receive from merchant banks on the electricity industry ranks higher than any other.

Lords amendment No. 21 makes it clear that, should there be any doubts about the public safety of nuclear power stations, the Secretary of State would have the right to draw them back into the public sector, if they had already been privatised. I assume that that is confined to AGRs and PWRs. Even after today's announcement, we have no details about that and there could still be an element of privatisation. For that reason, I shall speak as though Magnox stations could be privatised on a sale-and-leaseback procedure. That has by no means been excluded by the Secretary of State's extraordinarily vague announcement. That is another reason why we are in uncharted waters.

It is all very well for the Minister to tell the House, as he did two minutes ago, that we have well-established procedures for dealing with safety issues on the nuclear side of the electricity generating industry. No one has more regard for the inspectors and employees of the nuclear installations inspectorate than the Opposition Front Bench. We hold Eddie Ryder and his staff in the highest regard, but several relatively new factors tend to undermine one's confidence in the bland assurances given by the Under-Secretary of State a couple of moments ago.

We know from the nuclear installations inspectorate itself that it is seriously under-staffed. It would like a very much larger complement because it will have to deal with a much wider range of problems in future. It will be dealing with three separate nuclear installations technologies—Magnox, AGRs and, before long, PWRs—which it has never had to do before. It will also be dealing with a whole new ball game because of the number of stations being decommissioned. It looks as though the inspectorate may even have to deal with three separate companies, although that is not necessarily so. Clearly, it will have to deal with the nuclear divisions of National Power and the SSEB and it now seems possible that we shall have some sort of cross-border dog's dinner of a nuclear company to deal with Magnox in its declining years until Wylfa is decommissioned in 2001 or 2002, so the NII may be having to deal with three separate management teams.

The Minister argues that there is no need to worry because we have the NII, whose terms of reference are clear—that the NII licences the operators and the types and that that means that we in Britain have a much better system than other countries and that no problems can arise. As I said, no one could have more regard than the Opposition for the staff of the NII and their dedication to their duties, but the fact remains that they will be facing new problems.

Take the decommissioning of the Magnox stations. The staff of the NII take the view that with the present complement the inspectorate will have its hands full simply dealing with the annual reports for the Magnox statio:ns. It will be almost a full-time job. In addition, the NII will have to consider for the first time the licensing of the operating side of PWRs when the construction phase of Sizewell B is eventually completed in about 1992. In the light of those new problems, the Minister's bland assurances are inadequate.

When the Magnox stations are running down, a whole new series of safety problems will arise. Let me give this idea to the Minister to chew over in case his mind is turning to other matters—such as whether he will be here tomorrow. As Magnox stations fall in temperature, they produce weapons-grade plutonium, rather than civil-grade plutonium. A whole new series of protective measures may be required to cover that accidental by-product of the running down of Magnox stations. The nuclear installations inspectorate and other international inspectorates may well take a great deal of interest in that unintended side effect.

In terms of public safety questions such as terrorist attack or theft of plutonium stocks, the decommissioning of Magnox will give rise to a whole new series of questions. We have never had to deal with such questions before because we have never decommissioned stations before, whereas now a whole series of Magnox stations are to go out of business over the next 13 years, until the Magnox problem is behind us.

For those reasons Opposition Members have a great deal of sympathy with the Lords amendments. The Government may say, "We have solved that problem ourselves by taking the Magnox stations out of the privatisation process and keeping them in the public sector. And if they are in the public sector already we do not need the power to take them out of the private sector." We need an assurance from the Minister that the Magnox stations will not enter the private sector by way of sale-and-leaseback arrangements because the Secretary of State was extremely vague on this issue in his statement earlier today. He gave us no idea what form the company would take—perhaps another Secretary of State will have to handle that particular hot potato—and until we know that, we must assume that there is a possibility that the privatised nuclear power industry will include at least the management of the Magnox stations. In that case the provisions of Lords amendment No. 21 would need to apply to Magnox stations as well as to AGRs and PWRs.

Even if we assume that the Magnox stations stay in the hands of a state nuclear corporation—being incorporated with BNFL, being placed in the hands of a separate Crown nuclear company or remaining in legislative limbo—we must still ask whether the state should have the right to reacquire ownership of AGRs if a public safety threat such as a military, terrorist or type-fault threat arose. Given all the criticisms that have been made about AGRs, that possibility cannot be excluded. Should the Government have an easy route to reacquire the stations on public safety grounds or should we have to go through the whole dreary process of introducing legislation to transfer the industry from private to public?

We have much sympathy with the Lords amendment because we believe that the Lords took a long-term view. The public have a great many doubts about how they will live with the nuclear industry. For example, we know that one could never build a nuclear power station on a green field site in this country following the public inquiry process. One can build new nuclear power stations where there are already nuclear power stations because there is a nuclear vested interest in those areas. But if the public had known in the late 1950s and early 1960s what they now know about nuclear power, the existing sites would never have been set up, and that vested interest would never have arisen.

The Lords have sought to reflect the fact that, given the choice, no one would allow a nuclear power station to be built in his area. The public do not want to live in close proximity to nuclear power stations. That is also true in other countries, the possible exception being France.

The public would undoubtedly be greatly reassured if the Government embraced the spirit of the Lords amendment and said, "We understand how you feel about nuclear power and how you were conned into accepting nuclear back in the late 1950s," acknowledging that nuclear power was our weapon to defend ourselves against being exploited by high oil prices and that to be able to construct nuclear power stations was the macho symbol of technologically advanced civilisations. All those assumptions proved hopelessly inaccurate, but they were sufficient to persuade the public to accept nuclear power stations.

