Atomic Energy Authority Bill

Part of the debate – in the House of Commons at 3:46 pm on 14 March 1995.

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Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North 3:46, 14 March 1995

Liability for the treatment of nuclear waste rests, of course, with the Government. The Bill makes no difference to that. Liability rests with Government division of AEA Technology, as I am sure the hon. Gentleman knows. It is the view and the experience of Government Division that an increasing arms length relationship with the various companies—including AEA Technology—that have the necessary expertise to deal with liabilities is the best way forward.

The latest estimate is that, in, I think, the next three years, the move towards an increasing arms length contractual relationship with companies that undertake decommissioning work will lead to a significant saving of public money of about £50 million. Liabilities rest with the Government, but they must do everything possible to ensure that those liabilities are managed not only safely, in accordance with the necessary conditions that are laid down, but cost effectively, from the point of view of doing the utmost to safeguard taxpayers' money.

In 1993, we asked Barclays de Zoete Wedd to consider the scope for privatisation. It advised us that the great majority of AEA's irradiated facilities should remain publicly owned—they should remain in what is now AEA Government division. But it also said that certain commercial activities were capable of being and should be privatised.

In September 1993, the authority's management announced a structural reorganisation, which reflected the themes emerging from the review work. Three separate divisions would result. UKAEA Government division would be responsible for managing UKAEA's sites and its nuclear liabilities. Commercial division, now known as AEA Technology, would take over the authority's commercial activities. The new services division would cover facilities management services.

The authority saw the creation of the services division as a temporary phase. Facilities services did not represent a core part of its business. It believed that those services could be offered more cheaply and efficiently by outside contractors. Agreement has been reached in principle for the sale of facilities services division. The intended buyer—Procord Ltd.—is a leading facilities management company. Its core business is facilities management. Its purchase of FSD will improve quality of service for FSD's customers. It will also create new career opportunities for current employees because they will be part of a much larger organisation that—this is important for their future—is committed to growing the facilities service operation. It is a good deal for all concerned, not least the taxpayer.

In my reply on 17 February 1994 to my hon. Friend the Member for Wantage (Mr. Jackson), I said that ownership of and responsibility for the safe management of AEA's nuclear liabilities, as well as certain other functions more appropriate to Government, would remain in the public sector. I can now confirm that those liabilities and other functions will remain with UKAEA Government division, which will remain in the public sector.

Government division's mission is to manage down the cost of the nuclear liabilities, consistent always with the health, safety and environmental requirements that are laid down. I want to underline and emphasise the importance of safety. Safety is and will remain the highest priority both for the Government and for all those involved in the nuclear industry.

The nuclear site licences at AEA sites will continue to be held by UKAEA Government division. It will, therefore, retain ultimate responsibility for safety at all UKAEA sites. Where AEA Technology operates from those sites, it will have to comply with UKAEA safety requirements. Privatisation will not compromise safety in any way.

Government division's focus on liabilities management has already achieved significant savings. Further savings will flow from increased competition and the injection of private sector expertise.

Government division announced yesterday that it has decided to appoint a site managing agent at Dounreay. That managing agency will consist of a management team seconded to Government division. Government division will retain ownership and overall control of the site. Government division will continue to be the site licence holder and will continue, therefore, to have full responsibility for safety.

Dounreay staff currently in Government division will continue to be UKAEA employees. They will not—I repeat not—become the employees of the managing agent. That arrangement will provide additional project management and commercial expertise. It will ensure that decommissioning and environmental restoration work at Dounreay is carried out effectively. It will also help in future development of the site, including the exploitation of non-nuclear opportunities.