Wylfa Nuclear Power Project: Taxpayer Liability for Safety — [Mr Laurence Robertson in the Chair]

– in Westminster Hall at 11:30 am on 24th July 2018.

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[Mr Laurence Robertson in the Chair]

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy) 2:30 pm, 24th July 2018

I beg to move,

That this House
has considered taxpayer liability for safety at the Wylfa Nuclear power project.

It is a pleasure to serve under your chairmanship, Mr Robertson. I must say that when my alarm went off at 5.15 this morning, I was absolutely delighted to be getting up to travel here and deliver this speech. I am sure everyone else here in the Chamber is equally keen to be here, even though it is the last sitting day. I am equally sure that the power of my debating skills and the points I am going to raise will not only make the Minister ponder when she gives her response, but lead to changes in Government policy over the summer recess, so I look forward to some announcements when we come back.

To get to the main point of the debate, we must first look at the wider picture. We must look at the history and question why the Government are hellbent on new nuclear power stations and why the official Opposition appear to be in such unison with them. Nuclear energy was the future at one time; it was the low-carbon technology at a time when all other methods of generation apart from hydro were carbon based. However, while nuclear has been responsible for helping to keep the lights on for decades, keeping the lights on has come at a price.

We have a legacy of contamination, and the National Audit Office estimates that the clean-up will come in at £121 billion by 2020. The Magnox Swarf storage silo, in operation since 1964, contains waste sludge that is corrosive and radioactive, which is expected to pose a significant hazard until 2050. We have many more sites still to be decommissioned, which will lead to further increases in taxpayer burdens. According to Dr Paul Dorfman of the Energy Institute in London, the Nuclear Decommissioning Authority estimates that clean-up costs for the next 120 years will be in the region of £190 billion to £250 billion. That is some legacy to bequeath future generations.

On reflection, it is clear that the privatisation of the nuclear industry has proven to be another case of privatising the profits while renationalising the liabilities associated with the industry. We still do not know what to do with radioactive waste other than storage. We have a long-term problem looming because of the increasing volume of waste to be stored and managed, so why on earth do we want to create further liabilities with the proposed new power station at Wylfa?

We once thought asbestos was a wonderful heat-resistant product, but once we learned about the health risks associated with it, we stopped using it. Why, then, when we know the problems with nuclear, do we want to repeat the past mistakes associated with it? The UK Government tell us that we need more nuclear as a low-carbon means of energy generation, and Wylfa is one of eight sites proposed for a total programme of 13 new reactors. Yet renewables already provide a bigger proportion of electricity than nuclear within the UK, and in Scotland the divide between nuclear and renewables is even greater. While the nuclear process may be deemed to be low carbon, I suggest it is anything but green, given the toxic legacy I have already outlined.

Why do we want to commission more at exorbitant cost? The cliché is, “We need the baseload that nuclear provides,” but as far back as 2015, the chief executive of National Grid argued that the baseload concept was outdated. He added that large-scale nuclear reactors were also an outdated concept and that the future would be driven by

“demand side response and management”.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

Clearly, we can both tear apart quotes, but the bottom line is that that is what the then chief executive of National Grid said. I was just going to come on to a quote from Dr Mark Diesendorf, of the University of New South Wales, in Australia. He stated that the assumption is

“that nuclear power is a reliable baseload supplier. In fact it’s no such thing. All nuclear power stations are subject to tripping out for safety reasons or technical faults. That means that a 3.2GW nuclear power station has to be matched by 3.2GW of expensive ‘spinning reserve’
that can be called in at a moment’s notice.”

He further states:

“The assumption that baseload power stations are necessary to provide a reliable supply of grid electricity has been disproven by both practical experience in electricity grids with high contributions from renewable energy, and by hourly computer simulations.”

Therefore, the argument that Wylfa and other stations are required to supply baseload is flawed.

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

On the point about baseload, does the hon. Gentleman not recognise that the whole point of managing a baseload with nuclear power stations and reactors is that they are organised to be taken offline in a scheduled programme of maintenance? In the case of Torness, it almost broke the world record for a continuous run of 495 days before being taken offline. Surely that is a huge achievement for engineers in Scotland?

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

The hon. Gentleman tried to worm in a compliment to engineers in Scotland at the end of his intervention. Of course I welcome the skills of engineers, including nuclear engineers—I have no doubt that the guys doing that work are highly skilled engineers. I still do not agree with the concept that the baseload is required from nuclear. If we think about Hinkley power station, we were originally told that, because of the baseload required, if it was not commissioned by December 2017, the lights would go out. We are way beyond that deadline, since Hinkley will not come on stream until closer to the end of this decade, and we are still managing our electricity supplies. There are ways to manage baseload through alternate supplies, which I will come on to.