The Government must think seriously about how to reassure the public that in a privatised electricity industry public safety will be given the highest priority. We know that once the industry is privatised we shall have a jungle out there. We know that the public believe that in the jungle of a privatised industry corners will be cut. The Minister asked earlier where the estimate of £8 billion for decommissioning Magnox stations came from. I recall that Phillips and Drew the stockbrokers, who are under something of a cloud at present in relation to an entirely different matter, suggested that the possible cost would be £12 billion. That firm was assisting the Government in preparing reasonable estimates of the real cost of nuclear power and said that the decommissioning of Magnox would cost £4 billion if it were done over a century but that that could rise to £12 billion if it were done at the most rapid practicable rate—the rate at which the Swedish Government have told their industry to decommission.

The British Government may wish to choose a similar regime. The public might want them to make that choice rather than having huge concrete domes all over the countryside. The public suspect that in a privatised nuclear industry management will say, "We cannot possibly afford that; we cannot do it; we shall go bust if you force us to do it." What is the answer to that?

The public are crying out for reassurance about the safety of living next door to sources of radiation while the interests of investors and shareholders are pulling the other way. We want to know which way the Government will go. The public would like to see the spirit of Lords amendment No. 2 incorporated in the Bill.

The prime purpose of the Bill must be to reassure the public. Whatever the ideologies of hon. Members, the operation of the industry must be safe and electricity supply must be secure. The Bill's prime purpose cannot be simply to give potential investors a risk-free ride when they have a punt on the pylons and power stations.

In that spirit of asking the Government to reassure the public about the safety of nuclear power stations, I ask them to think again and move to the spirit of Lords amendment No. 21.

8 pm

Photo of Malcolm Bruce Malcolm Bruce , Gordon

I support the general thrust of the comments of the hon. Member for Cardiff, West (Mr. Morgan). There are currently so many question marks over nuclear power that it should not move out of the public sector. It certainly should not move from the public sector when its monitoring, safety and emergency provisions have been exposed as underdeveloped. In Committee, we touched on such matters and gave examples to reinforce our argument.

The general attitude to the level of acceptability of radiation doses has changed dramatically over the years. We have moved from a feeling that any radiation was likely to be damaging, through a belief that quite high doses could be tolerated, to the current belief that we cannot accept the present dosages. The industry is about to be privatised when a public debate is going on about whether the acceptable levels of exposure to radiation are low enough.

In the 1950s, the dose limit for workers in the industry was set at 150 mSv, but it was reduced to 50 mSv in 1977, the last time that there was a specific change. The National Radiological Protection Board believes that much lower levels should operate, and has suggested 0·5 or 0·2 mSv. Seven per cent. of employees at Sellafield have received doses of almost 50 mSv. People involved in decommissioning and reprocessing are particularly vulnerable to high doses. If the processes of reprocessing or decommissioning make it impossible for humans to do them because safety levels have fallen below what is acceptable, what will that mean for reprocessing, decommissioning or the private sector nuclear industry? The amendment at least ensures that the Government have at their disposal, at any time, the right to intervene and to say, "We are not satisfied that sufficiently high standards are being applied, so we propose to take direct responsibility."

In Committee, I referred to emergency evacuation procedures for nuclear power stations. It is little short of a scandal that we still have no published, workable or known evacuation procedures for people within the vicinity of nuclear power stations, despite many requests for one by the Association of Planning Officers. Information is not available to local general practitioners about the effect of discharge of radiation on workers or people in the vicinity of a nuclear power station, although they have tried to secure such information several times.

The industry is being privatised, despite the fact that we know that major accidents can happen, and have happened. We have a moving position on safety and the possibility that, in an emergency, responsible local authorities and the public within the vicinity of a nuclear power station would not know what was expected of them. That example determines that the amendment is necessary to ensure that safety factors are taken into account.

The House should not allow the Government to be complacent about this industry, of all industries. It is a regrettable fact that the commercial climate created by the Government of the maximisation of profit and the allowance of commercial interests with the maximum deregulation has already led to major disasters in the private sector. I do not need to catalogue them, because we are all aware of them and because they have been referred to all too often in debates.

Do the Government want to put alongside Zeebrugge, Clapham or Lockerbie a Hinkley Point or a Dungeness B because they chose to privatise the industry with inadequate safeguards? I believe that that is what they are proposing. I believe that that is what their Lordships thought, and that is the reason for the amendment. It is regrettable that the Government do not appear to have learnt from the savage incidents that have occurred. The consequences for the nuclear power industry of the pursuit of profit and the compromise of safety standards that might occur as a result would be more far-reaching than the other disasters to which I have referred.

I should like to question the implications of the non-fossil fuel levy for Scotland, which is why by I tabled two probing amendments. Scotland has substantial overcapacity in all electrical power generation, predominantly because of excessive investment in nuclear power stations. I suggested in Committee that, to reduce that over-capacity, the ownership of Torness should be transferred to National Power, thereby releasing some of the excess capacity in Scotland. That is not an ideal solution, because Torness should never have been built, but given that it exists and is operating, and given that under the Bill nuclear capacity is to be contracted to a percentage under the non-fossil fuel levy, it appears that it could make a contribution.

I ask the Minister to say whether the Government have any thoughts on when and if the non-fossil fuel levy will be applied to Scotland. It has been suggested that eventually it might, but will a different level apply? Perhaps more pertinent, it is important to impress on the Minister that the way in which nuclear power capacity is being forced on the industry is continuing to depress and prejudice the interests of alternative non-fossil fuel sources of electricity.

Will the Minister comment on reports that have appeared in the press over the past few days that the French believe they can meet the target that the Government have set of 600 MW of alternative non-fossil fuel sources from their hydro facilities? Understandably, the Government share my suspicions that that would be a way of offloading their extra nuclear capacity. When one switches on a light, it is difficult to know what system of generation has produced the power that results. This is an important issue and the Government could have set themselves a much higher standard than their 600 MW objective.

