Nuclear Power Industry

Opposition Day – in the House of Commons at 6:36 pm on 17th May 1995.

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Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State 7:14 pm, 17th May 1995

I beg to move, That this House believes that the privatisation of the nuclear power industry is unwanted and unnecessary and is not based on an assessment of Britain's long-term energy needs or industrial strategy but is a cynical, short-term move designed to raise money for tax cuts before the next General Election; further believes that taxpayers will be left with the bill for the decommissioning of the Magnox stations and for the management of the nuclear waste that accrues, that nuclear privatisation will do nothing to promote the interests of consumers, and that claims of guarantees on distinct identities for Scottish Nuclear and Nuclear Electric are worthless; and calls on Her Majesty's Government to abandon immediately its plans to privatise the nuclear power industry. Two weeks ago, the Conservative party lost 2,500 local government seats all over England and Wales. After the wipeout that it had suffered in Scotland one month earlier, it was left with only a miserable control of eight councils in England and none in Scotland and Wales. That was, by any standards, an unprecedented and unmistakeable rebuke to the Government. In any other democracy, it would have led to the Prime Minister's head rolling down Whitehall.

What has the Government's response to the salutary verdict of the people been? Has it been contrition? No hope. Has it been reflection? Not even for a moment. Has it been a recognition that some policies may be wrong and need changing? Fat chance of that. Instead, the voters will receive more of exactly the same mixture that brought about the local council humiliation. The first signal of a contempt for the democratic voice was the announcement last week of the last desperate privatisation of the nuclear power industry.

The Conservative party is addicted to privatisation. Having got rid of the last family spoons from the cupboard, it is now down to the family's nuclear reactors—that is the act of a Government in desperate and terminal trouble. Let us not forget that this was the privatisation from which even Mrs. Thatcher walked away. It seems that when it came to the nuclear industry, the lady was for turning. Why does not the Secretary of State for Scotland—he was, allegedly, one of those who opposed it in Cabinet—tell the President of the Board of Trade, even if he is in China, that he should do the country a favour by ensuring that Mrs. Thatcher's U-turn is replicated in 1995?

This privatisation has nothing to do with energy policy or industrial strategy. It is to be shaped by political pressures and the interests of future shareholders, not by the needs of electricity consumers. Those are not my words or the words of any Opposition politician; they are the words of last Wednesday's Financial Times editorial. They should be marked by the Government because they speak the truth.

The privatisation is just a cynical and desperate attempt to raise money for tax bribes before the next election. The same wonderful people who gave us the dash for gas now give us the dash for cash. It is no coincidence that the madcap scheme comes when the Government have discovered an overshoot of £1.2 billion in their borrowing targets and a gaping hole in their tax bribe treasure chest. Ministers now seem prepared to sell anything, even the most sensitive of industries, to plug the hole in Treasury coffers.

The consumer is offered what looks like a sweetener—cash for not asking questions: the £20 that is allegedly to be cut from domestic bills. It is a con—the political equivalent of the three-card trick. The £20 off—the 8 per cent. reduction in electricity prices—has been trumpeted by the Tory party and held up in the private Tory party briefing for Conservative Members as the major argument for the privatisation. That sweetener has nothing to do with privatisation. Ending the fossil fuel levy has nothing to do—

Photo of Mr Phil Gallie Mr Phil Gallie , Ayr

Will the hon. Gentleman give way?

Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State

How can I resist the hon. Gentleman?

Photo of Mr Phil Gallie Mr Phil Gallie , Ayr

Does the hon. Gentleman agree that nuclear engineering and nuclear generation are desirable? If they are, does he believe that there should be another nuclear power station built in the United Kingdom? If he believes that, could he suggest a cost for it and say whether a Labour Government would ever find the cash to supply such a station?

Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State

The hon. Gentleman might check what his own party is saying about the matter, as it happens to be the Government temporarily. The privatisation reveals that there will be no more public finance in order to build nuclear power stations. The Government are ending the nuclear build programme. It appears that the Whips and the Scottish Office Ministers have spoken to the hon. Gentleman who rebelled a couple of weeks ago in Scotland—perhaps he rebels all the time now—and, as a consequence, he is crawling around attempting to support a case that he knows deep down is not worth sustaining.

Ending the fossil fuel levy has nothing to do with flogging off the nuclear reactors of Britain to whoever wants to buy them. It is a cynical and serious matter to deceive the electorate by pretending that it is largesse resulting from privatisation. Perhaps the Secretary of State for Scotland will confirm whether the 8 per cent. price reduction and the £20 that the Government claim will be cut from electricity bills could have been achieved while retaining the nuclear industry within the public sector.

Will the Secretary of State concede that point? I shall give way to allow him to answer that relatively simple question. Could not those price cuts—that sweetener—have been made without privatisation? I shall give way to allow the right hon. Gentleman to answer that simple and important question. Will he tell the House and the country the answer? Is he not able to tell us; does he not know the answer? Is it not a fact that, if he stood at the Dispatch Box, he would be forced to admit that the sweetener has nothing to do with privatising the nuclear power industry but has to do with a fossil fuel levy that could have been cut off at any point? By his silence, the Secretary of State reveals the weakness of the Government's case. We can draw only one conclusion from his silence.

Photo of Dr Michael Clark Dr Michael Clark , Rochford

Perhaps I could attempt to assist the hon. Gentleman by answering the question that he has put several times. He will know that the nuclear levy has been withdrawn because the liberalised and semi-privatised nuclear industry, which has been run very effectively as a separate company, has raised enough cash to pay for decommissioning the nuclear power stations in due course. The next step is to privatise them so that they will become even more efficient and effective. The money has been raised by the efficient working of the nuclear industry since the initial privatisation took place.

Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State

The hon. Gentleman is normally authoritative about these matters, and I admire his courage in wandering into the firing line when a member of the Cabinet sits rooted to his seat when confronted with that relatively simple question. However, there is no evidence to suggest that the hon. Gentleman is correct. Last Wednesday, the Financial Times made exactly that point in an analysis which was cruel from the Government's point of view. It said: unless the government can come up with a convincing explanation of how the money will be found, the assumption must be that the cost"— of decommissioning—after all, that is what the nuclear component of the fossil fuel levy was all about— will ultimately fall on the taxpayer". The reality is that the Government are going to privatise the nuclear power industry and quite separately—it is irrelevant to the privatisation process—are going to cut off one part of the fossil fuel levy and give the people their money back as a free gift.

Photo of Bob Spink Bob Spink , Castle Point

Will the hon. Gentleman give way?

Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State

No, I shall make some progress.

The Government intend to bribe the people with their own money, which was to go towards paying the vast and indeterminate costs of decommissioning Britain's power stations. As the Financial Times correctly points out, that money will have to be raised from the next generation of taxpayers. As usual, the taxpayers will suffer as the new shareholders get a bargain.

The Government's nuclear sums simply do not add up. The Government claim that the Magnox liabilities for Scottish Nuclear and Nuclear Electric amount to £8.5 billion. Will the Secretary of State confirm that that is less than the combined total worth of the two companies as is stated in their annual reports? How does he explain the discrepancy between the Government's figure and what is in the annual reports? What piece of creative accountancy can justify that discrepancy? Will he make available to the House a full detailed breakdown of the Government's new estimates so that hon. Members can decide for themselves?

Photo of Bob Spink Bob Spink , Castle Point

Is the hon. Gentleman aware that the first phase of decommissioning the Berkeley Magnox plant has been completed and that it cost one third less than was estimated? Other research shows that the decommissioning costs will be much lower than assumed initially. Will the hon. Gentleman acknowledge those facts?

Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State

The hon. Gentleman uses one example to make one point, but there are plenty of other examples. The industry experts know that the decommissioning costs will be much greater than the Government estimate. If the Government are willing to publish the details in full, perhaps Opposition Members will be persuaded by the Government's argument.

On the basis of the Government's own figures, £5.9 billion has been raised so far to meet the liabilities. Will the Secretary of State confirm that, even according to the Government's published figures, a £2.6 billion funding gap remains? Will he confirm also that even the £5.9 billion figure includes speculative projected savings of 10 per cent. in Magnox liability costs that may or may not materialise? If they do not, the gap in the Government's nuclear sums will increase to £3.5 billion.

There is no guarantee that the Government will raise even that amount from privatisation. Some of the estimates that we have seen so far have been as low as £2 billion. Even if all the cash raised from privatisation were put aside to pay for decommissioning, there is no guarantee that it would meet the full minimum costs of the Magnox liabilities. Of course, it will not be put aside for decommissioning; it will be used to pay for tax bribes to save a dying Government.

Once again, future generations will be forced to clean up the mess that is left by the Government. The public will pay twice because the money that was supposed to pay for decommissioning was spent instead on Sizewell B and the income from Sizewell B that was supposed to help to finance the liabilities of the Magnox plants will be hived off. In other words, the private shareholders will get the assets and the taxpayers will get all the liabilities and they will pay twice. That is some deal for the taxpayers.

Although much attention has correctly been focused on the Magnox liabilities, I would like to pursue the Secretary of State—if he ever decides to answer a question—on the issue of the other liabilities that the private sector will have to accept. Perhaps he is currently being briefed about my first question. It seems pointless to ask questions of him if he does not even bother to listen to them.

What guarantees can the Government give that the taxpayers might not in future have to foot the bill for decommissioning Britain's advanced gas-cooled reactors and pressurised water reactors? Given the difficulty of quantifying decommissioning costs, does the Secretary of State expect the private sector to accept such massive, open-ended liabilities? Of course he does not; no one does.

The Financial Times said: The City is likely to demand a premium for investing in nuclear power … Investors will want reassurance about the liabilities for clean-up costs. Of course, the implicit deal is that the public will get stuck with the bill. The financial risks involved in investing in the nuclear industry will be massive. If the operators are persuaded to buy the industry, frankly, it will have to be at car boot sale prices, and a boot sale bargain is precisely what it will be. The new Sizewell B reactor cost almost £3 billion to complete, so, in effect, investors in the nuclear power industry are buying into a new holding company and they will get the other seven reactors for free—eight nuclear reactors for the price of one. Once again, the bottom line is that the Government are selling off public assets at a massive discount to the City and a massive loss to the country.

What happens if the privatised company falls into financial difficulty? After all, it will not be just any old company. It cannot board up the windows of nuclear power stations and put up a "To Let" sign. We are talking about nuclear reactors. If the privatised company does not make sufficient provision for decommissioning, the taxpayer will have to pick up the tab as a last resort. Will the Secretary of State for Scotland tell us tonight that that is not true and that, in the deep recesses of the future, the decommissioning costs will be picked up by the private buyers?

It is no use the Government saying that a segregated fund for decommissioning will do the trick. A private company, whose entire raison d'être is to maximise returns to shareholders, will not want to set aside money for decommissioning. Heaven knows, the short-termism in the City of London is such that most investors are concerned with the next five to 10 years at most, never mind liabilities that may arise 100 years down the line. What real incentive will a private company have to put aside the necessary money?

Of course, nobody knows what the final bill will be. In respect of Sizewell B, for example, nobody has ever decommissioned a pressurised water reactor before. How do we know how much it will cost to decommission Sizewell B? The answer is that we do not know. However, we know that Scottish Nuclear is budgeting £10 million this year alone to start decommissioning Hunterston A in Ayrshire.

We do not even know how the Government plan to dispose of old stations and their waste because Ministers have swept the issue under the carpet until after privatisation. What else will be swept under the carpet? What other rabbits will the President of the Board of Trade pull out of his hat once the shares have been sold? What guarantees do investors have that they will not be sold another false prospectus by the Government? Investors know that it has happened before and they have a right to know now what the prospectus will be. Far from offering the nuclear industry a bright future, nuclear privatisation is just another way for the Government to further absolve themselves of the responsibility for Britain's long-term energy needs.

Ministers are quick enough to criticise Labour for refusing to invest in new nuclear power stations, but I say to the hon. Member for Ayr (Mr. Gallie), who should know better—perhaps he was put up to ask the question—that the Government are not prepared to invest in new generating capacity either; they are not prepared to put their money where their mouth is.

The inevitable consequence is that any privatised nuclear company unable to find money for a new nuclear power station will want to diversify into gas-fired generation. Everybody says it and everybody knows it. The Times put it succinctly last Wednesday: That could mean that a private nuclear industry would by slow degree cease to be nuclear at all. What future is that for the nuclear industry or, for that matter, for the coal industry that was decimated by the previous dash for gas? Do not Ministers care at all about the long-term mix of energy resources?

Roger Hayes, director-general of the British Nuclear Forum, said: It is … unfortunate that the Government appears to believe our energy needs can be left entirely to that the short-termism of market forces. They cannot. The same free market in energy that brought about the dash for gas and ruined the coal industry will wreck the nuclear industry, too. What will that do for investment, research and development and jobs?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

I understand the criticisms that the hon. Gentleman is making of the Government's position on the long-term future of the nuclear industry, but I do not understand them in the context of the Labour party's manifesto commitment not to build new nuclear power stations and the environmental policy document published just today which makes the same statement.

Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State

If the hon. Gentleman is confessing that he does not understand, I am stating that the Government's position is being undermined by their own policies. The Labour party has made its position absolutely clear in regard to the need for a long-term mix in the energy needs of the country.

I return to the crucial issue of jobs. Some 70,000 jobs have been lost in the gas, water and electricity industries in Britain since privatisation, so why should the nuclear industry be any different? Why should it expect anything different from privatisation?

The Conservative party briefing for Back Benchers, which no doubt we shall hear repeated to the House this evening, is careful and economic with the language it uses in respect of jobs. It says: Privatisation will offer new opportunities for staff and management, and is expected to create at least 100 extra jobs in Scotland. That is a critical argument. There will be no extra jobs anywhere else and jobs will be created in Scotland by a paper transfer across the border. That is just another promise in line with other promises that have been made and betrayed in the past.

The privatisation bears all the hallmarks of previous sell-offs. If it goes ahead, we can expect a rerun of what happened in all the other privatised utilities—massive job losses, huge price increases and directors making themselves obscenely rich at the expense of the consumer.

Privatisation simply is not needed to make the nuclear industry more efficient. After all, Ministers spent the past five years telling us that it was already the very model of efficiency. At the time of the coal review, they never tired of telling us about the improvements in productivity that had taken place, and that is confirmed in the White Paper. Profits are up, productivity is up and costs are down. If the nuclear industry can improve efficiency so dramatically in the public sector, why is there any need to privatise it? If it ain't broke, why are they trying to fix it?

How can privatisation possibly enhance competition when more than a quarter of Britain's electricity generating capacity will be in the hands of one company and when the other two generators and generating companies in England and WalesNational Power and PowerGen—are asked to divest themselves of significant generating capacity?

The regulator himself argued against the creation of a large nuclear monolith. He also expressed concern that Nuclear Electric's current market power may have restricted choice and increased prices. Why are the Government giving it even more market power when even the Electricity Consumers Council says that customers have been massively overcharged for their electricity since privatisation? How will less competition benefit the consumer? Given that the combined company will account for 23 per cent. of electricity generation in the United Kingdom, how can the Secretary of State—I hope that he will take note of this and return to it in his speech—and the Government guarantee that any flotation would not be affected by a possible reference to the Monopolies and Mergers Commission in future?

The shotgun wedding of Nuclear Electric and Scottish Nuclear has nothing to do with the future of the Scottish nuclear industry, and everyone north of the border knows that. It has everything to do with raising as much cash as possible as quickly as possible to plug the gap in the Treasury coffers.

Ministers' claims that the merged company will be able to compete on the world stage simply do not hold water. Adding Scottish Nuclear's two AGRs still leaves the combined company nowhere near the size of Electricité de France, one of its chief rivals. Most experts agree that the key to winning overseas orders is not size but reactor design and a track record in running the reactor type in question. How, then, will adding two AGRs to its generating capacity help Nuclear Electric to win any Taiwanese PWR deal?

The nuclear fusion of Nuclear Electric and Scottish Nuclear is a shoddy betrayal of Scotland's interests. Government guarantees are little more than a cruel confidence trick designed to buy off yet another Tory Back-Bench revolt. Only half the number in revolt is here this evening, and that might even be on the generous side.

While the Scottish Office spin doctors—there seem to be rather a lot of them—have been trumpeting the jobs as a triumph for the Secretary of State for Scotland, the press release from Scottish Nuclear said it all: Scottish Nuclear welcomes the decision if it secures future jobs in Scotland. That is a mighty important "if. Scottish Nuclear is right to be sceptical. After the previous experience of those of us in Scotland of Britoil and the Guinness takeover of Distillers, that if is a pretty big and important "if."

It is therefore no surprise that Sir Donald Miller, hardly the friend of the left in Scottish politics, the former chairman of the South of Scotland electricity board and Scottish Power, described the new brass plate destined for somewhere in Scotland as merely a sop and called the merger a breach of faith.

Do the Government not realise that paper guarantees are not good enough? Why should anyone in Scotland believe the Government's words? The Secretary of State for Scotland wrote to me last week about the triple lock of the establishment of the substantive headquarters in Scotland well in advance of privatisation, incorporation of the key features in the memorandum and articles of association and specific protection of those key features through special shares.

How many times in the past 16 years have we heard about the golden shares, the special shares, the locks, and how many of them are still intact today? None at all. No one in Scotland and no one in the rest of the country believes a word that the Government say.