The only other reasoning I can see for this headlong rush into more nuclear is the equally outdated concept of the UK being a world leader in a particular sector, but that will come about because of other countries pulling out of the nuclear sector. The US is not building new nuclear, Japan has changed tack and Germany has pledged to phase out new nuclear. It seems that the UK will be a world leader in propping up the nuclear sector for other countries. In a recent Westminster Hall debate on the nuclear sector deal, Chris Green stated that we should not be reliant on foreign countries for our energy, but with these new nuclear proposals, including Wylfa, that is exactly what we will still be: reliant on foreign countries for their expertise, knowledge and supply of goods.

I suggest that the UK might be the world leader in bad nuclear deals. Returning to Hinkley, we have a 35-year agreement at a strike rate of £92.50 per MWh, when offshore wind recently came in at a strike rate of £57.50 per MWh, and that £57.50 is only for a 15-year tenure. The Hinkley deal is so bad that it was criticised by the NAO as bad value for money. Part of the problem with Hinkley was the risk and the financial exposure to private investors, allied with the fact that the technology for the EPR, or European pressurised reactor, has still to be proven, with all existing EPR projects under construction still facing delays and cost overruns.

As investment in nuclear around the world falls, the UK has planning for 11 reactors on the go and two reactors under construction at Hinkley. In its latest report, released recently, the National Infrastructure Commission states that there should be a maximum of just one new nuclear contract signed before 2025 because of the reduced costs of renewables and the other emerging technologies, including the massive decrease in the cost of batteries. Its report also illustrates that, over the years, the cost of nuclear has not decreased, debunking another UK Government aspiration that continually commissioning new nuclear such as Wylfa will somehow reduce costs. Has the Minister assessed those comments, and will the Government provide a response to the report in due course?

Wylfa is also a different technology from Hinkley, and other proposed sites have yet further different technologies. It therefore stands to reason that, when employing those different technologies, the inherent price will not be brought down, because we will not benefit from repeat constructions and using the skills gained during one project on another. There will also be site-specific constraints and considerations.

This backdrop brings us directly back to the Wylfa proposals. Getting direct information from the Government remains difficult due to their claims of commercial confidentiality. However, the private developer, Hitachi, has clearly had difficulties with the costs and risks associated with the project, which has led to the suggestion of the Government taking a direct £5 billion stake. In principle, a direct Government stake in key infrastructure projects makes sense, as they can borrow more cheaply than private investors. However, in this case, it seems to be part of another, wider blank cheque-type agreement, with the Government desperate to get the project moving.

It is not only me using the blank cheque analogy. Will Gardiner, chief executive officer of Drax Group, said:

“I am not a fan of sweetheart deals, the government sitting down with Hitachi and writing them a cheque. That’s not good economics”.

On the economics, we have heard reported strike rate figures of £77.50 per megawatt-hour quoted for Wylfa. That reduced rate, compared with Hinkley’s, is on the back of the £5 billion stake. While the Government are trying to keep information under wraps, managing to learn anything is still a bit of a smoke-and-mirrors game.

Under the Paris and Brussels conventions, a nuclear operator is liable for any nuclear incidents. However, that liability is capped at €1.2 billion, which is way below the cost of a catastrophic incident—the Fukushima incident ran into the hundreds of billions of pounds—so the cap is arguably too low. Hitachi has already had two serious safety breaches in other nuclear developments, and was fined $2.7 million by the US Government for one of them. Apparently learning from that, Hitachi is resisting taking on liability for nuclear incidents at Wylfa. We do not know its exact proposal, but it marks a departure from current agreements, where the operator should be responsible for health and safety and attendant risks and liabilities.

The Times reports that Hitachi “won’t pay” for nuclear accidents at Wylfa, based on Nikkei reports that some of Hitachi’s directors wanted

“safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”.

It also marks a departure from the “polluter pays” principle. It is critical that the UK Government do not sign up to any such crazy proposals. I hope the Minister provides real clarity on this matter and does not hide behind commercial confidentiality.

We know the Prime Minister hit the pause button for Hinkley Point C to allow for a cost review. Despite that review, she somehow then caved in and accepted what the National Audit Office has subsequently confirmed is a bad deal. Why do the Government appear to be pulling out all the stops again to get Wylfa over the finishing line—by which I mean the agreeing of the contract? We know full well that the project will invariably end up over budget and delayed, just like every other ongoing nuclear project in the world.

Another argument in favour of Wylfa and other nuclear projects is the jobs they will create. I agree that these high-skilled jobs are vital for the localities with existing power stations, and I understand Members lobbying to maintain—or to create further—high-skilled jobs. However, those jobs should not come at any cost. Indeed, paragraph 23 of the Welsh Affairs Committee’s July 2016 report, “The Future of nuclear power in Wales”, explicitly states:

“We recommend that the Government negotiate a strike price for Wylfa Newydd below that agreed for Hinkley Point C and seek a price that would be competitive with renewable sources, such as on-shore wind. The Government should not continue with the project if the price is too high.”