It remains a matter of concern to me—I repeat it only at its face value—that Scotland probably has the best potential of any part of the United Kingdom for developing substantial renewable energy. That is in no way to underplay what can be achieved in other parts of the United Kingdom, but, according to independent studies, our wind profile is better than that of Denmark and we therefore have the potential to secure a substantial amount of energy from wind power. The Norwegians are pressing ahead with wave power, and Scotland too has appropriate sites to develop that source of energy successfully.

However, the chances of those alternative sources of energy being developed are much reduced by the fact that Scotland has massive extra capacity, most of it nuclear. That would seem to pre-empt significant amounts of investment in Scotland. I know that the Minister will say that certain things are happening—I am aware of them—but they are very small and I cannot see that significant commercial developments will result from them.

In any case, upgrading the interconnector is absolutely crucial if Scotland is to offload its capacity. That brings me to the crunch question for Scotland, to which I do not believe that the Government can give any answer. The method of calculating prices means that prices in Scotland will be based on the average rather than on Scotland's costs. The consequence of that will inevitably ensure that my constituents in the north of Scotland, who currently enjoy the lowest unit price of electricity in the country—and need to, given where they live—will find themselves rising rapidly up the scale of charges as a direct result of this privatisation.

On top of that, if the Scottish boards find difficulty contracting the sale of their nuclear-powered electricity, it seems that Scottish consumers, as well as Scottish shareholders, will be stuck with a capacity that they cannot sell and with a debt that they still have to service. The consequences could be disastrous for Scottish consumers. Whatever the perception of the Bill in England and Wales—and wherever one goes, the Bill is opposed by the majority of people—I have no doubt that the opposition to it in Scotland is more substantial, basically because in this legislation the Government are refusing to acknowledge the different structure, traditions and history of electricial generation in Scotland. The Government have lumped all the provisions into a global Bill with the consequence that Scottish interests—and the differences in the mix, the organisation and structure of the industry in Scotland—have not been taken into account.

That is why I have tabled amendments to take references to Scotland out of the provisions. I admit that they are probing amendments, but they are based on the premise that, as we reach the end of the Bill's passage through Parliament, it is apparent that it is bad news for the United Kingdom, but very bad news for Scotland. That probably means that it will be bad news for the Government in the polls in England, and very bad news for them in Scotland, but they have become used to that and perhaps after the next election there will be no Tory Members left in Scotland to bring back the reports of what happened.

However, that is as may be. My conclusions are simply that the non-fossil fuel levy and the safety issues are serious considerations, that the Lords amendments improve the Bill, and that it is regrettable that the Government are trying to reverse them.

Photo of Ian McCartney Ian McCartney , Makerfield

In our Committee discussions on nuclear safety, those of us who have been involved in local government and in the preparation of plans relating to the nuclear industry argued for a bipartisan policy on this matter. Irrespective of whether one is pro or anti-nuclear, or pro or anti-privatisation, one must agree that it is essential to the nation's security that we come up with an acceptable and workable set of proposals not only for on-site, but also for off-site emergency planning measures for nuclear installations.

In Committee, in the Lords and again this evening, the tragedy has been the Government's unwillingness to accept a bipartisan approach to nuclear safety and to the development of off-site and on-site plans. In these privatisation proposals, the Government have missed a real opportunity to look at what has happened during the past decade between the nuclear industry and the emergency planning officers in local government, both at county level and at fire and civil authority level. All of us who have been involved in this issue over that period accept the need to resolve the inadequate relationship between planning officers and the nuclear industry as it currently stands.

8.15 pm

In Committee, the Minister went some way to accepting the need for a radical change in the current position in relation to on-site, but especially to off-site, emergency planning. He acknowledged that by saying that it was the Government's intention to bring forward proposals similar to those that are currently operating in industry for large-scale petrochemical plants and for other industrial processes that can cause difficulties and accidents. However, he did not go on to accept the current inadequacies of our off-site emergency planning procedures in terms of the ability of local authority emergency planning departments to sit down in consultation with the nuclear industry and with those in the community who live close to a nuclear plant and to come up with proposals to improve the existing position.

It is because of the inability and the lack of willingness on the part of the nuclear industry in the past decade to take local communities and emergency planning departments into its confidence that in the past few years local authorities and, through their professional bodies, the planning officers, have attempted to initiate new plans and proposals to upgrade and modernise off-site emergency planning activities. That has included a number of table top exercises, paid for by local authorities, which looked at the current position in the industry and the likely response from the local community in the event of varying scenarios of nuclear incidents.

Each time, the exercises showed the inadequacies of the development of off-site plans in all regions, whether in the north-west, the south-west, Scotland or anywhere else with a nuclear installation. All such table top exercises have shown up the glaring anomalies and the lack of accountability of the nuclear industry. They have also shown the lack of an adequate relationship between the industry and those responsible for the development of local off-site emergency plans.

Therefore, although the Minister will not accept any of the amendments that have been tabled and will attempt to eradicate those from another place, I hope that he will accept, irrespective of his personal views and his political animosity towards Opposition Members, that we should come to a bipartisan approach to off-site emergency planning.

In Committee, both I and my hon. Friend the Member for Carmarthen (Mr. Williams) spent a great deal of time over several days dealing with amendments and general discussions in clause stand part debates trying to set out a framework and structure for the type of amendments that would be required if there were to be any meaningful relationship and public accountability for off-site emergency planning or public involvement through emergency planning departments and officers.

Despite promptings from me and other hon. Members to come to see what was happening at local authority level, Ministers still insisted that the Government totally accepted the current position, and that there was no need for any major changes. However, that is flying against all international views on this and against the advice that is currently being given to the Government by the chief emergency planning officers and their professional bodies.

The Government are still refusing to amend their proposals on "reference accident"—although the International Atomic Energy Agency sees the reference accident scenario as inadequate under the current proposals. The reference accident is based on analyses of possible failures of components and systems, and fails to take into account that accidents that have happened overseas in the nuclear industry have not been because of a failure in the fail-safe component systems, but have been mainly through human error, especially those at Three Mile Island and Chernobyl. The Government's proposals do not take account of on-site and emergency planning for such human errors and the accident that would flow from a major disaster involving the culpability of people working in installations.