Then there is the crucial and vital matter of safety. The publicly owned British nuclear industry has an excellent safety record—one of the best in the world. That is a tribute to the management and work force as well as to the fine work of the nuclear installations inspectorate.

Why, then, should Britain want to jeopardise that record with these dangerous plans? Not only is there a conflict between short-term private profit and the long-term interests of public safety and the environment but there is a real concern that the inspectorate is not properly equipped to regulate a privately owned nuclear industry.

We must recognise that there are substantial costs relating to the regulation of nuclear safety. In the United Kingdom, safety is clearly the responsibility of the nuclear operator. In essence, the onus is on the operator to prove the safety case to a small specialist staff.

In the United States, where the industry is largely in private hands, the demands of the private sector shareholders have ensured that the nuclear utilities take the view that safety is not their responsibility and that regulation is not for them but for the regulator. As a consequence, the American equivalent of the nuclear installations inspectorate is large, bureaucratic and expensive. That expense will have to be borne by the taxpayer if we go down the American route of a privatised industry.

I give this warning now: if the industry is privatised, we will put in place the toughest, strongest, most stringent nuclear safety regime to be found in the world.

Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State

Yes, we have, and there are precious few people in the country who believe for a moment that in order to get rid of the industry on the private market there will not be a weakening in the safety regime. No one believes that. I am simply making it clear that we will put in place the toughest regime that is possible here. Given the apprehensions that exist about nuclear power stations in the private sector, that is a commitment that should be noticed by the public and by the market.

This is the most ill-conceived privatisation of all. It is unwanted and unnecessary. Once again, public assets will be sold, probably at a knock-down price, and while the shareholders and directors of the new company my make themselves rich on the profits, the consumer and the taxpayer will be forced to pick up the tab in the end.

The Government's guarantees about the future of Scottish Nuclear are no more than a fraudulent fig leaf. I urge the hon. Member for Ayr, since he appears to be the only one of the former rebels who is now even interested, to be serious about the whole question of Scottish jobs and a great Scottish company, and not to be bought off with such cheap promises. I invite him to join us in the Lobby tonight and to take a stand for sense, safety and efficiency in this unique and most important of industries.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale 7:45 pm, 17th May 1995

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: welcomes the outcome of the Government's Nuclear Review; applauds the improvements in performance by the nuclear generators since the privatisation of the rest of the electricity supply industry, including the reduction of decommissioning costs achieved so far; welcomes the proposals for more cost-effective management of Magnox liabilities; welcomes the Government's decision to privatise the industry's seven AGR stations and one PWR station during the course of 1996; endorses the decision to create a holding company, with its headquarters located in Scotland, with the parts of Nuclear Electric and Scottish Nuclear that are to be privatised as its wholly owned subsidiaries; notes that safety will continue to be of paramount importance when the industry is in the private sector; and applauds the benefits to consumers in terms of lower electricity prices which the early end to the nuclear element of the fossil fuel levy in England and Wales and to the premium price in the Nuclear Energy Agreement in Scotland will bring.". I listened with great interest and even greater curiosity as the hon. Member for Hamilton (Mr. Robertson) poured forth about the future of our nuclear industry. The bogus nature of the sentiments that he expressed and the inherently fraudulent prospectus for the future of the nuclear industry that he offered the House will become clear if I remind the House of the manifesto on which he and his colleagues fought the last general election. It said: We will not invest in new nuclear power stations … or extend the lives of existing nuclear stations beyond their safe lifespan. Britain's dependence on nuclear power will therefore steadily diminish. That is the reality of the twilight world of decline and decay, with jobs and technology withering and disappearing, to which the Opposition stand committed.

Nor have the Opposition changed their view since then. The hon. Member for Clackmannan (Mr. O'Neill), whom I see in his seat, Labour's energy spokesman, speaking earlier this year, said: Labour's position remains as it was at the last general election. Therefore, a public sector nuclear industry would know exactly what to expect from a Labour Government: decline and decay leading to demise.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

Yes. Perhaps the hon. Gentleman will recant on behalf of his party.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

The right hon. Gentleman will know my position on nuclear power. Will he be specific and tell the House how many jobs there are now in the nuclear industry and how many there were, say, 10 years ago? Is it not true that there has been a rapid decline in the number of real jobs in the industry and that that is all down to the Government's failure to develop a proper energy policy?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

There has been a rapid improvement in productivity and efficiency in the industry, which has enabled costs to come down and privatisation to be contemplated. Under the Opposition, however, there will ultimately be no jobs at all in the industry, and that should concern the hon. Gentleman.

The only thing that was clear from the speech made by the hon. Member for Hamilton was that Labour has not abandoned its knee-jerk reaction to every privatisation ever proposed, even though it claims to have abandoned clause IV. I say "claims" because the very day after voting to abandon clause IV in Scotland, Labour's Scottish conference voted to nationalise every single public utility. Does that extend, one wonders, to the privatised nuclear industry? Or would that be the only public utility in Scotland that Labour would not renationalise? I listened throughout the 31 minutes for which the hon. Gentleman spoke to hear that commitment. Perhaps he would like to clarify the position now. I will gladly give way to him if he would like to do so.

Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North

Sit down and give him a try.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Member for Cunninghame, North (Mr. Wilson) will have another opportunity. Perhaps the Opposition would like to think about it for a little while.

The Government's decisions on the nuclear generating industry were announced by my right hon. Friend the President of the Board of Trade on 9 May 1995, and I welcome the opportunity to explain them once again. Indeed, I wonder whether the hon. Member for Hamilton listened to anything that was said that day. The proposals were unalloyed good news for the industry and its employees, for the taxpayer and for electricity consumers. Unlike the Labour party's plans, they offer the industry a vibrant and enduring future, freed from the constraints of nationalised ownership.

Of course I understand that Opposition Members and the country at large want reassurance on safety—rightly so—and I am happy to give it. The nuclear generation industry in this country has an excellent safety record. I assure the House, as my right hon. Friend the President of the Board of Trade did at the time of his statement, that safety has been a paramount consideration throughout the nuclear review. Our commitment to safety will not be diminished or compromised when the industry is privatised. We shall continue to have, in the public sector, the robust and vigorous safety standards and disciplines for which the country is rightly renowned.

It is irresponsible for the Labour party or other commentators to suggest that the privatised industry will be anything other than totally committed to maintaining the excellent safety record already established by Nuclear Electric and Scottish Nuclear.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

Will the right hon. Gentleman give way?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I will give way, but perhaps I may finish the argument about safety first.

The Health and Safety Commission has advised that there is no reason to change the licensing and monitoring regime for nuclear sites in any fundamental way to deal with the new structure to be privatised. That regime will remain transparent, rigorous and robust. The Government will not permit any weakening of a regulatory regime or of the safety standards currently in force. The HSC worked with the Government in preparing its timetable. The HSC will continue its independent role as regulator. In that role it will carefully consider all proposals for relicensing consistent with the Government's proposed structure for the privatisation. So we have taken steps. Both public and private sector operators will continue to be subject to the same rigorous safety regime as now applies. Our commitment to that remains absolute.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

The question that I asked the President of the Board of Trade on his statement was this: is there to be no member for safety on the main board, and will the safety establishment be at Peel park? Frankly, any idea of Scottish headquarters is not very convincing without a clear indication that the safety headquarters and all that goes with it will be at the Scottish headquarters, which most of us would like to see at Peel park.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I give the hon. Gentleman the answer that my right hon. Friend the President of the Board of Trade gave him. That is a matter for the Health and Safety Executive and for the nuclear installations inspectorate and will no doubt be considered as they consider the various stages of progress towards privatisation. It is not a matter for the Government to lay down; it is a matter for the health and safety authorities to satisfy themselves on, and I am certain that they will do so.

It is clear, from the motion and from the speech of the hon. Member for Hamilton, that the Opposition like to live in the past. They are aware of no reason to move on from the perception of 1989, when the nuclear stations had to be excluded from privatisation because of anxiety that was in large part about the risks of those costs and liabilities increasing unpredictably.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I give way to my hon. Friend the Member for Scarborough (Mr. Sykes).

Photo of Mr John Sykes Mr John Sykes , Scarborough

Before the Secretary of State leaves the issue of safety, is it not grossly irresponsible of Labour Members to prattle on about safety, as they have done time and again, in relation to every privatisation? I think especially of gas. We have never had to nationalise ICI, a leading chemical company in this country, because of safety problems. It has produced some very dangerous chemicals indeed, but it has proved extremely able to run itself without having to be nationalised. Is it not therefore grossly irresponsible of the Labour party to talk about safety in that way?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

My hon. Friend is absolutely right and he makes the argument very well. There are a substantial number of private nuclear sites already licensed—licensed, in some cases, by the Labour party—in the United Kingdom. To imply that safety is in any way compromised or diminished as a result of the industry entering the private sector is completely wrong and misleading. I hope that the extensive comments that I have made this evening will reassure the House about that.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

No, I must move on as I want to mention costs and liabilities.

Photo of Mr Brian Wilson Mr Brian Wilson , Cunninghame North

The Secretary of State will appreciate that the nuclear installations inspectorate and Her Majesty's inspectorate of pollution have each said that it will take a minimum of 12 to 14 months to go through all the relicensing procedures. Will he give an absolute assurance that no pressure will be brought to bear to truncate that process and that if that time scale proves inadequate no political pressure will be brought to bear to stay within that time scale?

Will the Secretary of State address himself especially to the problem of the division of ownership within sites, which we have not had previously in this country, and which at Hunterston in my constituency, for instance, will give rise to new questions about the licensing procedures?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

There is absolutely no question of the Government putting pressure on the Health and Safety Executive. It is outrageous that the hon. Gentleman should suggest that, and it is discourteous to all the safety and security organisations in the country to imply that they would be in the slightest way susceptible to such pressure.

On costs and liabilities, since 1989 uncertainties and risks surrounding the costs of decommissioning nuclear stations and managing spent fuel have in reality been substantially reduced. Experience in decommissioning has been going—

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

No, I should like to press on, if the hon. Gentleman will forgive me.

Experience in decommissioning has been gained at Berkeley and Hunterston A, which have both completed stage 1 of the decommissioning process ahead of schedule, and the work done so far has, as my hon. Friend the Member for Castle Point (Dr. Spink) said, been brought in at well below the estimated cost.

Moreover, both Nuclear Electric and Scottish Nuclear have agreed new fuel cycle contracts with British Nuclear Fuels plc. They are now in a much better position than they were in 1989 to demonstrate that the estimates that they have made of their long-term liabilities are robust. They have been making provision for their liabilities in a much more informed way.

Let me say a word about what Scottish Nuclear and Nuclear Electric have achieved since they were vested in 1990. Both companies have secured very substantial improvements in their financial and operational performance. Output has increased; costs have decreased. Productivity has very significantly increased. They should receive our congratulations on that. That success, driven in part by their ambition to be privatised, has facilitated the Government's decision to privatise the most modern nuclear stations.

Our decision to privatise the advanced gas-cooled reactor and pressurised water reactor power stations is therefore backed up, not only by the vastly improved performance of the AGRs but by reduction of uncertainty about long-term liabilities.

Photo of Adam Ingram Adam Ingram , East Kilbride

In terms of the achievements of Nuclear Electric and Scottish Nuclear, how would the Secretary of State tackle the issue of utilisation of those stations? Those stations are running at maximum capacity, to try to achieve the best terms pre-privatisation, with both companies wanting to achieve privatisation. If that utilisation rate continues, the life span of the nuclear stations will be considerably shortened.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Gentleman puts his finger on precisely the type of point that the management of those companies will need to take into account as they consider the future development of the company and the future employment of their assets. I am talking at the moment about the liabilities associated with the stations to be privatised, and they will all be transferred to the private sector. It will be the Government's aim to ensure—

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I must make further progress.

It will be the Government's aim to ensure that the privatised companies meet their obligations in full. Specifically, they must make sufficient financial provision to meet their liabilities so that the costs of meeting them do not fall on the taxpayer by default. We believe that the setting up of segregated funds is the best way of ensuring public confidence that that will be so. We shall therefore discuss with the industry the detailed implications of setting up the segregated funds necessary.

Our decision to privatise the more modern stations does not mean that the Magnox stations have been ignored—far from it. The nuclear review identified opportunities for reducing the costs of discharging their liabilities, which potentially fall to the taxpayer. All the Magnox stations and all Magnox liabilities will be held by a single company, which will remain in the public sector. Its operating Magnox stations will meet about 8 per cent. of demand for electricity in England and Wales, thus creating a fourth major generator in that market. The company will also be responsible for decommissioning Berkeley and Hunterston A.

It is intended that that company will eventually be transferred to BNFL, and that will give a clear incentive to maximise revenue from generation by optimising the economic lives of the remaining stations and by minimising costs of Magnox reprocessing and decommissioning. We believe that very significant sums can be saved in that way.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

In a moment.

Substantial sums can be saved in that way, in addition to the money that will be earned from continuing to operate the stations.

We welcome the new long-term agreements between BNFL and the nuclear generators and their intention to improve arrangements for dealing with the various categories of Magnox liabilities.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley Leader and Party President, Plaid Cymru

The Secretary of State will be aware of my interest from the point of view of the decommissioning of the Trawsfynydd power station in my constituency. In relation to the changes that he has described, will he give an assurance that if the professional scientific advice is that it would best to keep the structure as it is for 30 years, to allow the intensity of the radioactivity to decay, and thereafter to demolish it, nothing in his financial provisions will make that a less favoured option? Will the scientifically advisable option be adopted?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

All options are open, but I will certainly give the hon. Gentleman the assurance that nothing would be done to compromise safety and that, obviously, such scientific advice would have to be taken seriously.

As a result of the arrangements that I have described, BNFL's key role in the UK nuclear industry will be enhanced. Once the transfer to it of the Magnox stations is complete, it will become a significant new generator, with about 8 per cent. of the market in England and Wales.

In addition, BNFL's key role as the primary provider of nuclear fuel cycle services will be enhanced. It is a leader in the international market for those services and in the nuclear transport market. The Government confirm that BNFL will continue to offer the full range of those services as long as the market continues to demand them. We recognise that a major challenge for BNFL is to develop its business in the overseas markets where growth is stronger and to win further long-term contracts. I hope that that will reassure staff at BNFL as to their important long-term future.

In all this, we have not forgotten the electricity consumer. Privatisation will provide a powerful incentive for the two subsidiary companies to benefit their customers by raising efficiency and reducing costs still further. Domestic electricity prices are lower in real terms, even after value added tax, than two years ago. Further reductions are in prospect. The price paid by industrial consumers of electricity has also fallen significantly since 1989.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

If the hon. Gentleman will forgive me, I must make some further progress as I have a lot of information to lay before the House.

We are, however, taking such steps as are open to Government to accelerate and bring forward those benefits to consumers. In England and Wales, that part of the fossil fuel levy paid to Nuclear Electric will cease at privatisation. In Scotland, where domestic electricity prices are on average 3 per cent. lower than in England and Wales, the element of the premium price that Scottish Nuclear receives from its customers will also end then.

Those developments will result in further reductions in electricity prices both north and south of the border. The scale of the changes will be comparable—about 8 per cent. over the period—for all those who benefit. What we are doing is improving the efficiency of the industry and exerting further downward pressure on prices. That can only be good news for electricity consumers. It will help the industry to be more competitive. If Opposition Members had their way, consumers would be denied the benefits that privatisation will undoubtedly bring them.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

If the hon. Gentleman is going to tell me that he will or will not renationalise the industry, I shall happily give way.

Photo of Mr George Robertson Mr George Robertson Shadow Secretary of State

As the Secretary of State found out this morning, we are not allowed to attach strings to interventions. May I bring the Secretary of State back to the question that I asked and that he refused to answer? He has put forward a bribe from the Dispatch Box this evening. Will he confirm that that reduction in price could have taken place without privatisation, yes or no?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Gentleman puts a question in a way that does not make sense. It is because we are privatising the industry, changing its structure and enabling new management and new ownership to take over that the existing non-fossil fuel obligation and the existing nuclear energy agreement premium can be changed in that way and their termination can be brought forward, with the benefits to consumers that have already been described.

As the House is aware, the Government have decided to privatise Nuclear Electric and Scottish Nuclear as two wholly owned subsidiaries of a new holding company that will be located in Scotland. On 9 May, my right hon. Friend the President of the Board of Trade announced that the holding company will be responsible for all key functions for the group as a whole. As well as support for the holding company board, those functions will include the company secretariat, group finance, personnel, corporate communications and pensions administration. In addition, two separate subsidiaries, also based in Scotland, will handle international marketing for the group and the management of the segregated funds.

The new company is, as I said, to be headquartered in and run from Scotland. I am delighted to be able to announce that Mr. John Robb has agreed to serve as its chairman. He was a distinguished chairman of Wellcome. His strong links with Scotland will help to ensure that the holding company will exert real influence from its new base. The present chairmen of Scottish Nuclear and Nuclear Electric, James Hann and John Collier, have agreed to serve as deputy chairmen of the holding company. Executive directors will be appointed as soon as possible, and a non-executive director from each of the subsidiary companies will serve on the main board.

That structure provides a strong foundation for the new company's future. Sir Peter Middleton, chairman of Barclays de Zoete Wedd, has expressed his company's firm view that the structure will be perceived as both credible and workable by future investors and that, subject to normal financial considerations, potential exists for a successful flotation.