It seems, based on that recommendation, that the Committee must by default be against this project continuing, as it clearly cannot be competitive compared with onshore wind. Has the Minister consulted the Committee on the recent developments in the likely cost of Wylfa?

I would not want to see job losses anywhere. I represent a deindustrialised constituency. Over the years, we have lost coal mining and many different manufacturing jobs. However, we can spend money more wisely to create jobs. Wylfa will cost up to £20 billion. The new nuclear legacy programme will cost circa £100 billion, and we have spent nearly £120 billion in decommissioning costs. Departing from civil nuclear projects, the successor programme to replace the Trident submarines will have whole-life costs of more than £200 billion, with future decommissioning costing up to £250 billion.

Those are astronomical sums of money, and we should be able to think how to spend them more wisely. We could have proper infrastructure investment and a targeted jobs and manufacturing strategy that would create more jobs and a more balanced economy, and we will not have the toxic legacy of nuclear. By the time Hinkley and Wylfa are constructed, with their anticipated 6 GW capacity, we could build something like 20 GW of offshore wind capacity. We know that the costs of batteries are plummeting, and renewable costs have also plummeted.

We should invest in carbon capture and storage. I welcome the Government’s latest report on CCS, but we should never have pulled the previous £1 billion allocation. How ridiculously small does that £1 billion seem compared with the costs of nuclear I have outlined? CCS will also allow for the decarbonisation of gas and biomass electricity generation and will open up the potential for a supply of zero-carbon fuel, in the form of hydrogen. However, each massive undertaking for nuclear is to the detriment of investment in renewables. When the Government give undertakings and risk guarantees for Wylfa, they reduce their scope to make similar guarantees for emerging technologies.

On jobs not coming at any cost, we also have to appreciate the potential health risks. As outlined by Dr Ian Fairlie, an independent consultant on radioactivity, the risks of leukaemia in nuclear workers are double those found in a 2005 study, and there is

“strong evidence of a dose-response relationship between cumulative, external, chronic, low-dose, exposures to radiation and leukaemia”.

He also states:

“When nuclear reactors are refueled, a 12-hour spike in radioactive emissions exposes local people to levels of radioactivity up to 500 times greater than during normal operation”.

He states in his blog that the research behind these findings is “impeccable”, as it was based on

“a huge study of over 300,000 nuclear workers adding up to over 8 million person years, thus ensuring its findings are statistically significant”.

I suggest we pay heed to such research.

As I have said, the cost legacy is bad enough, and we still do not have a solution to the long-term disposal of nuclear waste, so it is absolute folly to sign a deal in which the taxpayer takes on unlimited risk for a nuclear incident. This could prove to be the worst deal yet unless the Government change tack soon.

Photo of Albert Owen Albert Owen Labour, Ynys Môn 2:48 pm, 24th July 2018

It is always a pleasure to serve under your chairmanship, Mr Robertson. On this last day of term, I welcome the opportunity to highlight the benefits to the economy of new nuclear power and low-cost carbon, and also to promote Wylfa Newydd, which is in my constituency. Alan Brown did not notify me that he would discuss it; I saw it on the Order Paper. I think it is custom to do so, but I will let it go for now, because I will have the opportunity to deal with many of the issues that he raises.

I recently wrote a booklet, called “Resetting the Energy Button”, for a number of reasons. Its purpose is to show how my constituency, the Isle of Anglesey, can play a major role in the move forward towards a low-carbon economy. Ynys Môn has a proud history of electricity generation. It has the natural resources, it has an experienced workforce and it very much mirrors the British Isles.

Photo of Claire Perry Claire Perry The Minister of State, Department for Business, Energy and Industrial Strategy, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth)

Will the hon. Gentleman be so kind as to send me a copy of his booklet? I am in need of some good holiday reading for the summer.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Absolutely. In fact, I will also send one to the Chair, because I know that he is interested in this subject. Indeed, I should send some to the entire Scottish National party group in the House. I will do that over the summer. That is a promise.

Many energy developers have recognised the potential of the Isle of Anglesey to contribute to this major investment not just in new nuclear, but in marine energy and other technologies. You will know, Mr Robertson, from the time that we have spent together in the House that I am pro-renewables, pro-nuclear and pro-energy efficiency. I see no contradiction in that: I think that all three are needed if we are to meet our climate change goals and reduce emissions.

In the decade from 2001—when I entered the House—to 2011, the House of Commons was moving towards consensus on this issue. That was important. I accept that it was not universal, but there was a view that we needed a rich and diverse energy mix and that new nuclear was part of that mix. I was very proud to vote for the Bill that became the Climate Change Act 2008, because that was very pioneering of the UK; we were the first nation to introduce such a law. However, to achieve the objective, we need rich, diverse energy. We need base-load, and I will argue with the hon. Member for Kilmarnock and Loudoun that nuclear does provide base-load. He talks about offline, but this is factored in. Base-load is important, as is the intermittent status of renewables and, in particular, wind. He talks about figures, but I point out to him that we have had a very hot period over the last 28 days, and wind energy, offshore wind, contributed just 3% for that period. The rest came from base-load such as nuclear; the nuclear percentage went up in that period. I am therefore arguing convincingly for both—that we have the intermittent energy that we need in hot periods, but also, when we have cold periods, that we have the full load that is provided by nuclear and renewables. We need that balance.