Experience also shows that site operators fail to provide efficient on-site and off-site plans. It is therefore an absolute necessity that the Government proposals should bring about a system whereby the nuclear industry would sit down and work out in consultation with emergency planning departments a comprehensive plan for each nuclear installation, whether in the public or private sector. It is important, too, that we have a proper system of notification in the development of such plans to ensure the involvement of local communities and community organisations.

I shall quote from a recent report prepared by the chief emergency planning officers' professional body, which I believe the Minister has seen. Perhaps he will tell us tonight whether he is prepared to accept the report's recommendations. It states: Nuclear installations should come under similar legislation to other industrial major hazard sites in that the operator should be required to engage County Authorities in producing the off-site plan for which the operator would pay. The operator would then have a duty to provide information to the public about the activities of the site and the appropriate counter measures to take in the event of an accident in response to an agreed warning system and the management of an off-site emergency plan would be in the hands of the Civil Authorities and not in the hands of a nuclear industry as it currently stands.

It is important, therefore, that the Minister does not simply reject the Lords amendment, or reject out of hand the Opposition's proposals, but that he comes up with a positive response to the genuine fears not just of politicians but of people in the community, community leaders and emergency planning officers, who have had experience of emergency procedures in, for example, the armed services, the Home Office and other Government Departments. None of them has been appointed because of a political allegiance to any particular party or policy on nuclear matters. They are appointed because of their experience and qualifications on emergency planning matters. When people with such experience and understanding of the situation tell the Government that the current position is inadequate, the Government should respond positively to their proposals.

In the recommendations for change, the Government should accept the abandonment of the reference accident as a basis for plans. They should accept an increase in the minimum emergency planning zone from 3 km to 10 km, two further planning zones of 25 km and 100 km, and an automated and extensive warning system should be established, coupled to a pre-arranged local radio station for the transmission of emergency information. There should be a legal requirement for county-level authorities to prepare and maintain composite off-site plans and for the site operator's role in the off-site emergency responses to be curtailed, and the responsibility for setting up the off site operational support centres and implementing counter-measures should pass ultimately to the police.

We require the development of a mutual aid agreement between adjacent counties, because we have seen in Three Mile Island and in Chernobyl that accidents are not just contained within a region or a sub-region, but can cover the globe and create a European scenario or, in the United States, affect a whole state. It is important, therefore, that off-site emergency plans are not just developed for the immediate hinterland around an installation, but are co-ordinated regionally and ultimately at a national level. That must mean the creation of a national disaster unit, which would co-ordinate emergency responses at a national level. There would be an emergency planning inspectorate to evaluate all areas of emergency planning and to possess the power to withhold site licences for those operators whose off-site plans are not of the required standard.

Those are the minimum requirements and they are well within the grasp of the Government if they are prepared to take a non-party political view and to accept that the priority should not be to ensure that the industry is sweetened up for privatisation by downgrading and keeping to a minimum the basic measures needed for emergency planning. That is in the interests of no one, and especially is not in the interests of the industry.

One of the problems that has bedevilled the nuclear industry over the past decade, and still continues to do so, is people's unwillingness to accept the industry's assurances about its safety record. One thing that the industry could do to help itself, and that the Government could do to help the industry if they are interested in promoting nuclear power, is to give the public and the bodies that represent the public the opportunity to have a real say in the development of off-site emergency plans. Unless the Government give such a commitment and the resources to do it, there will still be public scepticism and fear about the nature of the emergency plans, their adequacy and who would control them if there was an accident.

I hope that the Minister will for once be positive in this matter and accept that the Opposition have some good ideas and some common-sense views about the development of such plans. Perhaps, if there was some co-operation between us, the fears that many people have about the nuclear industry and of a nuclear accident would, while not being completely ameliorated, be calmed, and for once, during the lifetime of the nuclear industry, the general public and local authorities would be involved in a real sense in the development of emergency plans, and their structure and criteria would be established in an effective and efficient manner.

Photo of Dr Alan Williams Dr Alan Williams , Carmarthen

I address my comments to Lords amendment No. 21, which is a simple one. It gives the Secretary of State the power to take over a nuclear power station on grounds of safety whenever there might be a serious incident. In nuclear power, accidents do happen. There was a time when the nuclear industry used to claim that there were so many fail-safe systems that a serious accident could never happen—it was, for example, one every 1,000 million reactor years.

Then, in 1979, came the accident at Three Mile Island, when a pressurised water reactor came to within one hour of meltdown and, in 1986, there was Chernobyl, when a reactor went completely out of control. It burned furiously for two weeks or more and spilled out 5 per cent. of its radioactive content. That led to the evacuation of almost 100,000 people and the declaration of a zone 30 km around the reactor as uninhabitable. I read recently that more villages have just been evacuated in that area. The fallout went north of Chernobyl, and it is clear now that the soil and the food that is grown there are contaminated. They have therefore had to evacuate a further 25 villages.

Now, post-Chernobyl, they are finding deformities in animals, an increase in ill-health, thyroid problems among children and a doubling in the incidents of cancers to the lip and mouth. That shows that, when there is a major nuclear accident at a reactor, it can be disastrous. The cost of Chernobyl was conservatively estimated at £5 billion. The Government have argued that such accidents could not occur with our reactors, but that is transparent nonsense, as our reactors could fail just as disastrously.

I am pleased that, as a result of the statement, the Government have decided not to privatise the Magnox power stations, because those reactors are clapped out and, at any time, one of them could fail disastrously. I wish that the Government were not going to privatise the AGRs, PWRs or any other part of the electricity industry. At the Hinkley inquiry, the CEGB has now conceded that the newly designed PWRs could suffer a meltdown. It would be in such circumstances that we want the Secretary of State to have the power to take over a nuclear power station.