Several hon. Members:

rose

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I shall not give way at the moment.

It is disappointing that the Opposition continue to snipe and to suggest that the new arrangements will not stick, particularly in Scotland—we heard it again from the hon. Member for Hamilton today. The structure that we are creating is designed to be permanent. Three separate mechanisms will interlock to ensure that that is so.

First, the headquarters structure, which I have just outlined, will be well established in advance of privatisation. Secondly, key features of its structure will be incorporated into the company's memorandum and articles of association. Thirdly, those parts of the memorandum and articles will be explicitly protected by a special share that I will hold jointly with my right hon. Friend the President of the Board of Trade.

Photo of Alex Salmond Alex Salmond Leader, Scottish National Party

May I test the Secretary of State's seriousness on the question of the special share? If he had held the golden share in Britoil in 1988, would he have exercised it to stop the takeover by BP, which subsequently resulted in the closure of the Glasgow office?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The analogy is totally inadequate because the circumstances were different and the precise purposes of the share were different on that occasion. Indeed, the golden share had expired before a change in the circumstances took place that might have given rise to its being exercised.

What I have described will create a triple lock of the sort that I have mentioned. Last week, my right hon. Friend the President of the Board of Trade rightly called the arrangements a cast-iron guarantee for Scotland. It is evidence of the excellent deal that this represents for Scotland that Opposition Members have been reduced to claiming it is a transitory fig leaf. Had that been so, I would not have accepted the proposals.

Consistent with their enthusiasm for indulging in knocking copy, Scottish Members see only the scope for scaremongering. They worked hard during the nuclear review. First, they claimed that 300 jobs would be lost, then 400 and then the hon. Member for Hamilton even suggested that 1,000 jobs would be lost at East Kilbride. He may have impressed his colleagues on the Opposition Benches with the scale of that claim, but he forgot just one small thing—only 450 people are employed at East Kilbride.

The facts are that Scottish Nuclear and Nuclear Electric will continue as separate entities with their own boards. Their continued existence will be protected by separate special shares, of which the holder of my office will hold one—no doubt the hon. Gentleman still aspires to that—in Scottish Nuclear and the President of the Board of Trade the other in Nuclear Electric. The functions currently performed at East Kilbride by Scottish Nuclear will continue to be performed there. In addition, and once the nuclear installations inspectorate is satisfied with arrangements for the transfer, certain engineering functions within the two subsidiary companies will be reorganised to bring more jobs to Scotland. Overall, the new structure, far from leading to the loss of hundreds of jobs, as the Labour party claimed, will actually bring at least 100 jobs to Scotland.

Photo of Mr Phil Gallie Mr Phil Gallie , Ayr

My right hon. Friend is just in his comments but he raised a slight concern with me. He has pointed out that, if the nation had an aberration and the lot opposite took control of the Government, the hon. Member for Hamilton (Mr. Robertson) might have control of the golden share. Will my right hon. Friend confirm that that golden share will last 10 years? If that is the case, we should have no cause for concern.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I assure my hon. Friend on a number of points. First, the special share is without a time limit but must last at least 10 years. Secondly, I hope that his anxiety will steel his resolve to work still harder to ensure, with me and my right hon. and hon. Friends, that the Labour party will never be in a position to exercise the golden share.

The proposals that we have announced are intended to secure and, indeed, to strengthen the future of the nuclear industry in this country. They will secure for it a bright, long-term future, freed from control from Whitehall and freed from the financial constraints of the public sector. Far from leading to the loss of control of an important Scottish company, they will preserve the identities of both existing companies and bring a major new company headquarters to Scotland. In private ownership, that company will be free to compete in domestic and overseas markets. That is the context in which the new company will be able to make its own investment decisions. Those decisions will be based on commercial factors and not on the dead hand of the state. It opens the way for nuclear generation to compete for its future in the marketplace. Privatisation will be, for this industry as for so many others, the gateway to a bright and prosperous future.

Time and again over the years we have heard the Labour party whine and grumble about the Government's plans for privatisation. There have been countless scare stories, always disproved by subsequent events.

The hon. Member for Glasgow, Garscadden (Mr. Dewar)—I welcome him to our deliberations—started the ball rolling as long ago as 1979, when he claimed that British Airways will be the pantomime horse of capitalism if it is anything at all."—[Official Report, 19 November 1979; Vol. 974, c. 125.] Well, that horse has won the Grand National, the St. Leger, the Oaks and just about every other race around the world.

Photo of Tommy Graham Tommy Graham , Renfrew West and Inverclyde

Has the Secretary of state consulted the workers in the industry? They are telling us loud and clear that they do not want their industry to be privatised. In my area we have big disused quarries and the local folk are concerned that there is a possibility that low-level radioactive waste could be dumped there, putting them under threat. I am not saying that the industry is unsafe, but the waste is a problem. Will that problem be dumped in my disused quarries?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Gentleman should get together with his hon. Friend the Member for Garscadden because they are both so out of touch. The hon. Member for Garscadden could be the front legs of the pantomime horse and the hon. Gentleman could just be himself.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

No, I will not.

Next we had the claim that the privatisation of British Telecom would lead to the extinction of the public telephone box. The reality is that the number of BT call boxes has increased by over 50 per cent. since privatisation. Add to that over £1,000 invested for every household in the country and a 35 per cent. fall in average real prices and one gets the true picture of a successful privatisation.

Never one to miss stealing an idea or two, the right hon. Member for Sedgefield (Mr. Blair) had to get in on the act. I served on the Committee opposite the right hon. Gentleman when the Electricity Bill went through Parliament—at least I think I did; in fact, he was hardly ever there as he kept going out to brush his teeth ready to sparkle for the next sound bite. He said then: it is barely an issue that prices will rise because of privatisation."—[Official Report, 12 December 1988; Vol.143, c. 684.] In reality, the cost of domestic electricity has fallen by more than 8 per cent. in real terms in the past two years, more than cancelling out the additional cost of VAT.

Privatisation has benefited not just the consumers of these services but taxpayers as well. In 1979 nationalised industries cost the taxpayer around £50 million every week. Now, as privatised companies, they contribute around £50 million every week in taxes to the Exchequer. There is little doubt that the Opposition have been forced to ditch clause IV because of the success of the Government's privatisation programme. However, their supposed conversion will remain skin deep until they actually support a privatisation. When will we ever see or hear from new or old Labour support for the transfer of any activity from the public to the private sector?

I am confident that our proposals for the privatisation of the nuclear generators will bring significant benefits to taxpayer and consumer alike. A great deal of detailed work needs to be done and we remain determined that the safety standards for which the industry is renowned should be rigorously maintained. We are determined to make the privatisation a great success. I urge the House to reject the motion and support the Government's amendment.

Photo of Adam Ingram Adam Ingram , East Kilbride 8:13 pm, 17th May 1995

I enter the debate as a lifelong—that is probably an exaggeration—certainly a long-term supporter of the nuclear industry. I do not remember not supporting the industry. At one time I worked in the electricity supply industry. Also, I speak as the hon. Member for East Kilbride, which is the location of the headquarters of Scottish Nuclear, at which 300 direct staff are employed together with about 200 indirect staff. There is some variation in those figures depending on the number of indirect staff. As the Secretary of State said, there are about 450 jobs in total.

I believe firmly that nuclear energy has a vital role to play in the economy of this country. It offers a safe, reliable and effective source of energy. It is an industry with significant export potential, with a global market of £500 billion over the next 25 years. I genuinely believe that it offers diversity of supply in the context of a balanced energy policy—a policy that I have advocated for as long as I have been politically active in trade unions or the Labour party. Therefore, this is not the knee-jerk reaction of someone who is opposed to privatisation. I hope that my contribution will be considered against that background.

My considered view of the Government's proposals is that they are wrong for energy and the environment. They are bad for the consumer and the taxpayer and for those currently employed at the headquarters of Scottish Nuclear in East Kilbride. In the long term, they will be bad for many of those employed by Nuclear Electric. What is proposed in the White Paper is a wrong decision by a wrongheaded Government.

Photo of Mr Phil Gallie Mr Phil Gallie , Ayr

Will the hon. Gentleman give way?

Photo of Adam Ingram Adam Ingram , East Kilbride

The hon. Gentleman made several interventions during the Secretary of State's speech and he did not make many valid points then. He may get a chance to speak later if he catches Madam Speaker's eye.

The decision is wrong for energy because I do not believe for one moment that a privatised nuclear energy industry will build another nuclear station in this country. One needs only to look at the Government's White Paper—not the conclusions, but the analyses, which are ignored in the conclusions. Paragraph 4.24 says: On the basis of the evidence presented to the review, the Government concludes that it is unlikely in current market conditions and at current gas prices, that Sizewell C"— the next new nuclear power station to which reference has been made— can provide a rate of return competitive with the main alternative, a CCGT station. I believe that if we have a privatised nuclear energy industry in this country, it will opt not for nuclear power stations but for gas.

Paragraph 4.25 of the White Paper says: The market will in the end be the judge. So on the basis of current prices and rate of return, no nuclear station would be built. The choice would undoubtedly be gas.

Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North

The hon. Gentleman has summarised the Government's White Paper. When he stood for Labour at the previous general election, did he specifically disclaim the Labour party's manifesto commitment, which said—I remind him of it—that the Labour party would not invest in new nuclear power stations?

Photo of Adam Ingram Adam Ingram , East Kilbride

We should not be diverted from the central issue of the debate, but in any political party there are people with differing views. The Minister's party is riven from top to bottom on Europe. Many Conservative Members stood on a policy of no tax increases and no increases in VAT, yet the first thing the Government did was to implement those very policies as soon as they got into power. I hold firmly to my view on this. Many of my hon. Friends hold a similar view and many hold differing views. I hope that the debate within the Labour party will bring about a change in our energy policy. That is the democracy within the Labour party and I hope that my view will eventually prevail.

As I was saying, if the industry is privatised, it will not build a nuclear power station in the foreseeable future. I am glad that the Minister has accepted my analysis of the Government's White Paper.

I believe that if no new nuclear power station is built, that will have a major knock-on effect on not just the Scottish economy but the United Kingdom economy. There are many large-scale employers in the United Kingdom—Weirs of Cathcart and Babcock Power in Scotland alone are dependent on an expanding nuclear energy programme. If no nuclear stations are built, many thousands of jobs will be at risk. I believe that that will be the direct consequence of what is proposed in the White Paper.

I said in my opening remarks that the Government's decision was flawed and bad in environmental terms. The White Paper is entitled "The Prospects for Nuclear Power in the UK", but it ducks one of the central issues, which is that of the fuel route and what happens when a station is decommissioned. As I understand it, the Secretary of State for the Environment is not happy with the decision and said that the Government would defer the decision on the fuel route and decommissioning cycle for five years or more. That must be wrong. A White Paper that sets out to deal with the nuclear industry cannot ignore one of its fundamental aspects, that is, the decommissioning and downstream fuel route.

As my hon. Friend the Member for Hamilton (Mr. Robertson) said, I am sure that electricity consumers will not be conned by the £20 per annum reduction in their bills that they have been told will be the result of the levy being abandoned in England and Wales and the withdrawal of the nuclear energy agreement in Scotland. Not many consumers will read the Financial Times, but I think that they would agree with one of the points in its leading article the day after the Government's announcement. It stated: the proposed privatisation of the UK's two nuclear generating companies is to be shaped by political pressures and the interests of future shareholders, not by the needs of electricity consumers. That is an accurate statement. The leading article goes on to make many other trenchant criticisms of the White Paper.

Every year since electricity was privatised, electricity consumers have been paying approximately £1 billion by way of a levy, the purpose of which was, of course, to pay the decommissioning costs, although the total was never going to meet the full cost. However, the levy had to be imposed because the previous generator—the Central Electricity Generating Board—and the Government had not laid aside any of the money coming through the income stream for that purpose. The levy was therefore part of an historical cost and intended to meet part of the future costs.

In other words, consumers have been paying a heavy price for mistakes made in energy production and a heavy price for electricity privatisation, too. They will not be conned. They know what the Government are up to. The reduction in their bills is a small sop—£20 per annum— and it will not convince them to come on side.

Although the consumer will lose out, in the longer term the taxpayer will also be financially clobbered if privatisation goes ahead. It is clear that the underlying purpose of the privatisation proposals is to provide short-term cash for tax bribes. Every independent commentator identifies that as the case and has criticised the Government's proposals accordingly. Only the Government and their supporters are arguing that the reduction is anything other than a way of generating short-term cash for tax bribes.

The problem is that, in the longer term, taxpayers will have to pay the consequences of those bribes. There will be a sizeable debt to pick up. Taxpayers will have to underwrite the decommissioning costs not only of the nuclear stations that remain in the public sector but probably of those that enter the private sector.

In summing up, will the Minister consider what will happen if the privatised company goes bust? If two or three nuclear stations have to close because of the tight regulatory regime, there will be no income and the insurance bond will not pay the decommissioning costs. Who will pay them? It will be not the private sector but the taxpayers. At the same time, taxpayers will have to pick up sizeable decommissioning costs because of the Magnox stations that remain in the public sector.

Photo of Adam Ingram Adam Ingram , East Kilbride

I should like to give way, but time is short and other hon. Members wish to speak.

I deal finally with those who are currently employed in the industry. It should come as no surprise to the Minister, the Secretary of State or, I hope, Conservative Members in general, that the overwhelming majority of those employed by Scottish Nuclear and, I suspect, a large number of those employed by Nuclear Electric, are opposed to the proposals for the holding company and the merger of the two companies.

Will the Minister say something about the guarantee that has been given in relation to the corporate headquarters? I asked the President of the Board of Trade about that when he presented the White Paper, but I did not get a satisfactory answer. I hope that the Minister will provide one. Will the same guarantee be given to those currently employed at Scottish Nuclear headquarters and those currently employed at Nuclear Electric? Will there be a 10-year minimum guarantee of job security for them, just as there is in relation to the jobs that have been transferred to the corporate headquarters?

The fundamental reason why those employed by Scottish Nuclear do not accept the Government's proposals is that they know that the merged company will not make good economic sense. Which company in this country has a corporate headquarters and two separate operating headquarters, with all the duplication of administration, the cost of maintaining pensions for all the staff and the other support costs associated with it?

There may be 100 jobs to be moved around the country, but the reality is that there will be a consolidation of jobs and, therefore, job losses. This year alone another 65 jobs are to be cut at Scottish Nuclear so, although 100 jobs may be coming, there has already been a massive reduction in jobs. Employees do not believe a word that the Government say. They do not accept any of the guarantees that the Government maintain will be delivered, as announced by the Secretary of State.

If a privatised company says that it wants to close one of its operating headquarters because it is not generating enough income as one or two stations are not being utilised to the full, or because one or two have had to be closed as they are cracking and the safety regime insists on it, I do not think that the Secretary of State or the President of the Board of Trade will tell the holding company to keep the two operating headquarters open. If the company can save millions of pounds by closing one of them, so be it.

That is the reality facing the work force at Scottish Nuclear, which is why it does not accept the proposals and why I hope that the House will support the Labour motion.

Photo of Dr Michael Clark Dr Michael Clark , Rochford 8:27 pm, 17th May 1995

I am pleased to be able to follow the hon. Member for East Kilbride (Mr. Ingram). He and I served together on the Select Committee on Trade and Industry for some time and discussed nuclear matters privately on several occasions.

I welcome the Government's proposals to privatise the advanced gas-cooled reactors and the pressurised water reactor. That is in contrast to a speech mat I made in the House on 12 December 1988, when I spoke strongly against privatising the nuclear industry along with the rest of the electricity industry of that time.

The reason why I spoke against nuclear privatisation just over six years ago was, first, that the cost of decommissioning was not clearly known. Secondly, I wished us to maintain a sizeable nuclear industry and I could not be certain that, if the nuclear industry had been privatised then, we would have maintained the percentage of nuclear generation that I thought right for this country.

Thirdly, I thought it right to take the nuclear element out of the privatisation so that we could obtain the best possible price for National Power and PowerGen. Fourthly, I wanted to maintain a centre of excellence in the nuclear industry in Scotland and, indeed, in Britain in the constituency of my hon. Friend the Member for Gloucester (Mr. French).

Fifthly, I thought that it was right and proper that we should try to identify the true costs of nuclear energy before we ever absorbed nuclear energy into another large power-generating company or, indeed, privatised it at that time. Finally, and perhaps most important of all, I thought that there was still some public concern about safety and that until the public were confident about nuclear safety, it would not be appropriate to put the nuclear industry into the private sector.

I recall that on the same evening my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) made a similar speech with similar conclusions. However, both he and I were ignored—our conclusions were ignored at least—and it was decided that the nuclear industry would be privatised along with all coal, gas and oil-fired power stations.

Several months later, a new Secretary of State pulled out the nuclear element from the privatisation, justifying—I think—the stance that my hon. Friend the Member for Bedfordshire, North and myself had taken. As a result of including the nuclear power stations in the initial privatisation plan, however, we were left with one power company, National Power, which was larger than it otherwise would have been. It was made large so that it would be able to accommodate the nuclear element designed to go with it. With a large, conventional generating capacity, it would have adequate cash flow and sufficient profits to be able to counter the nuclear side, which would be less profitable, indeed, probably unprofitable. Having decided rather belatedly not to privatise the nuclear side, we had a skew in the size of our power-generating companies: an over-large National Power and probably the right size for PowerGen.