New safe nuclear generation started in my constituency in 1963. Indeed, my father worked on the construction of the first Wylfa power station. The hon. Member for Kilmarnock and Loudoun had family who were in the nuclear industry: he told us in a previous debate that his brother-in-law was. Many families, across the United Kingdom, have benefited from the high-skilled, long-term employment opportunities that nuclear offers. The nuclear power station in my area was opened in 1971 and it produced up until the date of closure, which initially was 2010; that was extended to 2015. We are talking about 44 years of generation. I mention the jobs issue, because many of my peers at school left school and worked in the nuclear industry at Wylfa for all their working lives. Very few other industries can offer the longevity of employment and quality of jobs that nuclear brings; indeed, jobs for life are very rare.

Construction jobs are also important. In the move forward to Wylfa B or Wylfa Newydd, as it is correctly known now, we see an important uptake of skills for nuclear engineers and apprentices, and many people are training for the construction jobs—plastering, building, welding and so on. That is hugely important for areas on the periphery of the United Kingdom, such as at Wylfa in my constituency and, indeed, in Scotland. Scotland has benefited from nuclear over many years and still does today; £1 billion of gross value added comes from the nuclear sector—the two power stations. I believe—I will take an intervention if I am wrong on this—that the life of the two nuclear power stations has been extended by the SNP Government. Safe generation of nuclear energy is hugely important in Scotland, Wales and England. If we did not have it, we would be importing nuclear at this time of year from either England into Scotland or from France into the United Kingdom.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

The hon. Gentleman invited an intervention, and yes, he is correct: under the SNP Government, permission was given to extend the life of Hunterston B. Once an asset is there, if its life can be extended safely, we may as well do so. We will still have to deal with the toxic legacy at some point, but if we can make use of the asset in the meantime, we will do, so we are not absolutely blinkered.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

I understand what the hon. Gentleman says, but there is very little logic in that. If it is safe nuclear generation, it is safe nuclear generation. I accept that numerous previous Governments, of all colours, have not dealt with the legacy of nuclear waste. That is a fact, and we need to deal with it. But with new nuclear, the cost of decommissioning and of waste will be factored into the cost, which the hon. Gentleman did not explain; he did not take that out. The proper arithmetic of generation, of decommissioning and of waste will be part of the deal.

I do not know what the deal will be, but I do know that there will be some 850 jobs for the 60-year life of the new nuclear power station on Anglesey. That is huge for the local, regional, Welsh and UK economy. I also know that, at the peak, there will be 8,500 construction jobs. Again, that is a big figure. We have managed big projects in the past. I am thinking of the building of the nuclear power stations at Wylfa and Trawsfynydd and, indeed, the hydro at the Port Dinorwic storage facility. We have in north-west Wales a good legacy of these jobs, and I look forward to this project. Importantly, we are on the third round of apprentices. By the time Wylfa comes on board, there will be some 700 apprentices who have been trained in the area. Again, those are high-skilled jobs. They have had the opportunity not just to train in this country; many have been over to Japan and had the lifetime experiences that go with that.

The nuclear power station Wylfa Newydd has the support of Welsh Government. It has the support of the local council, which is Plaid Cymru led; it has the support of the Plaid Cymru Assembly Member; and it has my support. It has cross-party political support. That is important because of its potential.

The hon. Member for Kilmarnock and Loudoun is absolutely right to talk about the cost to the taxpayer of nuclear and other technologies. I have supported in the House of Commons a number of subsidies—I do not consider “subsidy” to be a dirty word—for offshore wind. When the cost was more than £100 per megawatt-hour and some people were arguing that we should not be doing it, that the cost was too much, I argued that by investing at that stage we would be able to bring costs down, and that has happened. It has happened with onshore wind, with renewables obligation certificates—ROCs—and with solar, and it can and will happen with new nuclear as well. As I have said, I support this because we need that boost.

As the Minister will know, I argued—but was unsuccessful—for the Swansea Bay barrage, because the same principle applies to marine energy. We need to invest now for the future and the price will come down. We need a special, ring-fenced costing for marine energy and I will certainly write to the Minister, to the Secretary of State for Business, Energy and Industrial Strategy and to the Chancellor of the Exchequer to get that into the autumn Budget, because it is important; we are missing an opportunity with marine.

What I am establishing here is that I am pro-nuclear and pro-renewables and that my judgment has been to invest in them all. That means public—taxpayer—liability initially. We can look at oil, gas and electricity. They were 100% supported by the state when they were nationalised industries, and many new stations that came on board were given that subsidy when they were producing energy.