8.30 pm

I am aware that clause 92 gives the Secretary of State some power to give directions for the purpose of preserving the security of buildings". That wording is extremely vague. The Minister spoke. about the nuclear installations inspectorate and its powers. We are well aware of those powers, but the NII is incredibly under-staffed, to which my hon. Friend the Member for Cardiff, West (Mr. Morgan) has already drawn attention. It is a national scandal that the NII, in common with all anti-pollution inspectorates, is understaffed. If a serious accident on the scale of Three Mile Island or Chernobyl were to occur, the NII would have insufficient powers to rescue us.

The public are genuinely worried about nuclear safety; perhaps that is the No. 1 reason why the public are so anti-nuclear. That concern is already felt about an industry that is in public control, but once that industry passes into private hands that concern will grow. There will be great concern about privatised PWRs that will be able to produce 1,000 MW or 1,200 MW, the largest capacity in the world.

The new clause proposed in Lords amendment No. 21 would give the Secretary of State a reserve power, which we hope that he would never have to exercise. If there were a major incident, the Secretary of State, as the public would want, could take over a nuclear installation. It is a long-stop amendment, as we hope that that power would never be needed.

If there was a major incident, chaos and confusion would reign. That is what happened at Chernobyl and that was our Government's reaction to that accident. The Lords amendment would give the Government the power to intervene and to tell the people that it was their responsibility to take over a particular installation rather than to act as passive bystanders.

The Government should accept the sensible amendment, as it would give the Secretary of State an absolute right to take over a nuclear installation in the interests of public safety.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

My hon. Friends the Members for Makerfield (Mr. McCartney) and for Carmarthen (Mr. Williams) have made good contributions and, although their comments may have been somewhat wide of the amendment, the Government should take on board what they have said about emergency planning.

My hon. Friend the Member for Carmarthen was right to say that Lords amendment No. 21 is a long-stop amendment for the Secretary of State. We all hope that he would never have to use the power, but as the other place said, that power is a response to the fears that have been expressed by many of our constituents about nuclear power. More important, it reflects the fears held by many about the nuclear power industry being transferred to the private sector, especially as the private sector has not had a brilliant record in many sectors.

It may be argued that the Secretary of State has control over institutions such as the NII and that, therefore, there is no need for the Government to accept the amendment, despite its inoffensiveness. My hon. Friends have already demonstrated, however, that the NII is currently under-staffed. Until that is put right to the satisfaction of the inspectorate and everyone else, no one can be too happy.

The Minister said that amendment No. 28 and the other amendments in relation to the non-fossil-fuel levy were technical amendments. That is probably right as those amendments take up two and a half pages to amend two pages of the Bill covering clauses 32 and 33. Technical amendments of such length have been introduced on Report on all manner of Bills; they are symptomatic of this Bill and of the Government. Somewhere deep-seated in No. 10 we have a policy unit that devises schemes to move things out of the public sector into the private sector. The maxim is: public sector bad; private sector good.

Here we have two and a half pages of amendments to cover just three pages of the Bill that we discussed in December on Second Reading. Those two and a half pages relate to perhaps the most dogmatic part of the Bill, the Government's action to ring-fence the nuclear electricity industry as opposed to any other part of it. That action distorts the competition in the Bill, the very competition that we are told is the main reason for the Government to privatise the electricity supply industry.

Today, we have heard the bugles of retreat sound in relation to some of that ring-fencing as the Magnox stations will no longer be part of the private sector, because they are unsustainable. It appears that, although everyone else failed to convince the Government of that, the sounds from the City in the past few days did so.

It is ironic that the only good thing to come out of clause 32 and the ring-fencing is that the Government have given a slight commitment to sources of renewable energy, something that has been largely forgotten for the past 10 years. It now appears that sources of renewable energy may be given a lifeline because of the non-fossil-fuel obligation to which suppliers will be bound.

Hon. Members on both sides of the Chamber argued that combined heat and power should also be considered in relation to renewable sources of energy. That request was rejected in our earlier discussion of the Lords amendments. It was sad that, during the course of those very debates, the combined heat and power scheme put together by Leicester city council and a private consortium collapsed. It was intended that that scheme would lead the way in combined heat and power, but it collapsed because it was not allowed access to the grid. It believed that the East Midlands electricity board was operating its old cartel to keep out small and new producers.

Although we shall not divide the House on the non-fossil fuel levy, we should take this last chance to remind people who are reading our debates and who look with interest to the outcome of electricity privatisation how distorted the Bill is from beginning to end. The non-fossil fuel levy and the events of the past few hours in the Chamber have shown this legislation to be nothing more than an ideological attack on the public sector. It has been ill-thought out and in years to come we shall find that it will make electricity, which was once easy to come by, more difficult to get hold of and more expensive when it arrives.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

With the leave of the House, I wish to answer one or two of the questions that have been asked.

The hon. Member for Cardiff, West (Mr. Morgan) asked whether leaving Magnox stations in the public sector would affect the safety regime; the hon. Member for Carmarthen (Mr. Williams) asked the same question. The structure of the industry has no bearing on the safety regime, which will be controlled by legislation that is already on the statute book. The operator is responsible for safety, under the command and control structure of the nuclear installations inspectorate.

In this context, the hon. Member for Cardiff, West perfectly properly asked—as did the hon. Member for Rother Valley (Mr. Barron)—whether NII staffing would be adequate for the future of the industry. NII staff numbers have been significantly increased lately. We entirely agree that the inspectorate's staffing must be adequate, and I assure the House that it will be adequate to meet the NII's responsibilities.

There were 120 inspectors at 1 April 1988, and the inspectorate has the authority to increase their number by 33 per cent., to 160 inspectors, by 1 April 1990. We shall discuss all aspects of the new arrangements, including staffing requirements, with the NH to ensure that high standards are maintained in the industry. We agree with the Opposition about that and I hope that they are reassured by what I have said.