The hesitation that I had just over six years ago has gone. Decommissioning costs are known and we have the technology to decommission nuclear power stations. In any event, the Magnox stations are outside the privatisation proposal. They will be decommissioned within a separate company, as the Secretary of State for Scotland made clear in his opening speech. Nuclear power generation is now very efficient and represents between 20 and 25 per cent. of electricity generated in England, and a far higher percentage—almost 50 per cent.—in Scotland. National Power and PowerGen were sold at a satisfactory price and are operating very well. We have centres of excellence for research and development, where we can develop operating techniques and maintain and develop the skills of work forces. Indeed, we have centres that are also capable of providing training for operatives and employees at two locations, in Gloucester and East Kilbride.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

As the hon. Gentleman knows a great deal about this subject, is he relaxed about the idea that the key safety core of Nuclear Electric should move, as it would have to, to a new headquarters in Scotland?

Photo of Dr Michael Clark Dr Michael Clark , Rochford

I wonder whether the hon. Gentleman would be kind enough to allow me to address that point in due course, because I shall argue in a moment that it should not move to Scotland, which would answer his question. On the intervention that the hon. Gentleman made earlier about the need for a director of safety, of course we want someone—

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

On the holding board.

Photo of Dr Michael Clark Dr Michael Clark , Rochford

On the holding board, indeed. I am sure that the hon. Gentleman will agree, however, that for something as important as safety, no employee, whether he be the most lowly sweeper or the production or finance director, can ever say, "I will not take note of safety because there is a safety director who does it all." Safety, as we all know if we have worked in industry, is a responsibility for every one of us at every stage in the hierarchy. There is nothing wrong with the belt and braces approach of the hon. Gentleman's proposal for a safety director, but a safety director does not absolve any employee from safety consciousness in all that he or she does in the place of employment.

Before the hon. Member for Linlithgow (Mr. Dalyell) intervened, I was saying that we now have transparency of nuclear costs that was not apparent six years ago. Therefore, my right hon. Friends the Secretary of State for Scotland and the Minister for Industry and Energy have been able to propose that we remove the nuclear levy at the same time as proposing privatisation.

Photo of Dr Alan Williams Dr Alan Williams , Carmarthen

I accept that in the past five years the nuclear industry has become much more economic, but the hon. Gentleman must acknowledge that nuclear power stations operate at a distinct advantage because they have a guaranteed base load provision and therefore a guaranteed market for their product. Does he think that that would be fair in a privatised industry, where it should compete with National Power and PowerGen? Does he, as I would assume, think that access to that regular, guaranteed market constitutes unfair competition?

Photo of Dr Michael Clark Dr Michael Clark , Rochford

There is a base load offer to nuclear power stations at the moment, as the hon. Gentleman rightly said. I am not entirely sure what is proposed for the private sector. I would hope that as far as possible we would have true competition in the private sector, in which case market forces would operate and nuclear power would have to compete in the same way as any other power. I do not know what is being proposed. The hon. Gentleman asked me what I would like to happen and I have told him.

I was talking about safety. There is now far greater public confidence in the safety of nuclear power stations. I believe that that has been achieved largely by publicity, openness, visits to nuclear power stations and, indeed, the performance of the power stations themselves. Since the criteria that I put forward in 1988 against the privatisation of nuclear power stations have been removed, it is only natural that I should welcome proposals to privatise the nuclear element—the AGRs and the PWR—and, at the same time, as has already been said, get rid of the nuclear levy.

If we privatise as one large company—I come now to the point made by the hon. Member for Linlithgow—we shall have three principal generators in this country. I know that there are other smaller generators as well. There will be PowerGen, which is probably about the right size, and National Power, which I have already said is larger than it would have been, had other plans been drawn up initially, rather than the plans to include nuclear power stations. Indeed, National Power is already so large that a reference to the Monopolies and Mergers Commission was considered at one time. There is still a possibility that it will be referred to the MMC at some future date.

One such large nuclear electric company would undoubtedly—I agree with the hon. Member for East Kilbride—expand into combined cycle gas turbine power generation. Even if it did not expand that way, it would expand into another nuclear power station. The one thing on which we all agree is that it will expand, whether into gas or nuclear or whether it buys some of the surplus coal-fired generating capacity from PowerGen or National Power. If that one large company expands, it will become almost as large as National Power and we shall have two giants and one medium-sized company, which will reduce competition.

My right hon. and hon. Friends on the Front Bench should think again about having one large company. I suggest that they consider two companies: the north and south option, not necessarily one Scottish and one English company, but what is called by some the "for and for" option. That would increase competition. It would mean that we could avoid references to the Monopolies and Mergers Commission in future. We got it wrong in 1989 and had to correct it. Do not let us get it wrong now so that we have to correct it in future when the company is referred to the MMC.

Finally, if we have just one company with its headquarters in East Kilbride, we shall please neither Scottish Nuclear, which wishes to remain an individual company, nor Nuclear Electric, which wishes to keep its headquarters in Gloucestershire and not move to Scotland. If we had two companies, we could please both the existing companies and probably most of the employees, and we could maintain and perhaps even increase competition.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment) 8:39 pm, 17th May 1995

The Liberal Democrats' position on this issue is clear. We oppose privatisation of the nuclear industry. We have from time to time supported the Government on privatisation and competition measures, such as the changes to British Gas, so we oppose the measure from a perspective not of outright opposition to change but of what is best for the taxpayer and for the environment.

We have heard more than once tonight about the other occasion when the Government, under the previous Prime Minister, considered privatising the nuclear industry. They abandoned that sell-off because nuclear power—although in private hands—would have remained effectively in the public sector". Today, the same Government propose to sell the profitable parts of the industry but to leave the liabilities in the public sector—in effect acknowledging the reason given for not privatising it last time, but coming to a slightly different conclusion and making what they are doing more apparent.

According to the same criteria, I believe that the Government were right the first time and that they are wrong now. The previous attempt at privatisation clarified what had always until then been denied by the nuclear sector—that it was not profitable and could not compete with other forms of power generation, despite having originally been proposed as the cheap form of power for the future. The extraordinary fact is that now, similarly, in the present Government document and plans, we see the clarification of the fact that for the foreseeable future, even according to the Government, nuclear power stations cannot be built, because they cannot possibly generate a sufficient rate of return to allow them to be competitive.

In effect that announces, in any circumstances that we or the Government can foresee, the gradual phasing-out and the end of the nuclear industry. It has changed from being a developing industry building new power stations to one that manages the results of mistaken decisions on previous investment and waste problems.

Photo of Mr Phil Gallie Mr Phil Gallie , Ayr

Will the hon. Gentleman give way?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

I shall make some progress, and then give way to the hon. Gentleman.

The White Paper makes it clear that nuclear power is economically unviable. Indeed, it confirms that the private sector will not build new power stations. Nuclear Electric itself concedes, on purely commercial criteria and given current market conditions, that new nuclear capacity is not competitive with conventional generating stations, so new stations would be unviable. Investment in new nuclear plant would not be justified.

The truth is that, under privatisation, investment in the industry is coming to an end for the foreseeable future.

Photo of Mr Piers Merchant Mr Piers Merchant , Beckenham

Will the hon. Gentleman give way?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

I shall do so in a moment.

Indeed, the French nuclear industry has effectively confirmed that verdict by making it clear in reports issued in the past week that it will not invest in the British nuclear privatisation because it believes that without Government support the industry is in steady decline.

Photo of Mr Phil Gallie Mr Phil Gallie , Ayr

Section 4.49 of the report that we are discussing contains a different conclusion on the prospects for building new nuclear generating stations. It seems to me that there is no chance of such a station being built in the public sector, but that, according to investigations that Nuclear Electric is pursuing, there may be hope that that will come about in the private sector.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

The hon. Gentleman speaks more from hope than from experience, and that is not the conclusion in the document. When the Minister made the statement announcing the policy he conceded that what I have said is correct. Of course he held out the possibility that things might change at some indefinite point in the future that could not be foreseen, but I do not believe that that will happen. Ironically, as policy stands and as things are now, a Conservative Government are to all intents and purposes phasing out the nuclear industry.

Indeed, it is common knowledge—although no public announcement has been made—that the nuclear industry is considering investing in non-nuclear generating capacity and taking part in the dash for gas. So much for the nuclear industry's confidence in its own future.

Amazingly, in view of past history, the Conservative party has announced decisions that will inevitably lead to a cessation of nuclear generation in this country, and to the conversion of the nuclear industry to one that manages waste. Of course, there is the potential for an important role in doing the same for eastern Europe and other parts of the world, so this is not necessarily the end of jobs in the sector, but it is a big change.

The other irony is that the Labour party now seems most confused about what it wants for the future of the nuclear industry. The Labour Members who are here represent a fair selection of those who support the nuclear industry within that party. We do not see many members of the environmental lobby within the Labour party, which is committed to phasing out the power stations.

It is unsurprising, therefore, that when I or Conservative Members have questioned Labour Members, they managed comprehensively to avoid giving a proper answer to the question whether the Labour party planned to phase out the nuclear industry, as had been stated, or whether it meant to keep it or even to develop it. The 1992 Labour manifesto was clear: We will not invest in new nuclear power stations, continue with those in the planning process or extend the lives of existing nuclear stations beyond their safe lifespan. Britain's dependence on nuclear power will therefore steadily diminish. That, however, does not seem to stop Labour spokesmen. The right hon. Member for Copeland (Dr. Cunningham), the shadow spokesman on trade and industry—I notice that he is not here tonight—said on "North of Westminster" in mid-January: I have always supported the civil nuclear industry … we mustn't let people, I mean the anti nuclear people of course, have one objective and that is to close down and wreck the nuclear industry", despite the fact that that appears to be Labour's official policy.

The right hon. Member for Sedgefield (Mr. Blair) recently assured the environmentalists that Labour's green policy, "In Trust for Tomorrow", was still party policy, that he stood by it and that it formed the basis of the current Labour approach to the environment. It says: Labour's energy research effort will be channelled away from the nuclear sector and into clean coal, (as well as renewables) … There remain serious environmental problems associated with nuclear power generation". The document also refers to not building any new nuclear power stations". Yet the hon. Member for Clackmannan (Mr. O'Neill), the shadow energy spokesperson, said in an interview in British Nuclear Forum last autumn that the energy policy set out in "In Trust for Tomorrow" isn't the last word as far as Labour's energy policy is concerned". He followed that up on Radio 4 by saying that commissioning new nuclear power stations remained an option for any future Labour Government.

On 14 March 1995, on Second Reading of the Atomic Energy Authority Bill, Labour's science and technology spokesperson, the hon. Member for Kirkcaldy (Dr. Moonie), said in response to the question whether the new Labour party would build new nuclear power stations: I do not know the answer."—[Official Report, 14 March 1995; Vol. 256, c. 715.] That, at least, was more accurate than what most of the rest of the Labour party has been saying.

Photo of Mr Martin O'Neill Mr Martin O'Neill , Clackmannan

I believe that the hon. Gentleman appreciates that there is richness in diversity. Would he say that there is a monolithic view among the Liberal Democrats? Will he tell us about the views of the hon. Member for Caithness and Sutherland (Mr. Maclennan), who normally attends all debates relating to nuclear matters? Has he been banned from the Chamber this evening?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

The Liberal Democrats' position is clear. I have put it on record, which is more than any Labour Member has been prepared to do tonight. If the hon. Member for Clackmannan wishes to do so later, he can. My party wants to phase out nuclear power. We would continue research into it—we can see the need to do so—but we do not believe that the present nuclear generation capacity is necessary, and we will remove it. I do not think that we could be any clearer than that. I would welcome the hon. Gentleman clarifying Labour's position.

I have no dispute with Labour Back Benchers who have maintained a consistent and clear position and who have argued that they would like Labour policy to be different, but I do criticise Labour Front Benchers who will not say whether they would phase out the industry. They will not say whether they support the policy that they present to environmentalists, or the policy that they present to the British Nuclear Forum. They are saying different things to different people.

Mr. Ingrain:

It may help the hon. Gentleman if I restate the position in relation to the debate that takes place in the Labour party. I was a delegate at the Labour party conference when "In Place of Trust" was passed. I was a delegate from the Transport and General Workers Union, which voted against that policy and will continue to argue against it. I do not speak for that union, which was not the only union to take that position. There is a clear movement towards change, which I expressed and which I hope will prevail. The hon. Member for Caithness and Sutherland (Mr. Maclennan) holds a similar view to me on the matter, and he may be able to convince the Liberal Democrats to take a more sensible approach.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

I make no criticism of the hon. Gentleman, who makes his position and that of the Labour party clear, but Labour Front Benchers are not prepared to do so. Labour looks in two different directions depending on which audience it is addressing, and it is time that it sorted that out.

Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North

The hon. Gentleman has stated the Liberal Democrat party's position, and a document released today clearly says that it is in favour of phasing out nuclear power. When it says "phasing out" nuclear power, does it mean phasing out nuclear stations at the end of their natural lives—as approved by the nuclear inspectorate—or closing them before that?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

We have argued that nuclear power should be phased out by 2020. We accept that the industry could not be closed overnight, and it would be inappropriate to suggest that. We argue for a phasing out over that time.

Photo of Dr Alan Williams Dr Alan Williams , Carmarthen

Will the hon. Gentleman give way?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

I must make progress, and the hon. Gentleman will agree that I have given way a number of times. I am conscious of the pressure of time.

The Labour party does not have a monopoly of confusion on the matter. The Government, while accepting that there is likely to be no new build, still argue the importance of nuclear power and say that taxpayers will benefit from the changes following privatisation. They also argue that the burdens of the nuclear industry will be lifted from the taxpayer and transferred to the private sector. That is comprehensively untrue, and they are not prepared to give figures either.

We are told that the liabilities will no longer fall on the taxpayer, but the full range of potential nuclear accident costs is enormous. For example, the accident at Chernobyl cost £200 billion for immediate damages alone, and funds still cannot be raised to tackle the long-term problems. Similar costs were incurred in the Three Mile island incident.

The overwhelming proportion of such liabilities, however, are not internalised in Britain, because Nuclear Electric need only have liability insurance up to a financial limit of £140 million per accident. The rest is covered by the taxpayer, with the costs of possible accidents falling on our children. If a company has only limited liability for its errors and something goes wrong, it is clear that its liabilities cannot be described as having been internalised.

Most crucially, the Government cannot explain the true profit and loss account facing the taxpayer. When I asked the Minister at the time of the statement what total costs will fall on the taxpayer in future, what the Government's best estimate of the costs associated with cleaning up Magnox are and what revenues are anticipated from privatisation, he was unable to respond. In other words, it is unclear whether this is a profitable exercise for the taxpayer.

The Government intend to end the nuclear levy two years early, reducing domestic electricity bills by 8 per cent. and providing a sweetener to gain public support for privatisation. The justification for the sweetener is that because of increased efficiency the decommissioning costs of Britain's ageing nuclear reactors are one third lower than when the levy was launched, yet the Government concede that they will still have to make up the difference of more than £2 billion, and possibly substantially more if the lower costs suggested are not gained.

In an attempt to allay concern that the taxpayer will have to pay again for decommissioning, Department of Trade and Industry officials said that a combination of cash sources and savings would be sufficient to meet the Magnox liabilities, and that £2.6 billion worth of privatisation proceeds will be used to meet the Magnox liabilities, yet from our knowledge of the costs of decommissioning we know that that cannot be true. We have some idea of the early costs of decommissioning the old Magnox reactors, but we do not have a long-term solution for the most highly radioactive materials. That is still being reviewed and researched.

We have no experience of decommissioning PWRs, and we have no realistic idea of how much it will cost. We do not know when that process will end, or how it will end. Moreover, unless a clear commitment is made to set up a proper segregated Magnox decommissioning fund, the potential cash source of privatisation proceeds may be used for other purposes, such as tax cuts at a general election.

Future taxpayers will be left to foot the huge bill for decommissioning and dealing with radioactive waste. That is effectively what will happen, and the idea that anything else will take place is sheer nonsense. The White Paper says that there is no practical benefit from a segregated fund to meet nuclear liabilities". The truth is that funds from privatisation will be treated as general Government revenue, and will be part of the Government's general accounts. The Government will therefore allow short-term tax cuts at the expense of long-term liabilities for our children.

Even the CBI cannot support that proposal. The Director General of the CBI said in The Guardian on 10 May: We would urge the Government to put the money already raised into a special account to pay for decommissioning the older nuclear stations. As the levy was expected to continue to 1998, we would ask the Government to top up the fund by some of the sale proceeds. Of course the Government cannot rely on the substantial amounts of money from the nuclear levy that has been paid because they have been invested not in decommissioning but in building Sizewell B. The taxpayer will thus be asked to pay twice, yet the benefits of any profit accruing to Sizewell B, once all its liabilities are removed, will accrue to the private sector.

The public have already paid for decommissioning Magnox through the fossil fuel levy on electricity bills, but £1.6 billion was diverted to Sizewell B. It is more than likely that the net income to the Government from this privatisation will be less than the sum invested in Sizewell B, let alone the other advanced gas-cooled reactors that the Government will sell off with it.

