Clause 3 — Amendment of Schedule 12 to The Electricity Act 1989

Electricity (Miscellaneous Provisions) Bill – in the House of Commons at 4:36 pm on 6th February 2003.

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Photo of Andrew Stunell Andrew Stunell Shadow Chief Whip (Commons), Shadow Spokesperson (Environment, Food and Rural Affairs), Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Environment, Food and Rural Affairs) 4:36 pm, 6th February 2003

I beg to move amendment No. 18, in page 2, line 26, leave out from 'schedule)' to end of line 28 and insert—

'is amended, such that the upper limit on "qualifying expenditure", as defined in the schedule, is raised to a total of £3,500 million, subject to provisions that the Secretary of State shall make reports annually to both Houses of Parliament detailing the scale of—

(a) any such "qualifying expenditure" which has been made; and

(b) any such "qualifying expenditure" which is anticipated,'.

The amendment relates to the ceiling on the amount that can be transferred from the Government's coffers to those of British Energy. It is perhaps worth pointing out that the existing limit that applies to Government aid in parallel circumstances is £1 billion and that that maximum can be varied by the House to £2.5 billion. The Bill proposes to change those limits so that there is no limit whatever.

The amendment concedes that the Minister might need a higher ceiling than he is given in current legislation. We are saying that the appropriate new ceiling is £3.5 billion—a 350 per cent. increase on the existing limit. Even in terms of the extended limit that is currently permissible, that would be a 40 per cent. increase. In fairness to the official Opposition, I point out that new clause 2 contains similar provision that would multiply that figure by about three to a very substantial £10 billion.

My question to the Committee is this: how could it possibly vote against the amendment or new clause 2? How could such figures be exceeded? After my previous contribution, the Minister said that it was one of my paranoid fantasies to suppose that money might be channelled via British Energy to British Nuclear Fuels Ltd. Perhaps that is so, but what fantasy exists in his mind to suggest that he could spend a larger sum solely on British Energy and solely in the circumstances that he has so far outlined to the House and the Committee? If the money is not for BNFL, will it go to Nirex for underground storage? Does he fear that there might be a massive hole in British Energy's accounts and that it is in a similar position to that of Enron? What can be the justification for a provision that lifts the ceiling on an already very substantial amount to an even greater figure? In fact, the Bill lifts it to an unlimited figure.

The Minister might merely be ensuring that he has got all the elbow room that he possibly needs, but if £3.5 billion or £10 billion is not sufficient, what possible number can he have in mind? What sort of project can he have even in his most extreme fantasies on which he could spend so much money? If he wants more than the £3.5 billion that the amendment concedes that he might be given, surely he is obliged to say what on earth it is for.

I should like to draw attention to another aspect of the amendment: the condition that

"the Secretary of State shall make reports annually to both Houses of Parliament" detailing the scale of expenditure and his plans for the future. We had it in mind to draft amendments that referred specifically to the National Audit Office or that would have established a specific regulatory regime. However, we received advice that that would not be appropriate in this context and we have accepted it.

Whatever level of spending the Minister is committed to—whether it is unlimited, as he wants, or whether it is £10 billion, as the Conservatives suggest in new clause 2, or £3.5 billion, as we suggest—there is an imperative for the Secretary of State to put in place strong regulatory and reporting procedures. I hope that the Committee will consider our amendment favourably. We shall put it to the vote if the Government do not accept it.

Photo of Crispin Blunt Crispin Blunt Shadow Minister (Business, Innovation and Skills), Shadow Minister (Trade and Industry)

It is a sad and shabby state of affairs when we have to dispense with consideration of clause 2 in order to discuss the House's primary responsibility of exercising its fiscal duty on behalf of the people whom we represent to place some limit on the Executive.