Photo of Mr Rhodri Morgan Mr Rhodri Morgan , Cardiff West

Considering the new questions that now face the NII when determining, almost on a six-monthly basis, whether this or that Magnox station can safely continue operating, and, if so, what work must be done on it before it can be approved, is the increase of 40 in the approved establishment, for which the Government say they are willing to pay, what the NII has asked for to meet its responsibilities, which have been increased by the changed circumstances of the industry; or is that some lower figure?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

There is no change as regards safety. The Magnoxes are reaching the end of their working lives. Questions of safety relating to those stations arise under present structures, which have not changed. The resources will be provided so that the NII can carry out its statutory responsibilities.

There may be some qualification in this context: the NII cannot ask for excessive resources, but, like the Opposition, we want to ensure that the industry continues to be as safe in the future as it has been in the past. The NII is the instrument to achieve that, so it stands to reason that it must have adequate resources. We are at one with the Opposition on that.

The hon. Members for Makerfield (Mr. McCartney) and for Gordon (Mr. Bruce) asked about emergency procedures which, as they acknowledged, we discussed at some length in Committee. Matters have moved on, to the extent that it was recently announced that new health and safety regulations are to be made under the Health and Safety at Work etc. Act 1974. The regulations will place a formal requirement on local authorities to prepare integrated off-site plans for nuclear installations similar to those in the control of industrial major accident hazard regulations—the CIMAH regulations—which now cover the chemical industry. That would put on a statutory footing arrangements for emergency procedures which already exist. I hope that that announcement answers the arguments advanced by the hon. Member for Makerfield and by other hon. Members.

The hon. Member for Gordon raised one or two points about Scotland—most pertinently, about the non-fossil fuel obligation. The reason why that obligation does not exist in Scotland is the high level of non-fossil fuel generating capacity there. That capacity makes the obligation unnecessary for the foreseeable future.

The hon. Member for Gordon went on to ask whether there would be some form of average pricing arrangements which would not put the same sort of commercial pressures—in the best sense of the word—on the industry in Scotland as are to be found elsewhere. The Nuclear Company in Scotland will be subject to regulation, and specifically subject to the need for transparent accounts and dealings. The regulator will be able to take a firm and direct view of whether the efficiency that he requires is present in the system.

The hon. Member for Gordon also asked about renewables and about the non-fossil fuel obligation applying to France. He was right to say that we have set a special tranche of 600 MW for renewables, although they can also compete within the general non-fossil fuel obligation. To some extent, that is a movable feast, capable of revision in the future. Should there be a massive under-provision for renewable capacity—in the context of the obligation for renewables—it would be open to the Government of the day to increase that tranche. That has been allowed for. So there is nothing final about this. the tranche, at 600 MW, looks about right in terms of a special arrangement within the overall NFFO for renewable.

In the light of those remarks, I hope that the House will feel able to agree with us and to move on to the next debate.

Question put, That this House doth disagree with the Lords in the said amendment:—

The House divided: Ayes 291, Noes 190.