The statement by the Secretary of State in the House of Commons on 4 June was an important step forward for Wylfa Newydd, for the nuclear industry and for British industry in general. As I said, I do not know the details, but I do know that the statement confirmed that Wylfa Newydd would produce some 6% of electricity going forward. Electrification of surface transport is the big challenge for this country, and that is in addition to the built environment. We need that low-carbon extra resource, which I know Wylfa Newydd can produce.

I do not know the details, but it has been confirmed that the model will be different and, as we see from reading the “Nuclear Sector Deal”, the cost will be less than that of Hinkley. That is for sure, because when the first array of offshore wind was produced and the cost was much higher, we argued that it would come down. The nuclear sector deal asks for a 30% reduction in costs, and that is an agreement between industry and Government. It is important that Wylfa Newydd will come in at a much lower cost than Hinkley; we will learn the lessons of Hinkley. The Hitachi deal involves private money, and Government money from the UK—we do not know how much, and I doubt that the Minister will be able to help us at this stage, because of commercial sensitivity—and, importantly, Japanese agencies and their Government will be supporting it.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

I appreciate the hon. Gentleman saying that it is a different model. Does that mean that the costs cannot be compared directly to Hinkley? If the Government are taking on more liabilities and taking a stake in the project, we cannot just say, “Well, it costs less than Hinkley in terms of strike rate,” or whatever.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

No, the important thing to remember is that this is proven technology. The reactors that will be used have been produced—four in the world—on time and on budget, and they are effective. That is the difference with the Hinkley model, which has not been used before, and the risk is therefore a lot less. I have been to Japan and seen this technology in place. I know there have been incidents in Japan, but a delegation from Anglesey did go there and see it.

Sadly, this debate is about ideology. It is not about a low-carbon future, but purely the dogma of the SNP, which wants to close down nuclear per se. It is using the Wylfa argument to do that. The SNP is absolutely wrong. I want to see a balanced, diverse energy mix. I want to see the case for new nuclear, new renewables, jobs and skills, and research and development, so that the UK can become a leader in tackling climate change.

In conclusion, I wish hon. Members a happy summer recess. If they really want to find out about Wylfa, they should come to Anglesey. It is a great place to work, as I have indicated, for many people who work in the industry and are associated with the industry. I can assure hon. Members that it is also a great place to live, and it would also be a good place for them to visit. I am proud that Anglesey is ahead of the game in pioneering energy development.

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland) 3:01 pm, 24th July 2018

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate Alan Brown on securing this debate. This is an important and pressing issue for the UK, because, as we have heard, all of Britain’s currently operational nuclear reactors are due to go offline by 2030. So there is a pressing need to address this energy question.

In Scotland, the nuclear energy sector is worth £1 billion a year. Although 1,000 people are directly employed in Scotland’s two nuclear power stations, which have four advanced gas-cooled nuclear reactors installed, 12,000 people are indirectly employed, through a large supply chain encompassing engineering and design, which is a huge benefit to the Scottish economy. This is, therefore, a pressing policy issue for not only the whole UK but Scotland in particular.

I find it extremely dismaying that there is this dislike of nuclear power production, when the sector presents so much opportunity for Britain to re-establish a lead. After all, Britain was the world’s first generator of civil nuclear power. That is, unfortunately, an industrial lead that we have lost through lack of planning and lack of rigour in the 1990s. We can, hopefully, re-establish that lead with a bit of imagination and boldness.

I have the pleasure of serving on the council of the Institution of Engineers and Shipbuilders in Scotland. In 2015, we presented a lifetime achievement award to Sir Donald Miller, inducting him into the Scottish Engineering Hall of Fame. He is Britain’s foremost electrical engineer and was almost singlehandedly responsible for the design and development of Scotland’s entire post-war electrical generation and supply system.

I was interested to hear what Sir Donald Miller had to say about Scottish energy generation today. When he was presented with his award, he delivered a speech, which I feel is worth quoting at length. He mentioned that when he retired as chairman of the South of Scotland Electricity Board, which is now known as ScottishPower, in the early 1990s, he could take a great deal of satisfaction from the fact that

“we could claim to have one of the most secure and cost effective systems world-wide. Some 60% of our energy was from nuclear and with the hydro we could, incidentally, also claim to be one of the greenest systems with the lowest carbon emissions…
The coal fired station at Longannet”— which was recently decommissioned and was groundbreaking when it was built—

“was used mainly for back up and profitable exports to England for the benefit of Scottish consumers.

Today we see a very different picture. The decommissioning of our conventional generation is fast approaching”— indeed, it has already approached—

“and yet there are no plans to replace the generating capacity at Longannet or the nuclear. Even more incomprehensible is that we shall, in a few years, be importing power for much of the time from the new nuclear station to be built just over the border in England at Sellafield. You may wonder just why Scotland (birthplace of so much engineering)”— a pioneer of nuclear energy—

“should be importing power we could well generate here, exporting highly skilled jobs in the process. And moreover ending up with the least reliable and insecure electricity supply that we have seen for a hundred years. And this at a time when electricity has never been more important in the lifeblood of modern society.