Privatisation leaves future generations of taxpayers to foot the bill for decommissioning Magnox stations; to take the risk that decommissioning the others will cost much more than anticipated; to take the risk of how to dispose of highly radioactive material in the future; and to take the risks if there are any accidents—and all to fund the Government's tax cuts now. That cannot be justified.

Future generations are being asked to take one further risk. For the most part, I do not argue that the private sector is necessarily less safe. Provided the highest autonomy is given to the nuclear inspectorate and others, I believe that every effort will continue to be made to keep nuclear power stations safe. The record of those in the industry is good, not just in this country but, in one respect, in others. After all, it was the people who ran Chernobyl who stayed there to stop a much more serious accident at the cost of their own lives.

Photo of Mr Llew Smith Mr Llew Smith , Blaenau Gwent

But those people died as a result.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Environment)

Absolutely. The courage that they showed is nevertheless an example to people.

I do not make personalised attacks on the approach that individuals take but I am concerned about the pressures that the Government are building into the privatisation process. The life of the Magnox stations has already been extended from 25 to 30 years; their average life expectancy is now estimated to be 37 years. In their White Paper, the Government encourage BNFL to optimise the economic life of the stations. The pressure is on further to extend the unsafe use of nuclear power stations. Despite the commitment that individual members of staff may have—at Chernobyl, people lost their lives as a result of that personal commitment to saving others—when such pressure is applied overall and the industry is structured in such a way that the Government seek to extend the life of nuclear stations and cut costs, risks are inevitably taken. By trying to get a return from Magnox stations well beyond their design life and the safe limits of use, lives are put at risk. The very structure of the privatisation is, in the Minister's words, designed to "optimise" the economic lives of the stations and thus extend them beyond what is safe.

This is not a good privatisation. It is not a good deal for the taxpayer. It will cost the taxpayer and potentially put lives at risk. The Government should stop it now and I hope that they will listen to the strength of public opinion in opposition to it.

Photo of John Whittingdale John Whittingdale , Colchester South and Maldon 9:02 pm, 17th May 1995

First, I congratulate the Government on their boldness and wisdom in deciding to privatise two nuclear generating companies. I was originally going to say "courage", but I do not wish to alarm my right hon. Friend the Minister too much.

I had feared that, after the setback which my right hon. Friend the President of the Board of Trade received over his proposal to privatise the Post Office, he might be reluctant to take the risk again. In many ways, the case for privatising nuclear generation is similar to that for privatising the Post Office. Like the Post Office, Nuclear Electric and Scottish Nuclear have dramatically improved their performance in recent years. They have also reached the point where the fetters of state ownership are proving a real constraint on the development of their business.

It would no doubt have been possible to relax the controls to permit greater commercial freedom for the nuclear companies while keeping them in state ownership, but just as that is a second-best solution for the Post Office, it would have been an unsatisfactory solution for the nuclear generators and would still have left them unable to enjoy the full benefits of private sector ownership. The Government are therefore entirely right to opt for full privatisation and I hope that there may yet come a time when the Post Office, too, can enjoy the freedoms that that brings.

Photo of Mr Llew Smith Mr Llew Smith , Blaenau Gwent

If a privatised nuclear company decides to reprocess its spent nuclear fuel at THORP, might not the company, whose only reason for existence is to make money, be tempted to sell off plutonium to the highest bidder? Might not that nuclear sell-off lead to private proliferation? Could we learn something from the trial going on in Germany this week, involving plutonium being smuggled in from Russia purely for profit motives?

Photo of John Whittingdale John Whittingdale , Colchester South and Maldon

I see no reason why that need be the case; it is an example of the kind of scaremongering that is bedevilling the debate. There are rigorous controls against such practice and I do not believe that they will be changed by the privatisation of the nuclear companies.

The privatisation of Nuclear Electric and Scottish Nuclear will be good for the companies; good for the electricity industry; good for electricity consumers and good for the United Kingdom. As a Member representing an English constituency, I should first like to pay tribute to Nuclear Electric on the remarkable turnaround that it has achieved in the past four years. There is no doubt that the company was not in a position to be privatised along with the rest of the industry in 1990. As has already been said, however, since that time output has increased by almost 45 per cent., productivity has doubled and the unit cost of nuclear-generated electricity is down by 40 per cent.

Nuclear Electric is a very different company from the one it was four years ago and there is no longer any doubt that it can be sold. The company has also made a strong case that it should be sold, because it needs full commercial freedom to compete effectively with other generators; to take advantage of the opportunities that exist and to invest for the future.

Photo of Mr Piers Merchant Mr Piers Merchant , Beckenham

Does my hon. Friend agree that Nuclear Electric has shown such a dramatic improvement in the past few years because it has been inspired by the possibility of becoming a private company and realises the benefits to it and the industry from doing so?

Photo of John Whittingdale John Whittingdale , Colchester South and Maldon

My hon. Friend is absolutely right. The company has always made it clear that it believes that it will do better in the private sector and I have no doubt that it has aimed for that objective, with great success, in the past few years.

Privatisation will also be good for the entire electricity industry. Electricity privatisation has been an enormous success and the competition in generation that it has created has brought great benefits to consumers and the companies. The recent success of Nuclear Electric, however, has allowed it to increase its market share to the extent that there has been a creeping renationalisation of electricity supply. Nuclear Electric has already overtaken PowerGen in terms of market share and it may well have soon overtaken National Power if the latter's market share continued to fall. The result of that would have been that the largest electricity generator in the United Kingdom would once again have been publicly owned. That would have posed a real and growing threat to fair competition.

The Government's proposals will mean that the proportion of electricity generated by state-owned companies will now fall to just 8 per cent. and will decline further as the Magnox stations are phased out. The proposals will increase competition in the industry still further. In future there will be competition for the provision of base load supply as well. Both the privatised Nuclear Electric and the Magnox stations will supply the English and Welsh electricity base load and compete against each other.

I understand that some have argued that the amalgamation of Nuclear Electric and Scottish Nuclear will have the effect of reducing competition, but I do not believe that is significantly the case. The Scottish electricity market is largely distinct from the English and Welsh market and the transfer of power through the interconnector is not that great. The additional competition created by splitting the Magnox stations from the other nuclear plant will outweigh the marginal effect caused by the merger.

The increase in competition will also be good news for the electricity consumer. Just as increased competition in the gas industry—the Gas Bill successfully completed its passage through the House yesterday—will exert downward pressure on prices, the same will apply equally to electricity. A more immediate benefit, to which reference has already been made, will also be apparent. The early removal of the fossil fuel levy—itself a tribute to Nuclear Electric's success—will allow electricity prices to fall by a further 8 per cent. It is ironic that that will almost entirely negate the effect of VAT on electricity bills, which will now be substantially lower than they were before electricity privatisation.

The United Kingdom will benefit from privatisation as Nuclear Electric will be well placed to take advantage of the growing international market for the construction of nuclear generating plant. The British Nuclear Forum has estimated that market to be worth about £500 billion over the next 25 years.

As we know, more and more countries are turning to nuclear power, particularly on the Pacific rim. Nuclear Electric already has an extremely good record, and can point with pride at such achievements as the completion of Sizewell B, on time and below budget. With BNFL, it is rightly seen to be at the forefront of nuclear technology. If Nuclear Electric succeeds in its bid to build a similar power plant in Taiwan, in conjunction with Westinghouse, that alone will create 5,000 jobs for British firms.

Hon. Members have expressed fears that safety could be compromised in a privately owned nuclear company. I reject that argument. The British nuclear industry is one of the most tightly regulated in the world, and that will remain the case. When I get up each morning in my constituency and look out of my bedroom window, the dominant feature of the landscape that I see just three or four miles away is Bradwell nuclear power station: I am therefore extremely conscious of the importance of nuclear safety.

I have also had an opportunity to see at first hand the rigorous inspections and checks that took place at Bradwell before it was granted a 10-year extension of its operational life by the nuclear installations inspectorate. To achieve that, Nuclear Electric had to design and build new equipment such as the "snake", which allows remote ultrasonic inspection of the welds on the pressure vessel. I was pleased to be able to sponsor an exhibition in the Upper Waiting Hall quite recently, which enabled hon. Members to see something of the technology involved.

I understand and accept the reasons why Magnox stations such as Bradwell cannot be included in the privatisation. Inevitably, they are now reaching the end of their lives, and substantial costs will need to be met in their decommissioning. Bradwell is the oldest Nuclear Electric station that is now operational, having generated electricity since 1962. Those who work there know that it will have to close in due course—although I hope that it will be kept running for as long as that is safe and economically viable.

I am encouraged by the assurance that BNFL—which will in due course assume responsibility for the Magnox stations—has already given in that regard. I hope that the new position will allow the station a slightly longer life than it would have had if it had remained part of Nuclear Electric. Even when it does close, the decommissioning process itself will generate continuing employment at the station.

Let me end by repeating the concern that I raised last week with my right hon. Friend the President of the Board of Trade. Today, 397 people—many of whom are my constituents—work at Bradwell power station.

Photo of Dr Michael Clark Dr Michael Clark , Rochford

Some are my constituents.

Photo of John Whittingdale John Whittingdale , Colchester South and Maldon

I acknowledge that. Those people have never doubted that the station will close in the foreseeable future; however, they are highly skilled people, many of whom will wish to continue to work in the nuclear industry. They represent a body of expertise that the country cannot afford to lose. Transfer to BNFL may open up new job opportunities, but they currently feel that they are being cut adrift from their parent company and that future employment opportunities—opportunities that they previously had—may be jeopardised.

It would clearly be impossible to guarantee those people jobs at BNFL, Nuclear Electric or any other company. I hope, however, that my right hon. Friend the Minister will consider ways of ensuring that they are not disadvantaged by the transfer. They should have the same opportunity to apply for other jobs within Nuclear Electric as they would have had if they had continued to be part of the company. I accept that the details will need to be worked out, but I ask my right hon. Friend to bear my points in mind in the coming months as he implements a policy that I strongly support.

Photo of Alan Simpson Alan Simpson , Nottingham South 9:13 pm, 17th May 1995

I was amazed at the parallels drawn by the hon. Member for Colchester, South and Maldon (Mr. Whittingdale), who has just spoken. In his opening remarks he made connections between the proposals for privatisation of the Post Office and those relating to the nuclear industry. Although the hon. Gentleman may find it difficult to understand the difference, members of the public, however, have no difficulty in understanding the distinction between having a post office at the end of the street and having a nuclear power station there—or the relative desirability of having one rather than the other.

I welcome this debate in one important respect. I do so as an implacable opponent of the nuclear industry as a whole. The debate, however, allows us to explore the shabby and fraudulent financial basis on which the industry is constructed. The Government may be glibly off in pursuit of what they see as short-term pay-offs for the sale of the industry, but if we compare those with the long-term costs and consequences that the public will have to pay, we find that the pay-offs are dwarfed by the long-term costs.

I am grateful to the hon. Member for Truro (Mr. Taylor), who sought to provide some sort of profit and loss analysis of the transaction. For any sale in the world outside one would do exactly the same; taking stock of the money obtained in return for current capital assets and trying to cover the costs, at least, of the residual responsibilities that have to be borne.

We are told that the Government hope that privatisation will raise about £3 billion. It is against this figure that we must compare costs and losses. I am grateful to Scottish Nuclear for its clear calculations on the current construction costs of the nuclear power stations. It has said that the cost for Hunterston B would be £1 billion and Torness, £2.7 billion. I had to turn to the Government's figures for the current construction costs for Sizewell B, which amount to about £4 billion.

Beyond that, it has been difficult to gain any idea of the current construction costs for Nuclear Electric's advanced gas-cooled reactors from the figures in its annual accounts. If I am generous and assume that they would be only of the order of the lower costs of Scottish Nuclear's Hunterston B plant, we are still talking about a further £5 billion. That would require a break-even point on the transaction of £12.7 billion. If we add into this account the residual clean-up costs that the Government will retain, in terms of the disposal and decommissioning of the Magnox reactors, we must add the Government figure of a further £9 billion.

If we consider the rudimentary exchange which one would expect to find in the marketplace, we realise that, in exchange for cash receipts today of £3 billion, the Government are prepared to write off £19 billion. That is simply the capital cost. If we then build in the continuing costs that will have to be met, the figure is even worse. On page 54 of the report that the Government issued in advance of their proposals they make it clear that the National Audit Office report on the costs of decommissioning nuclear facilities published in 1993 estimated that the gross lifetime cost of discharging nuclear liabilities is well in excess of £40 billion. In response, we are told by the Government that privatisation will reduce the costs of future liabilities. Reality suggests that those costs have always been hidden, will always be rising and will always be higher than we have ever been willing to acknowledge. Those costs will accumulate for the next 100 years at least. At this point I was reminded of the words of Mr. Micawber in "David Copperfield". He said: Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. If Mr. Micawber was looking at these figures, however, he would be talking not about misery, but of madness. That is the scale of the costs that the public will have to face, not simply in my children's lifetime, but for generations to come.

The costs are bizarre and unacceptable, and to offset them the Government are offering the public a £20 sweetener. We should set that sweetener in context. The fossil fuel levy is being cancelled only 18 months before it was due to run out anyway. Let us examine the scale of the Government's generosity. The Library has provided me with figures about the amount of money that the levy has raised. It pointed out that in the years from 1990–91 to 1993–94, the levy raised £1.17 billion, £1.32 billion, £1.34 billion and £1.23 billion respectively.

In that period, in excess of £5 billion has been paid to Nuclear Electric for decommissioning. It is interesting that those levy payments appear in the accounts of Nuclear Electric not in the form of a fund to deal with decommissioning, but as part of its current profit and loss statements. The money has not been set aside for decommissioning purposes. Anyone who has any doubts about that should read the answer that the Minister gave during the debate on 2 March this year when he explained clearly that Nuclear Electric's income from the fossil fuel levy was not hypothecated to any particular activities. That means that the money has not been put aside to cover decommissioning; it has been used to meet current costs.

We have also been told that the nuclear industry is extremely profitable, with a turnover of more than £1 billion per year. At this point, I draw the attention of the House to an analysis provided by Greenpeace. It states: Nuclear Electric alone has liabilities of over £27 billion for its nuclear waste and decommissioning … Every penny that the industry would ever earn is already spoken for to deal with the radioactive mess". That means that, if the proceeds of privatisation are spent on tax cuts, the taxpayer will have to find the money again. In fact, I suspect that the taxpayer will pay for it again and again and again, because the money has not been put aside for decommissioning.

We are also told that we may be able to defer the decommissioning issue; that it is a 100-year issue. The sad truth is that it may not be. Less than a month ago, on 26 April, we remembered the ninth anniversary of the Chernobyl disaster. I wish to put on record the cost of that disaster in cash and human terms. Some 8,000 people in the Kiev area have died as a result of the Chernobyl explosion. Some 250,000 people are disabled or seriously ill. Thyroid cancers have risen 800-fold and one in four children born since Chernobyl has birth defects. Orphanages in the country are full of children whose parents could not cope or who simply died. More than 2,000 towns and villages in Belarus have had to be evacuated and 84,000 people from the region still await resettlement. A further 16,000—the lucky ones—have been squeezed into high-rise apartments in Minsk. That is the human cost of the disaster.

In addition to that, the Government of the Ukraine are having real difficulties meeting the commitments that they made to close down the entire Chernobyl plant by 2000 because they cannot afford to meet the cost. They face that cost today. Would the City bear such a cost in the Government's proposed privatisation? I remind the House that on 7 March this year when the electricity regulator, Stephen Littlechild, referred to a proposal to review electricity prices there was an immediate 17 per cent. fall in the share prices of the electricity utilities. Capital does a runner when anything threatens the profits; when anyone mentions increased responsibilities, the profiteers do a bunk. That is what would happen in a privatised nuclear industry.

Photo of Mr Llew Smith Mr Llew Smith , Blaenau Gwent

On the question of profits, does my hon. Friend agree with the hon. Member for Colchester, South and Maldon (Mr. Whittingdale), who said that the safeguards were strong enough to prevent the sale of plutonium to the highest bidder? Does my hon. Friend think that we have something to learn from the alleged smuggling of plutonium into Germany?

Photo of Alan Simpson Alan Simpson , Nottingham South

The experience of what happened in Germany and the trial that is taking place of those who attempted to smuggle enriched uranium and plutonium out of the Soviet Union is an object lesson to us all and we should be terrified. I feel no safer because of those security guarantees.

There will be no guarantees, however, that the City will meet the costs of the long-term obligations for decommissioning that are inevitably and inextricably linked with the industry. The threatened privatisation of the nuclear industry is an act of irresponsibility verging on lunacy, and for that reason the proposals must be opposed in the House and stopped in the country.

I am absolutely clear that outside this Chamber the public reaction will call a halt to the madness of privatising the nuclear industry, and the notion that we can discharge the nation's long-term responsibilities and sacrifice them on the altar of the short-term profitability that the Government are seeking.

It may be the lifeline that the Government need to survive, but the public have already drawn a line against this. They would not continue to pretend that the nuclear industry would ever be viable if it were separated from the nuclear weapons industry and linked instead to the long-term environmental costs that it has to bear. The public would say, as we do, that the proposed privatisation is no more than an attempt to sell a nuclear pig in an everlasting environmental poke. Such folly is not acceptable in the House or in the country.