Division 318][8.48 pm
Adley, RobertCurry, David
Alexander, RichardDavies, Q. (Stamf'd & Spald'g)
Alison, Rt Hon MichaelDavis, David (Boothferry)
Allason, RupertDay, Stephen
Amess, DavidDevlin, Tim
Amos, AlanDorrell, Stephen
Arbuthnot, JamesDouglas-Hamilton, Lord James
Arnold, Jacques (Gravesham)Dover, Den
Arnold, Tom (Hazel Grove)Dunn, Bob
Ashby, DavidDurant, Tony
Atkins, RobertEvans, David (Welwyn Hatf'd)
Atkinson, DavidFairbairn, Sir Nicholas
Baker, Nicholas (Dorset N)Fallon, Michael
Banks, Robert (Harrogate)Favell, Tony
Batiste, SpencerFenner, Dame Peggy
Beaumont-Dark, AnthonyField, Barry (Isle of Wight)
Bellingham, HenryFishburn, John Dudley
Bendall, VivianFookes, Dame Janet
Bennett, Nicholas (Pembroke)Forman, Nigel
Benyon, W.Forsyth, Michael (Stirling)
Bevan, David GilroyForth, Eric
Biffen, Rt Hon JohnFowler, Rt Hon Norman
Blackburn, Dr John G.Fox, Sir Marcus
Boscawen, Hon RobertFranks, Cecil
Boswell, TimFreeman, Roger
Bottomley, Mrs VirginiaFrench, Douglas
Bowden, A (Brighton K'pto'n)Gale, Roger
Bowis, JohnGardiner, George
Boyson, Rt Hon Dr Sir RhodesGarel-Jones, Tristan
Brandon-Bravo, MartinGill, Christopher
Brazier, JulianGlyn, Dr Alan
Bright, GrahamGoodlad, Alastair
Brooke, Rt Hon PeterGoodson-Wickes, Dr Charles
Brown, Michael (Brigg & Cl't's)Gorman, Mrs Teresa
Browne, John (Winchester)Gorst, John
Bruce, Ian (Dorset South)Grant, Sir Anthony (CambsSW)
Budgen, NicholasGreenway, Harry (Ealing N)
Burns, SimonGreenway, John (Ryedale)
Burt, AlistairGregory, Conal
Butler, ChrisGriffiths, Sir Eldon (Bury St E')
Butterfill, JohnGriffiths, Peter (Portsmouth N)
Carlisle, John, (Luton N)Ground, Patrick
Carlisle, Kenneth (Lincoln)Gummer, Rt Hon John Selwyn
Carrington, MatthewHague, William
Carttiss, MichaelHamilton, Neil (Tatton)
Cash, WilliamHampson, Dr Keith
Chapman, SydneyHanley, Jeremy
Chope, ChristopherHargreaves, A. (B'ham H'll Gr')
Churchill, MrHargreaves, Ken (Hyndburn)
Clark, Hon Alan (Plym'th S'n)Harris, David
Clark, Dr Michael (Rochford)Hayes, Jerry
Clarke, Rt Hon K. (Rushcliffe)Heathcoat-Amory, David
Conway, DerekHeddle, John
Coombs, Anthony (Wyre F'rest)Hicks, Mrs Maureen (Wolv' NF.)
Coombs, Simon (Swindon)Higgins, Rt Hon Terence L.
Cope, Rt Hon JohnHill, James
Cormack, PatrickHind, Kenneth
Couchman, JamesHogg, Hon Douglas (Gr'th'm)
Cran, JamesHolt, Richard
Currie, Mrs EdwinaHordern, Sir Peter
Howard, MichaelOnslow, Rt Hon Cranley
Howarth, G. (Cannock & B'wd)Oppenheim, Phillip
Howell, Ralph (North Norfolk)Page, Richard
Hughes, Robert G. (Harrow W)Paice, James
Hunt, David (Wirral W)Parkinson, Rt Hon Cecil
Hunt, Sir John (Ravensbourne)Patnick, Irvine
Hunter, AndrewPatten, Rt Hon Chris (Bath)
Hurd, Rt Hon DouglasPatten, John (Oxford W)
Irvine, MichaelPawsey, James
Irving, CharlesPeacock, Mrs Elizabeth
Jack, MichaelPorter, Barry (Wirral S)
Jackson, RobertPortillo, Michael
Janman, TimPowell, William (Corby)
Jessel, TobyPrice, Sir David
Johnson Smith, Sir GeoffreyRaffan, Keith
Jones, Gwilym (Cardiff N)Raison, Rt Hon Timothy
Jones, Robert B (Herts W)Redwood, John
Jopling, Rt Hon MichaelRenton, Tim
Kellett-Bowman, Dame ElaineRhodes James, Robert
Key, RobertRiddick, Graham
Kilfedder, JamesRidsdale, Sir Julian
King, Roger (B'ham N'thfield)Rifkind, Rt Hon Malcolm
Kirkhope, TimothyRoe, Mrs Marion
Knapman, RogerRossi, Sir Hugh
Knight, Greg (Derby North)Rost, Peter
Knight, Dame Jill (Edgbaston)Rowe, Andrew
Knowles, MichaelRumbold, Mrs Angela
Lamont, Rt Hon NormanSackville, Hon Tom
Lang, IanSayeed, Jonathan
Latham, MichaelShaw, David (Dover)
Lawrence, IvanShaw, Sir Giles (Pudsey)
Lee, John (Pendle)Shaw, Sir Michael (Scarb')
Lennox-Boyd, Hon MarkShephard, Mrs G. (Norfolk SW)
Lester, Jim (Broxtowe)Shepherd, Colin (Hereford)
Lightbown, DavidShersby, Michael
Lilley, PeterSkeet, Sir Trevor
Lloyd, Sir Ian (Havant)Smith, Sir Dudley (Warwick)
Lloyd, Peter (Fareham)Smith, Tim (Beaconsfield)
Lord, MichaelSoames, Hon Nicholas
Luce, Rt Hon RichardSpeed, Keith
Lyell, Sir NicholasSpeller, Tony
McCrindle, RobertSpicer, Sir Jim (Dorset W)
MacKay, Andrew (E Berkshire)Spicer, Michael (S Worcs)
McLoughlin, PatrickSquire, Robin
McNair-Wilson, Sir MichaelStanbrook, Ivor
McNair-Wilson, Sir PatrickStanley, Rt Hon Sir John
Malins, HumfreyStern, Michael
Maples, JohnStevens, Lewis
Marlow, TonyStewart, Allan (Eastwood)
Marshall, John (Hendon S)Stewart, Andy (Sherwood)
Marshall, Michael (Arundel)Stewart, Rt Hon Ian (Herts N)
Martin, David (Portsmouth S)Stokes, Sir John
Mates, MichaelSumberg, David
Maude, Hon FrancisSummerson, Hugo
Mawhinney, Dr BrianTapsell, Sir Peter
Maxwell-Hyslop, RobinTaylor, Ian (Esher)
Mayhew, Rt Hon Sir PatrickTaylor, John M (Solihull)
Meyer, Sir AnthonyTaylor, Teddy (S'end E)
Miller, Sir HalTebbit, Rt Hon Norman
Mills, IainTemple-Morris, Peter