We seem to be drifting into this situation with our eyes shut;
just hoping it will be all right on the night. But with no electricity for twenty four hours (and perhaps even longer) it will seem a very long night indeed.

No engineer would set out to build a complex structure without a detailed plan and an electricity supply system is no different in this respect from a road network or an aircraft carrier. But there is no plan and nor is there any significant engineering input into the main decision making.”

That is a chilling statement, coming from someone of such repute, about the current state of Scotland’s energy system. That drives me to understand that there is an urgency here that we are not recognising but that we must address with imagination. The Scottish Government have been found utterly wanting for their lack of willingness to embrace new technologies when it comes to nuclear energy.

I have had the pleasure of twice visiting Torness nuclear power station, where the two advanced gas-cooled reactors are situated. The great tragedy of that advanced gas-cooled system is that the entire power station is limited by the life cycle of the reactor. The infrastructure around the reactors is highly modern. It is a great shame that, in 2030, infrastructure that could continue operating for many decades afterwards has to be closed and dismantled, because the reactors themselves cannot be moved and dismantled safely without that whole system being shut down.

Yet, there are emerging technologies that offer great opportunities, such as small modular reactors, which Britain will potentially pioneer, with Rolls-Royce in the foreground. I am hopeful that that is something that Scotland can look at and embrace. Not only can we secure the sector, which, as we know, is worth £1 billion and 12,000 jobs, but we can achieve so much if we are on the front foot. When I was working for BAE Systems at Govan shipyard, we looked at how we could develop and manufacture small modular reactors in the shipyard, thus sustaining not only nuclear supply, but our shipbuilding industry. There are huge opportunities for coastal locations.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

I was pleased that the Government launched the nuclear sector deal in Trawsfynydd. Trawsfynydd is a decommissioned station, but it has the infrastructure in place, and it has a community that understands and accepts nuclear energy for the future. I believe that putting the two together will benefit those communities and the whole of the UK.

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

I thank my hon. Friend for that timely intervention. We have to think about this outside of these silos of energy generation. Although we want to decarbonise electricity in the UK, which is a laudable and vital aspiration, if we are to tackle the problem of climate change, it is critical that we recognise that nuclear has to be part of that mix.

Renewables, although we hope that they will eventually substitute all energy generation in the UK, are simply not mature enough, in terms of their reliability, to deliver output that is secure enough. The variability of wind is proving to be problematic. July’s wind energy is 40% lower compared with the same period last year. That is simply not sustainable enough for us to generate reliable energy sources in the UK. We have to look at other technologies, and nuclear presents an opportunity. We are not talking about rebuilding advanced gas-cooled reactors, which was a technology developed in the 1960s—it was advanced for the time, but is simply obsolete today. We are not talking about rebuilding that, with all the legacies of toxicity and problems with waste disposal that were mentioned, although I have to say that the advanced gas-cooled reactor fleet in the UK is a global benchmark for safety. I do not think there are any substantial risks associated with the advanced gas-cooled reactor fleet—it has had a tremendous safety record in the UK, which is a great triumph of British engineering.

We have to approach this with an industrial strategy; that is where we have to grip this. We are talking about shipbuilding and energy generation. All of those things can be linked to deliver a huge industrial and economic benefit for the UK.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

The hon. Gentleman is talking about emerging technologies—if new nuclear is an emerging technology. I presume he would welcome investment in carbon capture and storage in Scotland, and investment in tidal. The Scottish Government are not saying no to nuclear and no to new technologies; they are going to welcome wider technologies that are completely renewable and that do not have the potential toxic legacy of nuclear.

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

That is an entirely legitimate point to make. We want to push on all fronts. We want Britain to be leading the world on all fronts. That requires investment in battery technology, where we have a huge disruptive opportunity. Let us push on that front. Let us push on carbon capture and storage. Again, the problem is that we have no rigorous industrial strategy. When I worked at Scottish Enterprise, for example, we watched Longannet drop off a cliff, with no plan for its succession and how it would be managed. As a result of that, we saw the collapse of Hunterston ore terminal in Ayrshire, which has now lost all its customers, because it was the input point for the transportation of coal to the power station.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

Longannet collapsed because it was no longer economically viable, due to the amount Longannet had to pay to connect to the grid, which is all based on distance from the population of London. Does the hon. Gentleman accept, therefore, that that is a UK Government failure, not a Scottish Government failure?

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

The issue was a joint problem because we did not embrace the possibility of carbon capture and storage at Longannet. Nor, as the hon. Gentleman mentions, did we address the calculation system and the price charged for generation at Longannet—we have to address this issue on all fronts. Longannet was a failure because, ultimately, the jobs and industrial benefits were lost. As a result, we now have a large brownfield site that will cost a lot of money to clear up, for want of a proper succession plan and a proper strategy.