Photo of Mr Douglas French Mr Douglas French , Gloucester 9:25 pm, 17th May 1995

At the centre of the privatisation, if I am allowed to view it from England rather than Scotland, is Nuclear Electric, and at the centre of Nuclear Electric are my 900 constituents working at the headquarters in Barnwood in Gloucester.

My right hon. Friends the President of the Board of Trade and the Minister of State will know from my discussions with them in the past week how dismayed I have been at the lack of reliable and unambiguous information about the future of the work force at Barnwood. My views reflect the anxieties of my constituents and it is not surprising that they feel anxious.

My constituents waited a long time for the nuclear review, but when it arrived, nowhere in its 93 pages did Barnwood get a mention. My right hon. Friend the President of the Board of Trade made a statement in the House on 9 May. Nowhere in that statement was any mention made of Barnwood.

The statement was strong on the commercial case for privatisation, which I accept is persuasive, but the business consists also of people—skilful, loyal, hardworking and dedicated people who should not be taken for granted. Without their past efforts, the business would not be where it is. Without their future efforts and skills, privatisation will not succeed.

Hon. Members have referred to the success story of Nuclear Electric in the past five or six years. It is worth reflecting that in 1989 the performance of AGRs was very poor; now it is the best in the world. In 1989, the company faced the considerable hurdle of constructing and operating Sizewell B—it was a step into the unknown. Six years later, Sizewell B has been built to time at the cost anticipated and successfully commissioned.

In those six years, the unit costs for electricity, which were 5.2p per kWh, have been reduced to 2.7p per kWh. Output per man at Nuclear Electric has virtually doubled and the operating loss, which was about £1.1 billion six years ago, is now down to £35 million and destined to go into surplus.

The business has certainly achieved considerable success.

Photo of Michael Clapham Michael Clapham , Barnsley West and Penistone

Does the hon. Gentleman agree that the facts he has just advanced support the argument that the social purposes cannot be advanced by introducing a profit incentive in the industry?

Photo of Mr Douglas French Mr Douglas French , Gloucester

No, I do not accept that argument at all and I shall explain why in a moment.

I was pointing out the considerable success that the business has achieved as a result of the substantial efforts of the people who work for it. I was pleased that that was acknowledged in broader terms at paragraph 9.14 of the review. But the success has not happened by accident. It has happened because of the considerable efforts of the employees at Barnwood.

For many of those employees, that success has been achieved against a background of great uncertainty and dislocation. Many of them had an unsettling time when the changeover took place from the Central Electricity Generating Board. Some had a spell at National Power. Some have moved several times within Nuclear Electric, especially from Knutsford. They have seen the number of jobs steadily shrinking while waiting for the review. They had a legitimate expectation that the review would map out a clear future. Arguably, it does commercially, but for the people who have been dogged by uncertainty up to now, it marks the beginning of a further period of uncertainty and they are entitled to know where they stand.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

Will the hon. Gentleman give way?

Photo of Mr Douglas French Mr Douglas French , Gloucester

If the hon. Gentleman will forgive me, I will not because I have to conclude by a particular time.

We have been told that 100 jobs will be created in Scotland to cover the financial and legal functions of head office. I seek from my right hon. Friend the Minister tonight an assurance that a significant proportion of that 100 will be additional local Scottish recruitment and that 100 new jobs in Scotland does not automatically mean 100 lost jobs at Barnwood.

I seek an assurance also that there is no validity in the claim that 300 people are about to lose their jobs in Barnwood. I know of no basis in fact to substantiate that claim, but it has gained currency. I should like an assurance that there is no basis in fact.

I also need an assurance from my right hon. Friend that deep and careful thought will be given to the future of Magnox and those who work on it. I realise that it is difficult to privatise Magnox stations because they will not generate enough cash during their remaining lifetime to meet accrued liabilities. I see risks in Magnox being a stand-alone company because, once the AGRs and the PWRs are split off, the income stream will be insufficient to meet liability. It would have been preferable for Nuclear Electric to contract to run the publicly owned Magnox stations on behalf of the Government. I share the disappointment of the chairman, John Collier, that that formula was not adopted.

I do know, however, that decommissioning Magnox requires expertise that is available only at Barnwood. Therefore, I ask my right hon. Friend for an assurance that every possible effort will be made to keep that expertise at Barnwood. Whether Magnox is a stand-alone public company or in time comes to be linked to British Nuclear Fuels Ltd., there is nothing to stop it being located in Gloucester and every reason why it should be located there.

All privatised companies have spread their wings in overseas markets. There is a growing international market for nuclear power, as my hon. Friend the Member for Colchester, South and Maldon (Mr. Whittingdale) spelt out so clearly. There are bids to build a nuclear power station in Taiwan, and that is only the beginning of the possible export opportunities. South Korea, China, the Pacific rim, as my hon. Friend pointed out, are all exciting opportunities.

Photo of Mr Douglas French Mr Douglas French , Gloucester

Latin America, as well.

If those opportunities are seized, the business overall will be immensely strengthened and jobs made much more secure. But an essential prerequisite for getting the business will be technical expertise. I therefore seek an assurance from my right hon. Friend the Minister that a battle will be fought to win export business because that is the way to strengthen job opportunities for those who have technical expertise, and technical expertise is essential if export business is to be won.

I believe that Nuclear Electric's business is likely to be more successful in the private sector than in the public sector. I certainly do not support the Opposition's disgraceful motion, which strikes me as a blindly political diatribe in clause IV mode, and which does not begin to map out a future for Nuclear Electric but seeks only to cling to the past.

I know that my right hon. Friend the Minister will appreciate that I need some reliable assurances on the issues that I have drawn to the House's attention before I can support him in the Lobby tonight.

Photo of Mr Martin O'Neill Mr Martin O'Neill , Clackmannan 9:34 pm, 17th May 1995

The short debate has enabled several hon. Members to express legitimate constituency worries. Indeed, the hon. Member for Gloucester (Mr. French) has just expressed anxieties about certain aspects of the merger from a different angle from that which Opposition Members would choose—but legitimate none the less.

What was interesting in the debate was the absence of any of the usual arguments in favour of privatisation. No Minister or Conservative Member has argued that the work force should be cut because the nuclear power industry is a bloated, overstaffed nationalised industry. We know that, since it was split off from the Central Electricity Generating Board, the work force has been cut by about 50 per cent. for the English stations and 25 per cent. for Scottish Nuclear. Indeed, there have been about 8,000 voluntary redundancies, so the labour force issue does not arise.

The issue of inefficiency in the public sector does not arise. The most up-to-date figures, published by Scottish Nuclear a few days ago, show that unit generating costs have decreased to 2.2p per kWh from 2.9p per kWh in 1993–94. Power output has increased to an all-time record of 16.9 TWh and output per employee has increased by about 32 per cent. in that time.

In some respects that is because, for the first time, the nuclear industry has been free of the shackles of the CEGB and has been able to concentrate on its own affairs and to tackle the genuine problems of the advanced gas-cooled reactor and to make it an efficient and safe form of generating nuclear power.

The Government repeatedly trot out arguments in favour of privatisation to the effect that the companies will cease to be a burden on the taxpayer. The short-sightedness of the Government is revealed by the fact that those companies contribute about £100 million per annum to the taxpayer.

We are told on occasions that we need privatisation to introduce good, commercial management, yet the figures that I have quoted would not exist, were it not for the quality of the management and the way in which they have been able to work with the labour force to produce the achievements that I described.

The hon. Member for Gloucester mentioned the freedom to seek business abroad, yet Nuclear Electric has been working with American consortiums to secure a Taiwanese contract. They were "down to the wire", as the saying goes, and they have now been told that they must rebid, but it was obvious that Nuclear Electric in the public sector was perfectly capable of associating with private companies abroad and of making a great success of one of the most highly competitive contract processes that has ever occurred in the energy business.

We hope that, regardless of who owns Nuclear Electric, that work will come to Britain, because it is vital not only for people who work in the power stations but for those who work in the electricity supply and equipment supply industries, in which there are so many manufacturing jobs throughout the country.

Should there be freedom to seek investment in the market? Paragraph 4.41 of the White Paper refers to the fact that, with borrowing in the public sector at 8 per cent., if a new power station were built, the price of its electricity would be 2.9p per kWh. However, we know that that money will not be forthcoming from the Government. If the industry goes to the market, it will have to borrow at an interest rate of at least 11 per cent., which would put the price of a unit of electricity in a new power station at about 3.7p per kWh. No one has suggested tonight that anyone will invest in new nuclear power stations if the price of electricity is that envisaged in those figures. The Government have said: Private finance for a new nuclear station is unlikely to be forthcoming without a transfer of nuclear specific risks away from private investors to another party in the project. The other party in the project would have to be the taxpayer, and it would have to be at substantial subsidy. No one is prepared to advocate that case.

Faced with such quantifiable problems, the Government have decided to keep the ageing Magnox stations in the public sector, with us, the taxpayers, picking up the bill for decommissioning and waste management. Let us face it—that will be no paltry sum. The Engineers and Managers Association, the trade union of the power station bosses, has noted that the nuclear liabilities of the two companies amount to about £10 billion. That discounted figure was largely accounted for by Magnox decommissioning.

The money that electricity consumers paid to fund the work has been swallowed up, either by Sizewell B or by work on the advanced gas-cooled reactors, to which I referred earlier. Some of it may have been paid to the national loans fund and found its way into the financing of tax cuts.

The likely sum to be raised from privatisation is about £2 billion to £3 billion. That would probably afford a 1.5p cut in the tax rate. Taxpayers will be left to fund some £10 billion in decommissioning liabilities. That will work out at a cost of about £700 for every household in the land. We will be left with a holding company, supposedly based in Scotland, and perhaps in Edinburgh, although my hon. Friend the Member for Linlithgow (Mr. Dalyell) understandably argued that it should be based at Peel park, and there seems to be some logic to that.

Consideration must be given to the fact that, apparently, there will be premises in Gloucester and in London. If there were a split in the management structure, it would be attractive for the new management team to base itself ultimately in London, although the new chairman, Mr. John Robb, whose appointment was announced this evening, comes from Edinburgh. He seems to be eminently qualified to operate the nuclear industry's accounting system, in so far as he is chairman of Horserace Betting Levy Board. I do not know what other qualities he brings to these matters. We shall have to wait to see how long he is in post, because the holding companies have a somewhat chequered history.

If the stations are to achieve any further reductions in operations, and if the new chairman is to be able to deliver the goods, I suspect that the first casualties of the new order will be the same casualties that have emerged in the other energy privatisations—the research and development functions. They are important in that, in the nuclear industry, they have been closely linked to safety arrangements.

In Britain, the research that has been undertaken and the safety culture that has been a feature of the industry have been the real successes of the nuclear industry. Some speeches tonight, especially that of the hon. Member for Truro (Mr. Taylor), were scaremongering and alarmist about the nature of the nuclear industry. Flippant comparisons have been made between the nuclear industry in Britain and that in the former Soviet Union. It is like comparing a Jaguar car at its best with an inefficient, clapped-out old Lada, with exactly the same care and attention given to the safety and maintenance of Ladas as are showered on cars such as Jaguars.

In part, the safety culture will remain—we do not deny that, but we doubt whether the research and development emphasis will be what it was in the past. If that culture and the mass of big science abilities are not kept together, the nuclear installations inspectorate will encounter difficulties in trying to maintain high safety levels, which will be expensive and dangerous to secure. In the United States, the industry operates in a different way. Its safety regulatory body is now a massive bureaucracy.

We need assurances from the Government that they will insist that the science and research elements which are critical to the industry will remain. The Government have used a great deal of ingenuity and have given a great deal of attention to triple-locking arrangements for the location of an office. Many of us are anxious that they should give as much attention to the location of the laboratories and the safety centres which are such an integral part of our industry.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

I am sure that my hon. Friend will acknowledge the point made by the hon. Member for Gloucester (Mr. French) about the skills of the Magnox staff at Barnwood. Does my hon. Friend share my concern at the fact that we have heard very little from the Government about their intentions for the science base at Berkeley technology centre?

Photo of Mr Martin O'Neill Mr Martin O'Neill , Clackmannan

I understand my hon. Friend's concern because that is an important employer in the north-west and it is—

Photo of Mr Martin O'Neill Mr Martin O'Neill , Clackmannan

I apologise. I am so accustomed to my hon. Friend defending the rights of his constituents that I assumed that that part of the nuclear industry was located in his constituency.

My point remains; we are talking about big science and important research projects. We are talking about spin-offs which relate directly to nuclear safety—an area in which Britain can claim some credit for having a good record and not being complacent.

We want to know whether those things will be sustained and whether other problems will be dealt with. Will the competition issue be dealt with? I do not look to the Minister for much consolation there, but I look to the Director General of Electricity Supply. He ducked out the last time when the second tranche of PowerGen and National Power was being floated. He should have made a reference to the Monopolies and Mergers Commission, but he did not. He is now trying to make the best of a bad job by persuading them to divest themselves of some power stations to try to create more competition. If he wants competition, he should ensure that the privatisation scheme is subject to a view from the Monopolies and Mergers Commission.

We must take account of the arrangements that exist in Scotland where the must-take arrangement will be transferred from a public sector company to a private sector company. It will be interesting to see whether the North of Scotland Hydro-Electric Board and Scottish Power will be as keen to operate under the must-take arrangements regardless of price and whether they will seek a judicial review. It is reasonable to assume that there will be a number of legal or quasi-judicial obstacles in the way of this privatisation if the interests of the taxpayer and electricity consumers are to be properly protected.

We do not believe that the privatisation of the industry will make no difference. We believe that it is essential that the industry remains in the public sector. We know that the public have deep-seated, if not always correct, views on the issue of nuclear safety. What is more, we want to be certain that this debate will not be the last opportunity that the House has to debate the privatisation of the nuclear industry.

We recognise that this is the last gasp attempt of the Government to rustle up a few bob in the short term to provide money for bribes before an election. I do not think that the public will be taken in by that. As hon. Members go about the country and hear what their constituents feel about this privatisation, they will be clamouring for another vote. Before the Minister sits down, we want him to tell us that there will be other votes on this issue and that there will be the broadest possible consultation, such as that to which the Prime Minister referred when he came to Scotland last week. Before any subsequent votes, we want to see that there is still an opportunity for us to finish this debate and to finish privatisation. We will do that by going through the Lobby this evening to ensure that we get the vote that we want and end any threat of privatisation to an industry that is currently serving the country very well.

Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North 9:49 pm, 17th May 1995

The remarkable thing about the speech of the hon. Member for Clackmannan (Mr. O'Neill), like that of his hon. Friend the Member for Hamilton (Mr. Robertson), was that he said not a word about the Labour party's policy on nuclear power. Indeed, he was about as forthcoming and knowledgeable on Labour party policy on nuclear power as he was about the geography of the United Kingdom when he seemed to think that Berkeley was in the north-west.

My hon. Friend the Member for Gloucester (Mr. French) is understandably concerned about the interests of his constituents at Barnwood. He also rightly—and almost alone among hon. Members—paid tribute to the work done by the management and staff of Nuclear Electric. He asked me for certain assurances about the staff at Barnwood. First, I can tell him quite categorically that the transfer of work from England to Scotland with regard to Barnwood certainly represents fewer than 50 jobs which might go to Scotland. Secondly, he was concerned about the rumours which had apparently got round at Barnwood about some 300 job losses. I can tell him that those rumours are completely unfounded.

My hon. Friend also raised the issue of the location of the headquarters of the new Magnox company and the employees who would support it. I have taken very careful note of what my hon. Friend said tonight and what he has said to me and my right hon. Friend the President of the Board of Trade during the past few days. I have raised this matter with Nuclear Electric, which has assured me that it will pay the greatest attention to the welfare and convenience of staff in taking decisions about locations.

I also assure my hon. Friend that he and his constituents will get an opportunity to argue their case as part of Nuclear Electric's normal consultative processes. I will also draw his concern to the attention of the chairmen of the holding company and of the new company, when it is established, which will deal with the Magnox stations.

My hon. Friend the Member for Colchester, South and Maldon (Mr. Whittingdale) also raised concerns of behalf of his constituents. I assure him that I have taken careful note of them and will reflect them in my discussions with management.

My hon. Friend the Member for Gloucester asked about the future of the export business. I attach tremendous importance to export opportunities, both for Nuclear Electric and for BNFL and I regard that as a major opportunity for the UK.

My hon. Friend the Member for Colchester, South and Maldon and, in particular, my hon. Friend the Member for Rochford (Dr. Clark), raised issues and expressed concern about competition. The Scottish electricity market, in effect, operates separately from the electricity market in England and Wales. The nuclear generators operate in the base load element of that market, and in practice base load competition in England and Wales will be increased as a result of the spinning out of the new Magnox company. Far from competition being reduced, it is my very strong belief that these proposals will enhance it.

The hon. Member for Cunninghame, North (Mr. Wilson) also raised that issue. He, of course, did not say that he had received a letter from Professor Littlechild on the subject when he indicated, broadly speaking—and I stress broadly—that he accepted the argument about increased base load competition in England and Wales. Getting more competition in generation, especially in marginal plants, and setting the pool price remains an important objective. The undertakings that the director general negotiated last year with National Power and PowerGen about the disposal of plant are an important part of that process. I support the initiatives that the director general took then and look forward to a successful outcome.