Miscampbell, NormanThompson, Patrick (Norwich N)
Mitchell, Andrew (Gedling)Thorne, Neil
Mitchell, Sir DavidThornton, Malcolm
Moate, RogerThurnham, Peter
Monro, Sir HectorTownend, John (Bridlington)
Montgomery, Sir FergusTownsend, Cyril D. (B'heath)
Moore, Rt Hon JohnTracey, Richard
Morris, M (N'hampton S)Tredinnick, David
Morrison, Rt Hon P (Chester)Trippier, David
Moss, MalcolmTrotter, Neville
Moynihan, Hon ColinTwinn, Dr Ian
Mudd, DavidWaddington, Rt Hon David
Neale, GerrardWaldegrave, Hon William
Needham, RichardWalden, George
Nelson, AnthonyWalker, Bill (T'side North)
Newton, Rt Hon TonyWaller, Gary
Nicholls, PatrickWard, John
Nicholson, David (Taunton)Wardle, Charles (Bexhill)
Nicholson, Emma (Devon West)Warren, Kenneth
Norris, SteveWells, Bowen
Wheeler, JohnWoodcock, Dr. Mike
Whitney, RayYeo, Tim
Widdecombe, AnnYoung, Sir George (Acton)
Wiggin, Jerry
Winterton, Mrs AnnTellers for the Ayes:
Winterton, NicholasMr. Alan Howarth and Mr. David Maclean.
Wolfson, Mark
Wood, Timothy
Abbott, Ms DianeGarrett, John (Norwich South)
Adams, Allen (Paisley N)Garrett, Ted (Wallsend)
Allen, GrahamGilbert, Rt Hon Dr John
Alton, DavidGodman, Dr Norman A.
Anderson, DonaldGolding, Mrs Llin
Archer, Rt Hon PeterGordon, Mildred
Armstrong, HilaryGould, Bryan
Ashdown, Rt Hon PaddyGraham, Thomas
Ashley, Rt Hon JackGrant, Bernie (Tottenham)
Ashton, JoeGriffiths, Nigel (Edinburgh S)
Banks, Tony (Newham NW)Griffiths, Win (Bridgend)
Barnes, Harry (Derbyshire NE)Grocott, Bruce
Barnes, Mrs Rosie (Greenwich)Hardy, Peter
Barron, KevinHaynes, Frank
Battle, JohnHealey, Rt Hon Denis
Beckett, MargaretHenderson, Doug
Beith, A. J.Hinchliffe, David
Benn, Rt Hon TonyHogg, N. (C'nauld & Kilsyth)
Bennett, A. F. (D'nt'n & R'dish)Home Robertson, John
Bermingham, GeraldHood, Jimmy
Bidwell, SydneyHowarth, George (Knowsley N)
Blair, TonyHowell, Rt Hon D. (S'heath)
Boateng, PaulHoyle, Doug
Boyes, RolandHughes, John (Coventry NE)
Bradley, KeithHughes, Robert (Aberdeen N)
Bray, Dr JeremyHughes, Roy (Newport E)
Brown, Nicholas (Newcastle E)Illsley, Eric
Bruce, Malcolm (Gordon)Ingram, Adam
Buckley, George J.Janner, Greville
Caborn, RichardJohnston, Sir Russell
Callaghan, JimJones, Barry (Alyn & Deeside)
Campbell, Ron (Blyth Valley)Jones, Martyn (Clwyd S W)
Campbell-Savours, D. N.Kennedy, Charles
Canavan, DennisKinnock, Rt Hon Neil
Cartwright, JohnKirkwood, Archy
Clark, Dr David (S Shields)Lamond, James
Clarke, Tom (Monklands W)Leighton, Ron
Clay, BobLewis, Terry
Clelland, DavidLitherland, Robert
Clwyd, Mrs AnnLloyd, Tony (Stretford)
Cohen, HarryLofthouse, Geoffrey
Coleman, DonaldMcAllion, John
Cook, Robin (Livingston)McAvoy, Thomas
Cousins, JimMcCartney, Ian
Cryer, BobMacdonald, Calum A.
Cummings, JohnMcKay, Allen (Barnsley West)
Cunliffe, LawrenceMcKelvey, William
Darling, AlistairMcLeish, Henry
Davies, Rt Hon Denzil (Llanelli)Maclennan, Robert
Davies, Ron (Caerphilly)McWilliam, John
Davis, Terry (B'ham Hodge H'l)Madden, Max
Dewar, DonaldMahon, Mrs Alice
Dixon, DonMartin, Michael J. (Springburn)
Dobson, FrankMeacher, Michael
Doran, FrankMeale, Alan
Duffy, A. E. P.Michael, Alun
Dunwoody, Hon Mrs GwynethMichie, Bill (Sheffield Heeley)
Eadie, AlexanderMichie, Mrs Ray (Arg'l & Bute)
Eastham, KenMitchell, Austin (G't Grimsby)
Ewing, Harry (Falkirk E)Morgan, Rhodri
Ewing, Mrs Margaret (Moray)Morris, Rt Hon A. (W'shawe)
Fatchett, DerekMorris, Rt Hon J. (Aberavon)
Fearn, RonaldMowlam, Marjorie
Fisher, MarkMullin, Chris
Flannery, MartinMurphy, Paul
Flynn, PaulNellist, Dave
Foot, Rt Hon MichaelOakes, Rt Hon Gordon
Foster, DerekO'Brien, William
Fraser, JohnPatchett, Terry
Galloway, GeorgePendry, Tom
Pike, Peter L.Steinberg, Gerry
Powell, Ray (Ogmore)Stott, Roger
Primarolo, DawnStraw, Jack
Quin, Ms JoyceTaylor, Mrs Ann (Dewsbury)
Radice, GilesTaylor, Matthew (Truro)
Randall, StuartThompson, Jack (Wansbeck)
Redmond, MartinTurner, Dennis
Rees, Rt Hon MerlynVaz, Keith
Richardson, JoWall, Pat
Roberts, Allan (Bootle)Wallace, James
Robinson, GeoffreyWalley, Joan
Rogers, AllanWarden, Gareth (Gower)
Rooker, JeffWareing, Robert N.
Ross, Ernie (Dundee W)Watson, Mike (Glasgow, C)
Rowlands, TedWelsh, Andrew (Angus E)
Ruddock, JoanWelsh, Michael (Doncaster N)
Salmond, AlexWilliams, Rt Hon Alan
Sedgemore, BrianWilliams, Alan W. (Carm'then)
Sheldon, Rt Hon RobertWilson, Brian
Shore, Rt Hon PeterWinnick, David
Short, ClareWise, Mrs Audrey
Skinner, DennisWorthington, Tony
Smith, Andrew (Oxford E)Young, David (Bolton SE)
Smith, Rt Hon J. (Monk'ds E)
Smith, J. P. (Vale of Glam)Tellers for the Noes:
Soley, CliveMr. Frank Cook and Mr. Jimmy Dunnachie.
Spearing, Nigel

Question accordingly agreed to.

Lords amendments Nos. 81 to 89 disagreed to.

Lords amendments Nos. 28 to 50, 78 and 79 agreed to.