I urge all Governments to get a grip. I do not lay the blame on any one of them. I am describing the reality that faces the community and our country now, and it is about time we gripped it. I urge people to get together to sort it out. We have a lack of strategy in dealing with succession planning when it comes to closing down our nuclear fleet and also our conventional coal-fired fleet, so we have to address that. We must have a strategy. We have the opportunity.

Emerging technologies, such as the integral fast reactor, which is under development, will address the waste problem in nuclear. As Professor David MacKay, the chief scientist at the former Department of Energy and Climate Change, said, the reactor could supply all the UK’s energy needs for 500 years by consuming the UK’s existing stockpile of waste. That also addresses the decommissioning of the nuclear submarine fleet and the nuclear weapons at Aldermaston. It is a huge cycle that we have to address, and currently we are not gripping it.

We have a huge opportunity to embrace these technologies and use them as a basis for Britain to re-establish a global leadership position in civil nuclear energy that addresses the huge legacy of problems that we have had with nuclear. This is not about saying we can write nuclear off because the technology developed in the 1960s was flawed; it is about saying we are where we are and there are opportunities to utilise nuclear not only to deliver a low-carbon generation capability, but to address toxic waste issues. It is about developing, regenerating and manufacturing an advanced engineering base.

That is why I urge everyone to be open-minded when approaching the issue of new nuclear technologies in the UK and to look at new technologies that can benefit the Scottish and UK economies. That is how we and the trade unions are approaching it, and it is an entirely legitimate and open-minded approach. I am dismayed that the SNP will unconditionally block any potential exploitation of the opportunity in Scotland at Torness or Hunterston. That is a great tragedy for Scotland, a nation that has done so much to be a world leader in civil nuclear technology. I hope the SNP might look at those technologies and change their minds.

Photo of Ronnie Cowan Ronnie Cowan Shadow SNP Spokesperson (Infrastructure) 3:12 pm, 24th July 2018

It is a pleasure to serve under your chairmanship today, Mr Robertson. It is less of a pleasure, however, to scrutinise the shoddy deal that taxpayers are being offered on the Wylfa power station. My hon. Friend Alan Brown asked a serious question: why nuclear now that so many renewable energies are available? If we invested in them properly, we would see the renewable sector move into a new field, a new area of prosperity that would be more clean and bountiful, so why are we not investing in all the alternative clean energies as well? Why are we repeating the mistakes of the past? Asbestos was going to be a great new product, but now we live with the dangers and the costs it caused.

My hon. Friend stressed the line we were fed that without Hinkley coming on line in 2017 the lights will go out. The lights are on, the air conditioning is working overtime and Hinkley is still not contributing to that. Albert Owen said he had produced a booklet, which I really look forward to reading, that promotes nuclear and clean renewables. I hope it will be better than the booklet that was produced by the UK Government in the ’70s that said, “In case of nuclear attack, hide under a table.” [Laughter.] It said hide under a table or in the cupboard under the stairs. I remember reading it as a child and being pretty frightened.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Will the hon. Gentleman give way?

Photo of Ronnie Cowan Ronnie Cowan Shadow SNP Spokesperson (Infrastructure)

Certainly. I have been waiting for the hon. Gentleman’s intervention.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

I was born and raised on Anglesey. My children were born and raised on Anglesey. Safe nuclear generation has been with us for 40-odd years. That is the reality. Silly scaremongering about atomic power and nuclear bombs does not do justice to the spokesman for the SNP.

Photo of Ronnie Cowan Ronnie Cowan Shadow SNP Spokesperson (Infrastructure)

As I was born and raised within a short distance of Hunterston power station, I understand that people worked on building that station, but we are talking about power that can cause so much destruction that we cannot possibly comprehend it. I agree we need a balance, which is why I support wind, wave, tidal, solar and hydro as part of the mix. I want us to progress so that we do not need nuclear as part of the mix. That is the ideal situation that we should work towards.

The hon. Gentleman correctly highlighted job creation, but obviously the jobs are where the investment is. He highlighted the lack of support for the Swansea tidal bay, which is an absolute travesty by this Government. It was a great opportunity to invest in renewable energy and see where that could take us. How many jobs would that create in Swansea and how many within the supply chain around it?

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

The hon. Gentleman talks about a comparison with asbestos and the idea that nuclear energy generation is somehow inherently toxic. What does he say about the integral fast reactor or the small modular reactor technology that consumes nuclear and therefore solves the problem that he claims exists? That is surely to be welcomed and embraced.

Photo of Ronnie Cowan Ronnie Cowan Shadow SNP Spokesperson (Infrastructure)

As I said, we are working towards a mixture of renewable energy. Ideally, if we could do away with the potential dangers, we should do so. One can say that about absolutely any industry. The coal mining industry was a dangerous business. We always worked to minimise the dangers, which is what we should do in the case of nuclear energy. If we can do it with nuclear as part of the mix, that is what we should work towards. We should invest in new measures to see if we can attain that. We should learn the lessons of Hinkley, a point made by the hon. Member for Ynys Môn. I hope we will learn the lessons of Fukushima as well.

