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Nuclear Power

Part of the debate – in the House of Commons at 7:47 pm on 22nd October 2002.

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Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry) 7:47 pm, 22nd October 2002

The current market position is as follows. As the hon. Gentleman knows, there has been a fall of 40 per cent. in the wholesale price of electricity in the past three years. British industry has benefited considerably from that reduction to the extent to which it has been passed on. As a result of competition, monopoly profits in the privatised energy generators have been stripped out to a large extent. That has left the nuclear power industry, especially British Energy, selling at a price 20 per cent. below the price at which it could make a profit. That is how fundamentally uncompetitive the industry has become.

The question is, in those circumstances and with a lot of excess capacity in the energy industry—estimates vary, but National Grid says that there is 30 per cent. excess capacity, and that figure could well rise if there is a downturn in the economy—why should the Government intervene to assist one company? A series of answers to that question have been given, and I shall work through them.

The first and probably the most important answer cites nuclear safety. Last Thursday, I asked the Leader of the House about this matter. He is clearly a highly intelligent Minister and he is familiar with the arguments, so he did not simply spurt out his answer, which was that the Government had intervened because they were concerned about the safety issues that might arise if British Energy were to cease production. The right hon. Gentleman is right to put the fundamental issue of safety at the top of the list—we share that starting point. However, it is an odd argument, because there is no reason why the closure of a nuclear plant should present a risk to public safety. One of the reactors—Torness—has already been closed, for technical reasons. Perhaps the Minister can give one, but there is no obvious reason why a company that has been received into administration should present a health and safety risk. The Government have a health and safety system that is designed to protect the public in such circumstances.

What I think is happening—if it is, it is an alarming development—is that the company is, in effect, blackmailing the Government. The company is saying to the Government, XYou sign the cheques to pay to bail us out; otherwise, we will lock the doors, walk away from our installations and leave you to take the risk of any accidents that occur."