Much has been said about safety in this debate. Some Opposition Members have attempted to raise what I can only call safety scares. That is despite the fact that the Government have said clearly, and my right hon. Friend the Secretary of State has said specifically, that safety will be paramount and despite the fact that the nuclear installations inspectorate serves under the tripartite Health and Safety Commission on which, of course, the unions are represented.

The HSC's evidence to the nuclear review made it clear that the safety regime could cope with any restructuring of the industry. Indeed, the nuclear installations inspectorate has made it clear that the safety regime already operates at private sector nuclear sites. Such sites have been operating under the present regime for a number of years, including the period when the right hon. Member for Chesterfield (Mr. Benn) was Secretary of State for Energy.

Much has been said about the alleged threat to Scotland and to Scottish Nuclear from our proposals. Where is that threat? The creation of 100 high-quality jobs in Scotland is certainly no threat. A new world-class company is to be headquartered in Scotland and there will be an effective triple guarantee that the company will stay in Scotland. A Scottish chairman has also been appointed to the holding company. That is no threat to Scotland. There is a reduction in electricity prices for domestic consumers in Scotland—where is the threat in that? My right hon. Friend's announcement is good news for Scotland.

The Labour party has consistently opposed privatisation and the benefits which have flowed to the consumers from it. I will spell out to Opposition Members what those benefits are. First, they will benefit from the lifting of the nuclear levy. In England and Wales, domestic electricity consumers will save on average more than £20 as a result of the announcement. Consumers are already paying £13 less in real terms than they were before privatisation. Another £11 reduction in their bills is in the pipeline, and that is before any further tightening of price controls. The newspapers also tell us that the flotation of the National Grid could bring a one-off bonus of around £30 to consumers.

To sum up, therefore, our privatisation policy for the nuclear industry and for the traditional non-fossil fuel generating industry could eventually produce a saving of no less than £75 for the average electricity consumer in England and Wales in this year alone. Put into perspective, that amounts to 25 per cent. of the average electricity bill in England and Wales saved in one year. That saving would not have been made but for the Government's commitment to the privatisation of the electricity industry and the additional privatisation of nuclear electricity.

We know that the Labour party opposes privatisation for the sake of old socialist dogma, but we do not know what the Labour party's policy is on nuclear power. Its manifesto states: We will not invest in new nuclear power stations". To be fair to the hon. Member for East Kilbride (Mr. Ingram), he made it clear that he stood as a Labour party candidate at the last election while not believing a word of his own party's manifesto with regard to nuclear power. He said that he would fight and fight again to change Labour party policy. The hon. Member for Hamilton refused to say what Labour party policy was, as did the hon. Member for Clackmannan. The only honest man on the Opposition Benches seems to be the hon. Member for Kirkcaldy (Dr. Moonie): when I pressed him on Labour party nuclear policy in a previous debate, he said that he did not know the answer.

Privatisation is good for the consumer, good for the nuclear industry and it should be approved by this House.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 252, Noes 284.

Division No. 151][10.00 pm
AYES
Abbott, Ms DianeCummings, John
Allen, GrahamCunliffe, Lawrence
Anderson, Donald (Swansea E)Cunningham, Jim (Covy SE)
Anderson, Ms Janet (Ros'dale)Cunningham, Rt Hon Dr John
Armstrong, HilaryDalyell, Tam
Ashdown, Rt Hon PaddyDavidson, Ian
Ashton, JoeDavies, Bryan (Oldham C'tral)
Austin-Walker, JohnDavies, Rt Hon Denzil (Llanelli)
Banks, Tony (Newham NW)Davies, Ron (Caerphilly)
Barnes, HarryDenham, John
Barren, KevinDewar, Donald
Battle, JohnDixon, Don
Bayley, HughDonohoe, Brian H
Beckett, Rt Hon MargaretDowd, Jim
Beggs, RoyDunnachie, Jimmy
Beith, Rt Hon A JDunwoody, Mrs Gwyneth
Bell, StuartEastham, Ken
Benn, Rt Hon TonyEnright, Derek
Bennett, Andrew FEtherington, Bill
Bermingham, GeraldEvans, John (St Helens N)
Berry, RogerEwing, Mrs Margaret
Betts, CliveFatchett, Derek
Boateng, PaulFaulds, Andrew
Bradley, KeithField, Frank (Birkenhead)
Bray, Dr JeremyFlynn, Paul
Brown, Gordon (Dunfermline E)Foster, Rt Hon Derek
Brown, N (N'c'tle upon Tyne E)Foster, Don (Bath)
Bruce, Malcolm (Gordon)Foulkes, George
Burden, RichardFraser, John
Byers, StephenFyfe, Maria
Caborn, RichardGalbraith, Sam
Callaghan, JimGalloway, George
Campbell, Mrs Anne (C'bridge)Gapes, Mike
Campbell, Menzies (Fife NE)Garrett, John
Canavan, DennisGerrard, Neil
Chidgey, DavidGilbert, Rt Hon Dr John
Chisholm, MalcolmGodman, Dr Norman A
Church, JudithGodsiff, Roger
Clapham, MichaelGolding, Mrs Llin
Clark, Dr David (South Shields)Gordon, Mildred
Clarke, Eric (Midlothian)Graham, Thomas
Clarke, Tom (Monklands W)Grant, Bernie (Tottenham)
Clelland, DavidGriffiths, Nigel (Edinburgh S)
Clwyd, Mrs AnnGriffiths, Win (Bridgend)
Coffey, AnnGrocott, Bruce
Cohen, HarryHain, Peter
Connarty, MichaelHall, Mike
Cook, Frank (Stockton N)Hardy, Peter
Cook, Robin (Livingston)Harvey, Nick
Corbett, RobinHattersley, Rt Hon Roy
Corbyn, JeremyHenderson, Doug
Cousins, JimHeppell, John
Cox, TomHill, Keith (Streatham)
Hinchliffe, DavidO'Brien, William (Normanton)
Hodge, MargaretO'Hara, Edward
Hoey, KateOlner, Bill
Hogg, Norman (Cumbernauld)O'Neill, Martin
Home Robertson, JohnOrme, Rt Hon Stanley
Hood, JimmyParry, Robert
Hoon, GeoffreyPearson, Ian
Howarth, George (Knowsley North)Pike, Peter L
Howells, Dr. Kim (Pontypridd)Pope, Greg
Hoyle, DougPowell, Ray (Ogmore)
Hughes, Kevin (Doncaster N)Prentice, Bridget (Lew'm E)
Hughes, Robert (Aberdeen N)Prentice, Gordon (Pendle)
Hughes, Roy (Newport E)Prescott, Rt Hon John
Hughes, Simon (Southwark)Primarolo, Dawn
Hutton, JohnQuin, Ms Joyce
Illsley, EricRandall, Stuart
Ingram, AdamRaynsford, Nick
Jackson, Glenda (H'stead)Reid, Dr John
Jackson, Helen (Shef'ld, H)Rendel, David
Jamieson, DavidRobertson, George (Hamilton)
Janner, GrevilleRobinson, Geoffrey (Co'try NW)
Jones, Barry (Alyn and D'side)Roche, Mrs Barbara
Jones, Jon Owen (Cardiff C)Rogers, Allan
Jones, Lynne (B'ham S O)Rooker, Jeff
Jones, Martyn (Clwyd, SW)Rooney, Terry
Jowell, TessaRoss, Ernie (Dundee W)
Kaufman, Rt Hon GeraldRowlands, Ted
Keen, AlanSalmond, Alex
Kennedy, Charles (Ross,C&S)Sedgemore, Brian
Kennedy, Jane (Lpool Brdgn)Sheerman, Barry
Khabra, Piara SSheldon, Rt Hon Robert
Kilfoyle, PeterShore, Rt Hon Peter
Kirkwood, ArchyShort, Clare
Lestor, Joan (Eccles)Simpson, Alan
Lewis, TerrySkinner, Dennis
Litherland, RobertSmith, Andrew (Oxford E)
Livingstone, KenSmith, Chris (Isl'ton S & F'sbury)
Lloyd, Tony (Stretford)Smith, Llew (Blaenau Gwent)
Loyden, EddieSmyth, The Reverend Martin
McAllion, JohnSoley, Clive
McAvoy, ThomasSpearing, Nigel
McCartney, IanSpellar, John
McCrea, The Reverend WilliamSquire, Rachel (Dunfermline W)
Macdonald, CalumSteinberg, Gerry
McFall, JohnStevenson, George
McKelvey, WilliamStott, Roger
Mackinlay, AndrewStrang, Dr. Gavin
McLeish, HenrySutcliffe, Gerry
Maclennan, RobertTaylor, Mrs Ann (Dewsbury)
McMaster, GordonTaylor, Matthew (Truro)
McNamara, KevinThompson, Jack (Wansbeck)
MacShane, DenisTimms, Stephen
McWilliam, JohnTouhig, Don
Madden, MaxTyler, Paul
Mahon, AliceVaz, Keith
Mandelson, PeterWalker, Rt Hon Sir Harold
Marek, Dr JohnWallace, James
Martin, Michael J (Springburn)Walley, Joan
Martlew, EricWareing, Robert N
Meacher, MichaelWatson, Mike
Michael, AlunWicks, Malcolm
Michie, Bill (Sheffield Heeley)Wigley, Dafydd
Michie, Mrs Ray (Argyll & Bute)Williams, Rt Hon Alan (Sw'n W)
Milburn, AlanWilliams, Alan W (Carmarthen)
Miller, AndrewWilson, Brian
Morgan, RhodriWinnick, David
Morley, ElliotWise, Audrey
Morris, Rt Hon Alfred (Wy'nshawe)Worthington, Tony
Morris, Estelle (B'ham Yardley)Wray, Jimmy
Morris, Rt Hon John (Aberavon)Wright, Dr Tony
Mowlam, MarjorieYoung, David (Bolton SE)
Mudie, George
Mullin, ChrisTellers for the Ayes:
Murphy, PaulMr. Joe Benton and
Oakes, Rt Hon GordonMr. Robert Ainsworth.
NOES
Ainsworth, Peter (East Surrey)Eggar, Rt Hon Tim
Aitken, Rt Hon JonathanElletson, Harold
Alison, Rt Hon Michael (Selby)Emery, Rt Hon Sir Peter
Allason, Rupert (Torbay)Evans, David (Welwyn Hatfield)
Amess, DavidEvans, Jonathan (Brecon)
Arbuthnot, JamesEvans, Nigel (Ribble Valley)
Arnold, Jacques (Gravesham)Evans, Roger (Monmouth)
Arnold, Sir Thomas (Hazel Grv)Evennett, David
Ashby, DavidFaber, David
Atkins, RobertFabricant, Michael
Atkinson, David (Bour'mouth E)Fenner, Dame Peggy
Atkinson, Peter (Hexham)Field, Barry (Isle of Wight)
Baker, Rt Hon Kenneth (Mole V)Fishburn, Dudley
Baker, Nicholas (North Dorset)Forman, Nigel
Baldry, TonyForth, Eric
Banks, Matthew (Southport)Fox, Dr Liam (Woodspring)
Bates, MichaelFox, Sir Marcus (Shipley)
Batiste, SpencerFreeman, Rt Hon Roger
Bellingham, HenryFrench, Douglas
Bendall, VivianGale, Roger
Beresford, Sir PaulGallie, Phil
Biffen, Rt Hon JohnGardiner, Sir George
Booth, HartleyGarel-Jones, Rt Hon Tristan
Boswell, TimGarnier, Edward
Bottomley, Peter (Eltham)Gill, Christopher
Bottomley, Rt Hon VirginiaGillan, Cheryl
Bowden, Sir AndrewGoodlad, Rt Hon Alastair
Bowis, JohnGoodson-Wickes, Dr Charles
Boyson, Rt Hon Sir RhodesGorman, Mrs Teresa
Brandreth, GylesGorst, Sir John
Brazier, JulianGrant, Sir A(SW Cambs)
Bright, Sir GrahamGreenway, Harry (Ealing N)
Brooke, Rt Hon PeterGriffiths, Peter (Portsmouth, N)
Brown, M (Brigg & Cl'thorpes)Grylls, Sir Michael
Browning, Mrs AngelaGummer, Rt Hon John Selwyn
Bruce, Ian (Dorset)Hague, William
Budgen, NicholasHamilton, Rt Hon Sir Archibald
Burns, SimonHamilton, Neil (Tatton)
Burt, AlistairHampson, Dr Keith
Butcher, JohnHanley, Rt Hon Jeremy
Butler, PeterHannam, Sir John
Butterfill, JohnHargreaves, Andrew
Carlisle, John (Luton North)Harris, David
Carlisle, Sir Kenneth (Lincoln)Haselhurst, Alan
Carrington, MatthewHawkins, Nick
Carttiss, MichaelHayes, Jerry
Cash, WilliamHeald, Oliver
Channon, Rt Hon PaulHeath, Rt Hon Sir Edward
Clappison, JamesHeathcoat-Amory, David
Clark, Dr Michael (Rochford)Hendry, Charles
Clifton-Brown, GeoffreyHicks, Robert
Coe, SebastianHiggins, Rt Hon Sir Terence
Colvin, MichaelHill, James (Southampton Test)
Congdon, DavidHogg, Rt Hon Douglas (G'tham)
Conway, DerekHoram, John
Cope, Rt Hon Sir JohnHordern, Rt Hon Sir Peter
Cormack, Sir PatrickHoward, Rt Hon Michael
Couchman, JamesHowarth, Alan (Strat'rd-on-A)
Cran, JamesHowell, Rt Hon David (G'dford)
Currie, Mrs Edwina (S D'by'ire)Howell, Sir Ralph (N Norfolk)
Curry, David (Skipton & Ripon)Hughes, Robert G (Harrow W)
Davies, Quentin (Stamford)Hunt, Sir John (Ravensbourne)
Davis, David (Boothferry)Hunter, Andrew
Day, StephenJack, Michael
Deva, Nirj JosephJenkin, Bernard
Devlin, TimJessel, Toby
Dicks, TerryJohnson Smith, Sir Geoffrey
Dorrell, Rt Hon StephenJones, Gwilym (Cardiff N)
Douglas-Hamilton, Lord JamesJones, Robert B (W Hertfdshr)
Dover, DenJopling, Rt Hon Michael
Duncan, AlanKellett-Bowman, Dame Elaine
Duncan-Smith, IainKey, Robert
Dunn, BobKing, Rt Hon Tom
Durant, Sir AnthonyKirkhope, Timothy
Knapman, RogerRumbold, Rt Hon Dame Angela
Knight, Mrs Angela (Erewash)Ryder, Rt Hon Richard
Knight, Greg (Derby N)Sackville, Tom
Knox, Sir DavidSainsbury, Rt Hon Sir Timothy
Kynoch, George (Kincardine)Scott, Rt Hon Sir Nicholas
Lait, Mrs JacquiShaw, David (Dover)
Lamont, Rt Hon NormanShaw, Sir Giles (Pudsey)
Lang, Rt Hon IanShephard, Rt Hon Gillian
Lawrence, Sir IvanShepherd, Colin (Hereford)
Legg, BarryShepherd, Richard (Aldridge)
Leigh, EdwardSims, Roger
Lennox-Boyd, Sir MarkSmith, Sir Dudley (Warwick)
Lester, Jim (Broxtowe)Smith, Tim (Beaconsfield)
Lidington, DavidSoames, Nicholas
Lightbown, DavidSpeed, Sir Keith
Lilley, Rt Hon PeterSpencer, Sir Derek
Lloyd, Rt Hon Sir Peter (Fareham)Spicer, Sir James (W Dorset)
Lord, MichaelSpicer, Michael (S Worcs)
Lyell, Rt Hon Sir NicholasSpink, Dr Robert
MacGregor, Rt Hon JohnSpring, Richard
MacKay, AndrewSproat, Iain
Maclean, DavidSquire, Robin (Hornchurch)
McLoughlin, PatrickStanley, Rt Hon Sir John
McNair-Wilson, Sir PatrickSteen, Anthony
Madel, Sir DavidStephen, Michael
Maitland, Lady OlgaStern, Michael
Major, Rt Hon JohnStewart, Allan
Malone, GeraldStreeter, Gary
Mans, KeithSumberg, David
Marlow, TonySykes, John
Marshall, John (Hendon S)Tapsell, Sir Peter
Marshall, Sir Michael (Arundel)Taylor, Ian (Esher)
Martin, David (Portsmouth S)Taylor, John M (Solihull)
Mates, MichaelTaylor, Sir Teddy (Southend, E)
Mawhinney, Rt Hon Dr BrianTemple-Morris, Peter
Mayhew, Rt Hon Sir PatrickThomason, Roy
Mellor, Rt Hon DavidThompson, Sir Donald (C'er V)
Merchant, PiersThompson, Patrick (Norwich N)
Mills, IainThornton, Sir Malcolm
Mitchell, Andrew (Gedling)Thurnham, Peter
Mitchell, Sir David (NW Hants)Townend, John (Bridlington)
Moate, Sir RogerTownsend, Cyril D (Bexl'yh'th)
Monro, Sir HectorTracey, Richard
Montgomery, Sir FergusTrend, Michael
Needham, Rt Hon RichardTrotter, Neville
Nelson, AnthonyTwinn, Dr Ian
Neubert, Sir MichaelVaughan, Sir Gerard
Newton, Rt Hon TonyViggers, Peter
Nicholls, PatrickWaldegrave, Rt Hon William
Nicholson, David (Taunton)Walden, George
Norris, SteveWalker, Bill (N Tayside)
Onslow, Rt Hon Sir CranleyWaller, Gary
Oppenheim, PhillipWard, John
Ottaway, RichardWardle, Charles (Bexhill)
Page, RichardWaterson, Nigel
Pattie, Rt Hon Sir GeoffreyWatts, John
Pawsey, JamesWhitney, Ray
Peacock, Mrs ElizabethWhittingdale, John
Pickles, EricWiddecombe, Ann
Porter, Barry (Wirral S)Wilkinson, John
Porter, David (Waveney)Willetts, David
Portillo, Rt Hon MichaelWilshire, David
Powell, William (Corby)Wolfson, Mark
Rathbone, TimWood, Timothy
Redwood, Rt Hon JohnYeo, Tim
Renton, Rt Hon TimYoung, Rt Hon Sir George
Rifkind, Rt Hon Malcolm
Robathan, AndrewTellers for the Noes:
Robinson, Mark (Somerton)Mr. Sydney Chapman and
Roe, Mrs Marion (Broxbourne)Mr. Bowen Wells.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments):—

The House divided: Ayes 272, Noes 251.

