Clause 102 - Agreement about modifying decommissioning programme

Part of Energy Bill [Lords] – in a Public Bill Committee at 10:45 am on 21st June 2011.

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Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change 10:45 am, 21st June 2011

I am grateful for the contributions that we have had. I will start by responding to the points made by the hon. Member for Wansbeck. The issues he mentioned are already covered in legislation. The nature of the funded decommissioning programme is that there is a regular assessment every few years of how much money the programme will cost and how much is being set aside for that. If any more is needed, because costs are increasing faster than expected, there is an automatic obligation on nuclear companies to provide that extra funding. The issue that the hon. Gentleman mentioned, of potential taxpayer subsidy for the decommissioning costs, cannot apply. That is already enshrined in the process.

He asked me to explain some of the things that could be unforeseen circumstances. That would be slightly Rumsfeldian, talking about foreseeable unforeseen events or unforeseeable unforeseen events. The challenge we have is that, because we are looking so many years into the future, it is hard to be comprehensive or to give some sense of the range of issues that might apply and require this comfort to be provided. We also understand why hon. Members want these amendments to be made.

As the hon. Member for Southampton, Test said in his opening comments, the clause is about decommissioning. It is not about waste, which is separate; it is not about subsidy, which is separate. We made it clear that there will be no public subsidy. The reason for the change was that it became clear to us that the power introduced in the 2008 Act was very strong. It gave the Secretary of State an absolute power, to use at will, to change what the nuclear companies would have seen as a legal contract. They were concerned that they were being asked to invest billions and billions of pounds when at any point in the future a Secretary of State could change the ground rules. Understandably, they said that they felt that they had to have a greater sense of equity.

The proposal within the agreement that goes with the funded decommissioning programme would specify where the Secretary of State would continue to have that absolute power. In addition, that power would be reduced in other areas, so that there was a greater sense of certainty for investors. However, given that we cannot be certain what might arise in 10, 20, 30 or 40 years’ time, we have decided that it is appropriate. We understand the worries that have been expressed, and we will work on such matters before discussing them again on Report.

To answer the hon. Member for Brighton, Pavilion, we will work with the official Opposition to reach agreement. It might be challenging on some nuclear issues to reach agreement with the hon. Lady as we approach them from a slightly different direction, but we will try to find a form of words that has as much support throughout the House as possible and to share it with members of the Committee well ahead of the Bill being discussed on Report. I am grateful for the comments that we have heard during our discussion and I hope that, given my assurances, we can go forward as I have suggested.