I endorse the comments of Mr. Stunell. Surely the Executive cannot come to Parliament and demand an unlimited amount of money for one company. They cannot expect Parliament to write them a blank cheque. That is wholly unreasonable. The amendment would grant them £3.5 billion to support BE. It is inconceivable that they should require such an amount. New clause 2 would establish a principle with a limit of £10 billion. It would also require the Government to return to Parliament if they had to spend more than £2.1 billion, which is the amount of the additional liability—for the back-end fuel—that the Government are taking on.

I look forward to hearing the Minister's explanation of why the Government cannot accept the amendment.

Photo of Mr Brian Wilson Mr Brian Wilson Minister of State (Industry and Energy), Department of Trade and Industry

I have not the slightest ambition to spend such large sums of money. The nub of the argument is again the flexibility to respond to all circumstances. We have always said—I challenge anyone to dissent—

Photo of Mr Brian Wilson Mr Brian Wilson Minister of State (Industry and Energy), Department of Trade and Industry

Does the hon. Gentleman know from what he is going to dissent?

Photo of Mr Brian Wilson Mr Brian Wilson Minister of State (Industry and Energy), Department of Trade and Industry

He should hang on and I shall give him something from which to dissent. We have always said that we cannot walk away from the liabilities. I challenge anyone to contradict that. If, despite all that we are doing and all the eventualities that we are covering, BE failed, and assuming that no private company stepped in to take over a station and its liabilities, the Government would have to act to ensure that the liabilities were tackled cleanly and safely. If no one can dissent from that, they cannot put a figure on the Government's response in a worst-case scenario, which I do not envisage.

Photo of Crispin Blunt Crispin Blunt Shadow Minister (Business, Innovation and Skills), Shadow Minister (Trade and Industry)

In the circumstances that the Minister outlines, surely it would be proper for the Executive to come back to Parliament to seek more authority. The idea that the Government should have unlimited authority to spend unlimited money is outrageous.

Photo of Mr Brian Wilson Mr Brian Wilson Minister of State (Industry and Energy), Department of Trade and Industry

The option of returning to Parliament is not precluded. It is inevitable that, in the case of a catastrophic collapse, the matter would return to Parliament in many forms.

Photo of Mr Brian Wilson Mr Brian Wilson Minister of State (Industry and Energy), Department of Trade and Industry

We have never dealt with the issue through a written answer. There have been statements, debates, oral questions and a Bill. The Government's handling has been transparent. At every stage, we have told hon. Members exactly what we are doing and the reasons for our actions.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

The powers that the Bill grants the Government are much wider than our debate suggests. The measure could apply to other companies in the same sector as BE. For example, if BNFL were floated , could not the clause allow for its renationalisation?

Photo of Mr Brian Wilson Mr Brian Wilson Minister of State (Industry and Energy), Department of Trade and Industry

For reasons that the hon. Gentleman doubtless understands, no public Bill can deal with a single company. The measure is generic, but we are considering BE's circumstances.

Photo of Crispin Blunt Crispin Blunt Shadow Minister (Business, Innovation and Skills), Shadow Minister (Trade and Industry)

On a point of order, Sir Michael. The Minister said that this is a generic Bill that does not refer only to one company. However, from the long title of the Bill, it is clear that it refers only to British Energy. I have attempted to table generic amendments but was advised that they were not in order. I would be grateful for clarification on whether the Bill is generic or applies solely to British Energy.

The Second Deputy Chairman:

That is not a matter for the Chair: it is more a matter for debate.

It being five o'clock, The Second Deputy Chairman, pursuant to Orders [29 October 2002 and 27 January 2003], put forthwith the Question already proposed from the Chair.

Question put, That the amendment be made:—

The House divided: Ayes 158, Noes 295.

Division number 84 Electricity (Miscellaneous Provisions) Bill — Clause 3 — Amendment of Schedule 12 to The Electricity Act 1989

Aye: 157 MPs

No: 294 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Abstained: 1 MP

Abstaineds: A-Z by last name

Question accordingly negatived.

Clause 3 ordered to stand part of the Bill.