Division No. 152][10.15 pm
AYES
Ainsworth, Peter (East Surrey)Duncan-Smith, Iain
Aitken, Rt Hon JonathanDunn, Bob
Alison, Rt Hon Michael (Selby)Durant Sir Anthony
Amess, DavidEggar, Rt Hon Tim
Arbuthnot, JamesElletson, Harold
Arnold, Jacques (Gravesham)Emery, Rt Hon Sir Peter
Arnold, Sir Thomas (Hazel Grv)Evans, David (Welwyn Hatfield)
Ashby, DavidEvans, Jonathan (Brecon)
Atkins, RobertEvans, Nigel (Ribble Valley)
Atkinson, David (Bour'mouth E)Evans, Roger (Monmouth)
Baker, Rt Hon Kenneth (Mole V)Evennett, David
Baker, Nicholas (North Dorset)Faber, David
Baldry, TonyFabricant, Michael
Banks, Matthew (Southport)Fenner, Dame Peggy
Bates, MichaelField, Barry (Isle of Wight)
Batiste, SpencerForman, Nigel
Bellingham, HenryForth, Eric
Beresford, Sir PaulFox, Dr Liam (Woodspring)
Biffen, Rt Hon JohnFox, Sir Marcus (Shipley)
Booth, HartleyFreeman, Rt Hon Roger
Boswell, TimGale, Roger
Bottomley, Peter (Eltham)Gallie, Phil
Bottomley, Rt Hon VirginiaGardiner, Sir George
Bowden, Sir AndrewGare-Jones, Rt Hon Tristan
Bowis, JohnGarnier, Edward
Boyson, Rt Hon Sir RhodesGill, Christopher
Brandreth, GylesGillan, Cheryl
Brazier, JulianGoodlad, Rt Hon Alastair
Bright, Sir GrahamGoodson-Wickes, Dr Charles
Brooke, Rt Hon PeterGorman, Mrs Teresa
Brown, M (Brigg & Cl'thorpes)Gorst, Sir John
Browning, Mrs AngelaGrant, Sir A (SW Cambs)
Bruce, Ian (Dorset)Greenway, Harry (Ealing N)
Budgen, NicholasGriffiths, Peter (Portsmouth, N)
Burns, SimonGrylls, Sir Michael
Burt, AlistairGummer, Rt Hon John Selwyn
Butcher, JohnHague, William
Butler, PeterHamilton, Rt Hon Sir Archibald
Butterfill, JohnHamilton, Neil (Tatton)
Carlisle, John (Luton North)Hampson, Dr Keith
Carlisle, Sir Kenneth (Lincoln)Hanley, Rt Hon Jeremy
Carrington, MatthewHannam, Sir John
Carttiss, MichaelHargreaves, Andrew
Cash, WilliamHarris, David
Channon, Rt Hon PaulHaselhurst, Alan
Clappison, JamesHawkins, Nick
Clark, Dr Michael (Rochford)Hayes, Jerry
Clifton-Brown, GeoffreyHeald, Oliver
Coe, SebastianHeath, Rt Hon Sir Edward
Colvin, MichaelHeathcoat-Amory, David
Congdon, DavidHendry, Charles
Conway, DerekHicks, Robert
Cope, Rt Hon Sir JohnHiggins, Rt Hon Sir Terence
Cormack, Sir PatrickHill, James (Southampton Test)
Couchman, JamesHogg, Rt Hon Douglas (G'tham)
Cran, JamesHoram, John
Curry, David (Skipton & Ripon)Hordem, Rt Hon Sir Peter
Davies, Quentin (Stamford)Howard, Rt Hon Michael
Davis, David (Boothferry)Howarth, Alan (Strar'rd-on-A)
Day, StephenHowell, Rt Hon David (G'dford)
Deva, Nirj JosephHowell, Sir Ralph (N Norfolk)
Devlin, TimHughes, Robert G (Harrow W)
Dicks, TerryHunter, Andrew
Dorrell, Rt Hon StephenJack, Michael
Douglas-Hamilton, Lord JamesJenkin, Bernard
Dover, DenJessel, Toby
Duncan, AlanJohnson Smith, Sir Geoffrey
Jones, Gwilym (Cardiff N)Rifkind, Rt Hon Malcolm
Jones, Robert B (W Hertfdshr)Robathan, Andrew
Jopling, Rt Hon MichaelRobinson, Mark (Somerton)
Kellett-Bowman, Dame ElaineRoe, Mrs Marion (Broxbourne)
Key, RobertRumbold, Rt Hon Dame Angela
Wrkhope, TimothyRyder, Rt Hon Richard
Knapman, RogerSackville, Tom
Knight, Mrs Angela (Erewash)Scott, Rt Hon Sir Nicholas
Knight, Greg (Derby N)Shaw, David (Dover)
Knox, Sir DavidShaw, Sir Giles (Pudsey)
Kynoch, George (Kincardine)Shephard, Rt Hon Gillian
Lait, Mrs JacquiShepherd, Colin (Hereford)
Lang, Rt Hon IanShepherd, Richard (Aldridge)
Lawrence, Sir IvanSims, Roger
Legg, BarrySmith, Sir Dudley (Warwick)
Leigh, EdwardSmith, Tim (Beaconsfield)
Lennox-Boyd, Sir MarkSoames, Nicholas
Lester, Jim (Broxtowe)Speed, Sir Keith
Lidington, DavidSpencer, Sir Derek
Lightbown, DavidSpicer, Sir James (W Dorset)
Lilley, Rt Hon PeterSpicer, Michael (S Worcs)
Lloyd, Rt Hon Sir Peter (Fareham)Spink, Dr Robert
Lord, MichaelSpring, Richard
Lyell, Rt Hon Sir NicholasSproat, Iain
MacGregor, Rt Hon JohnSquire, Robin (Hornchurch)
MacKay, AndrewStanley, Rt Hon Sir John
Maclean, DavidSteen, Anthony
McLoughlin, PatrickStephen, Michael
McNair-Wilson, Sir PatrickStern, Michael
Madel, Sir DavidStewart, Allan
Maritland, Lady OlgaStreeter, Gary
Major, Rt Hon JohnSumberg, David
Malone, GeraldSykes, John
Mans, KeithTapsell, Sir Peter
Marlow, TonyTaylor, Ian (Esher)
Marshall, John (Hendon S)Taylor, John M (Solihull)
Marshall, Sir Michael (Arundel)Taylor, Sir Teddy (Southend, E)
Martin, David (Portsmouth S)Temple-Morris, Peter
Mates, MichaelThomason, Roy
Mawhinney, Rt Hon Dr BrianThompson, Sir Donald (C'er V)
Mayhew, Rt Hon Sir PatrickThompson, Patrick (Norwich N)
Mellor, Rt Hon DavidThomton, Sir Malcolm
Merchant, PiersThumham, Peter
Mills, IainTownsend, Cyril D (Bexl'yh'th)
Mitchell, Andrew (Gedling)Tracey, Richard
Mitchell, Sir David (NW Hants)Trend, Michael
Moate, Sir RogerTrotter, Neville
Monro, Sir HectorTwinn, Dr Ian
Montgomery, Sir FergusVaughan, Sir Gerard
Needham, Rt Hon RichardViggers, Peter
Nelson, AnthonyWaldegrave, Rt Hon William
Neubert, Sir MichaelWalker, Bill (N Tayside)
Newton, Rt Hon TonyWaller, Gary
Nichdls, PatrickWard, John
Nicholson, David (Taunton)Wardle, Charles (Bexhill)
Norris, SteveWaterson, Nigel
Onslow, Rt Hon Sir CranleyWatts, John
Oppenheim, PhillipWhitney, Ray
Ottaway, RichardWhittingdale, John
Page, RichardWiddecombe, Ann
Pattie, Rt Hon Sir GeoffreyWilkinson, John
Pawsey, JamesWilletts, David
Peacock, Mrs ElizabethWilshire, David
Pickles, EricWolfson, Mark
Porter, Barry (Wirral S)Wood, Timothy
Porter, David (Waveney)Yeo, Tim
Portillo, Rt Hon MichaelYoung, Rt Hon Sir George
Powell, William (Corby)
Rathbone, TimTellers for the Ayes:
Redwood, Rt Hon JohnMr. Sydney Chapman and
Renton, Rt Hon TimMr. Bowen Wells.
NOES
Abbott, Ms DianeField, Frank (Birkenhead)
Allen, GrahamFlynn, Paul
Anderson, Donald (Swansea E)Foster, Rt Hon Derek
Anderson, Ms Janet (Ros'dale)Foster, Don (Bath)
Armstrong, HilaryFoulkes, George
Ashdown, Rt Hon PaddyFraser, John
Ashton, JoeFyfe, Maria
Austin-Walker, JohnGalbraith, Sam
Banks, Tony (Newham NW)Galloway, George
Barnes, HarryGapes, Mike
Barron, KevinGarrett, John
Battle, JohnGerrard, Neil
Bayley, HughGilbert, Rt Hon Dr John
Beckett, Rt Hon MargaretGodman, Dr Norman A
Beggs, RoyGodsiff, Roger
Beith, Rt Hon A JGolding, Mrs Llin
Bell, StuartGordon, Mildred
Benn, Rt Hon TonyGraham, Thomas
Bennett, Andrew FGrant, Bernie (Tottenham)
Bermingham, GeraldGriffiths, Nigel (Edinburgh S)
Berry, RogerGriffiths, Win (Bridgend)
Betts, CliveGrocott, Bruce
Boateng, PaulHain, Peter
Bradley, KeithHall, Mike
Bray, Dr JeremyHardy, Peter
Brown, Gordon (Dunfermline E)Harvey, Nick
Brown, N (N'c'tle upon Tyne E)Hattersley, Rt Hon Roy
Bruce, Malcolm (Gordon)Henderson, Doug
Burden, RichardHeppell, John
Byers, StephenHill, Keith (Streatham)
Caborn, RichardHinchliffe, David
Callaghan, JimHodge, Margaret
Campbell, Mrs Anne (C'bridge)Hoey, Kate
Campbell, Menzies (Fife NE)Hogg, Norman (Cumbernauld)
Canavan, DennisHome Robertson, John
Chidgey, DavidHood, Jimmy
Chisholm, MalcolmHoon, Geoffrey
Church, JudithHowarth, George (Knowsley North)
Clapham, MichaelHowells, Dr. Kim (Pontypridd)
Clark, Dr David (South Shields)Hoyle, Doug
Clarke, Eric (Midlothian)Hughes, Kevin (Doncaster N)
Clarke, Tom (Monklands W)Hughes, Robert (Aberdeen N)
Clelland, DavidHughes, Roy (Newport E)
Clwyd, Mrs AnnHughes, Simon (Southwark)
Coffey, AnnHutton, John
Cohen, HarryIllsley, Eric
Connarty, MichaelIngram, Adam
Cook, Frank (Stockton N)Jackson, Glenda (H'stead)
Cook, Robin (Livingston)Jackson, Helen (Shef'ld, H)
Corbett, RobinJamieson, David
Corbyn, JeremyJanner, Greville
Cousins, JimJones, Barry (Alyn and D'side)
Cox, TomJones, Jon Owen (Cardiff C)
Cummings, JohnJones, Lynne (B'ham S O)
Cunliffe, LawrenceJones, Martyn (Clwyd, SW)
Cunningham, Jim (Covy SE)Jowell, Tessa
Cunningham, Rt Hon Dr JohnKaufman, Rt Hon Gerald
Dalyell, TarnKeen, Alan
Davidson, IanKennedy, Charles (Ross,C&S)
Davies, Bryan (Oldham C'tral)Kennedy, Jane (Lpool Brdgn)
Davies, Rt Hon Denzil (Llanelli)Khabra, Piara S
Davies, Ron (Caerphilly)Kilfoyle, Peter
Denham, JohnKirkwood, Archy
Dewar, DonaldLestor, Joan (Eccles)
Dixon, DonLewis, Terry
Donohoe, Brian HLitherland, Robert
Dowd, JimLivingstone, Ken
Dunnachie, JimmyLloyd, Tony (Stretford)
Dunwoody, Mrs GwynethLoyden, Eddie
Eastham, KenMcAllion, John
Enright, DerekMcAvoy, Thomas
Etherington, BillMcCartney, Ian
Evans, John (St Helens N)McCrea, The Reverend William
Ewing, Mrs MargaretMacdonald, Calum
Fatchett, DerekMcFall, John
Faulds, AndrewMcKelvey, William
Mackinlay, AndrewRogers, Allan
McLeish, HenryRooker, Jeff
Maclennan, RobertRooney, Terry
McMaster, GordonRoss, Ernie (Dundee W)
McNamara, KevinRowlands, Ted
MacShane, DenisSalmond, Alex
McWilliam, JohnSedgemore, Brian
Madden, MaxSheerman, Barry
Mahon, AliceSheldon, Rt Hon Robert
Mandelson, PeterShort, Clare
Marek, Dr JohnSimpson, Alan
Martin, Michael J (Springburn)Skinner, Dennis
Martlew, EricSmith, Andrew (Oxford E)
Meacher, MichaelSmith, Chris (Isl'ton S & F'sbury)
Michael, AlunSmith, Llew (Blaenau Gwent)
Michie, Bill (Sheffield Heeley)Smyth, The Reverend Martin
Michie, Mrs Ray (Argyll & Bute)Soley, Clive
Milburn, AlanSpearing, Nigel
Miller, AndrewSpellar, John
Morgan, RhodriSquire, Rachel (Dunfermline W)
Morley, ElliotSteinberg, Gerry
Morris, Rt Hon Alfred (Wy'nshawe)Stevenson, George
Morris, Estelle (B'ham Yardley)Stott, Roger
Morris, Rt Hon John (Aberavon)Strang, Dr. Gavin
Mowlam, MarjorieSutcliffe, Gerry
Mudie, GeorgeTaylor, Mrs Ann (Dewsbury)
Mullin, ChrisTaylor, Matthew (Truro)
Murphy, PaulThompson, Jack (Wansbeck)
Oakes, Rt Hon GordonTimms, Stephen
O'Brien, William (Normanton)Touhig, Don
O'Hara, EdwardTyler, Paul
Olner, BillVaz, Keith
O'Neill, MartinWalker, Rt Hon Sir Harold
Orme, Rt Hon StanleyWallace, James
Parry, RobertWalley, Joan
Pearson, IanWareing, Robert N
Pike, Peter LWatson, Mike
Pope, GregWicks, Malcolm
Powell, Ray (Ogmore)Wigley, Dafydd
Prentice, Bridget (Lew'm E)Williams, Rt Hon Alan (SW'n W)
Prentice, Gordon (Pendle)Williams, Alan W (Carmarthen)
Primarolo, DawnWilson, Brian
Prescott, Rt Hon JohnWinnick, David
Quin, Ms JoyceWise, Audrey
Randall, StuartWorthington, Tony
Raynsford, NickWray, Jimmy
Reid, Dr JohnWright, Dr Tony
Rendel, DavidYoung, David (Bolton SE)
Robertson, George (Hamilton)Tellers for the Noes:
Robinson, Geoffrey (Co'try NW)Mr. Joe Benton and
Roche, Mrs BarbaraMr. Robert Ainsworth

Question accordingly agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

ResolvedThat this House welcomes the outcome of the Government's Nuclear Review; applauds the improvements in performance by the nuclear generators since the privatisation of the rest of the electricity supply industry, including the reduction of decommissioning costs achieved so far; welcomes the proposals for more cost-effective management of Magnox liabilities; welcomes the Government's decision to privatise the industry's seven AGR stations and one PWR station during the course of 1996; endorses the decision to create a holding company, with its headquarters located in Scotland, with the parts of Nuclear Electric and Scottish Nuclear that are to be privatised as its wholly owned subsidiaries; notes that safety will continue to be of paramount importance when the industry is in the private sector; and applauds the benefits to consumers in terms of lower electricity prices which the early end to the nuclear element of the fossil fuel levy in England and Wales and to the premium price in the Nuclear Energy Agreement in Scotland will bring.