Energy Bill

Part of the debate – in the House of Lords at 8:22 pm on 22nd October 2008.

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Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative 8:22 pm, 22nd October 2008

My Lords, I hope I can explain this at not too great a length. The nuclear industry has argued that effective rights of appeal should be available in the Bill in relation to Ministers' decisions to approve, reject or modify funded decommissioning programmes. The Government, however, have declined to provide an appeals machinery because Ministers believe that the industry is already well protected by the availability of judicial review.

On the Planning Bill I took exception to the number of occasions when any appeal to the courts was being left to judicial review, and I consider that it is now a seriously misused procedure. It used to be that only if a decision was made that was so unreasonable that no reasonable man would have made it that the courts would entertain a case for judicial review, but in an interesting chapter in his book about the constitution, Anthony King, professor of history at the University of Essex, has drawn attention to the fact that whereas in 1981 there were 356 non-criminal cases involving judicial review, by 2005, the latest year that he was considering, there were 5,131—an increase over that period of about 14 times. It used to be regarded as a threat hanging over the heads of Ministers; in the debates on the Planning Bill I drew attention to the Civil Service publication called The Judge Over Your Shoulder. However, both in the Planning Bill and here—and this is a good example of it—instead of establishing an appropriate right of appeal within the executive framework that governs these clauses, it is simply being left to the courts.

The nuclear industry believes that judicial review is a wholly inadequate process for challenging the complex technical and commercial judgments that are likely to characterise Ministers' decisions about funded decommissioning programmes. This is normally because, as I have explained, judicial review can be used to challenge Ministers' or regulators' decisions on fairly limited grounds, such as a clear failure to observe due process, rather than on the actual substance of the decisions that follow full and detailed scrutiny. The powers of a Minister to approve, reject or modify a funded decommissioning programme can be exercised only,

"with the aim of securing that prudent provision is made", by the site operator in relation to both the technical matters in the programme and the financing of those matters. The concept of "prudent provision" and the assessment of what it means and whether the site operator's programme satisfies the concept, will clearly be critical elements in the ministerial decision process.

It is upon that issue that the industry's exposure to risk will be most significant because of the scope for Ministers over a long period to define, and perhaps redefine, the concept of "prudent provision", perhaps in an upwards-only manner, destabilising what have been Ministers' long-term intentions—namely, to establish the long-term certainty that is needed to support major nuclear new-build investment. I believe that Ministers recognise this danger and have therefore taken powers under Clause 51 to issue guidance about the content and preparation of funded decommissioning programmes. This guidance has been published, following consultation, and it is helpful in telling operators and the wider industry how Ministers will aim to interpret the concept of prudent provision. However, Clause 51 does not require the guidance to include such assistance.

Therefore, bearing in mind that any guidance issued by Ministers under Clause 51 must be laid before Parliament, the industry would be able to accept the Government's rejection of an appeals option with an easier mind if the clause could make clear that one of the matters that the guidance will be expected explicitly to deal with is how the concept of prudent provision is to be applied to the assessment of funded decommissioning programmes.

This is what my amendment is intended to achieve; that the guidance must contain,

"the way in which the Secretary of State will interpret the phrase 'prudent provision' for the purposes of sections 43(4) and 46(7)".

I hope that I have made my case clear. I beg to move.