Mr Sweeney said that nuclear was once seen as the future in the United Kingdom. He is right: it was once seen as the future. It was also seen as the future in Germany and Japan, but they have moved on. Unless we want to be left behind in areas of technology, we have to move on as well.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

On that point about Germany, an alliance or agreement with the Greens meant that they shut their nuclear capacity down, but now emissions have gone up as they import gas from Russia. They also import coal from Poland.

Photo of Ronnie Cowan Ronnie Cowan Shadow SNP Spokesperson (Infrastructure)

Obviously the Germans decided to bite the bullet while they heavily invest in renewable energy. If we do not do the same thing, in five or 10 years from now they will be way ahead of us and we will look back and ask why we did not do that.

We should be alarmed at a report in The Times that states that Hitachi will refuse to pay its fair share for nuclear accidents at Wylfa, with directors supposedly wanting

“safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”.

This is the same company that has been accused of lying to the US Government by concealing flaws in one of its nuclear power plants. It is a company in which a whistleblower said after the Fukushima disaster:

“When the stakes are raised to such a height, a company will not do what is safe and what is legal.”

It is a company that may be expected to pay only €1.3 billion in the event of a nuclear incident, even if such a disaster costs the UK hundreds of billions in damages. Pursuing nuclear energy is a folly, as my hon. Friend the Member for Kilmarnock and Loudoun has clearly outlined. Like so much of its ideology, Tory thinking is stuck in the 1950s. UK Government policy on energy seems to be no different.

Support for renewable energy has been slashed while taxpayers are expected to foot the bill for truly eye-watering levels of funding for nuclear stations such as Wylfa. That is irresponsible and avoidable. I was always under the impression that the Tories were the party of small government and of making prudent financial decisions, or so they like to tell us. Yet they saddle the taxpayer with more and more and more debt. Wylfa is just another example of a poorly negotiated deal for the taxpayers that the UK Government are supposed to represent. Of course, that is only considering the immediate financial and environmental impact. It goes without saying that the UK Government, by committing to Wylfa, are burdening future generations with the toxic legacy and cost of nuclear waste. I can think of few greater impositions of a Government on the rights of an individual than that.

I recently read with interest that survivors of the Fukushima disaster visited Wales to warn against the building of new nuclear reactors. In their first-hand testimony they outlined the devastating impact that the disaster had on local agriculture, with some people still unable to return to their homes seven years after the incident. Is a serious nuclear incident likely at Wylfa? Perhaps not, but having the station at all makes it a possibility. Why take that risk when the operator of the station may not even be liable for costs in the event of an accident? Why take that risk when the company in question was forced to pay a fine in response to allegations that it had lied to US regulators over safety concerns? Why take that risk when other sources of energy are available? We need urgent reassurances regarding the contract—the costs, liabilities and environmental impact.

Finally, are the UK Government serious about developing an energy policy fit for the 21st century and beyond? If so, they should abandon their nuclear obsession and look to the Scottish Government for world-leading ideas on the best transition for our nations into being responsible producers of energy.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change) 3:20 pm, 24th July 2018

I thought I would break with convention and attempt, this afternoon, to address my remarks to the debate whose title we have before us. The debate is about taxpayer liability for safety at the Wylfa nuclear power project. The matter has been dealt with in passing by Ronnie Cowan and my hon. Friend Mr Sweeney, as it featured in the wider canvas of what they said about nuclear power in general and about what is, I am afraid, an attitude of dislike for nuclear in any way, shape or form. Analytically, the proposed Wylfa plant comes into that overall definition and, therefore, it needed to be treated in that particular way.

That is in contrast, of course, to my hon. Friend Albert Owen. I have known him, and we have fought many energy battles side by side, for many years. I can attest to his strong support for and deep understanding of the role that renewable energy plays in our energy mix, alongside his support for nuclear power and, indeed, the potential nuclear power station in his constituency. He spoke eloquently on both those issues.

In responding to the debate, I want to concentrate on what one might say is a narrower issue, but which gets to the heart of what we are talking about in terms of new nuclear over the next period. I want to distinguish between support for new nuclear in principle, and sober, detailed analysis of what deals and arrangements might result from resetting the button, so to speak, or pushing the button for new nuclear deals. What is under that button when we push it?

The problem with the proposed new Wylfa plant is not that a terrible deal will necessarily lie ahead; it is that we just do not know at the moment what that deal might consist of. There are, however, indications from the Japanese press, which I of course must read in translation, although I am sure the translations are reasonably accurate. They tell us quite a few things about what a new deal for Wylfa might mean, including that it is possible that the UK Government have already signed a memorandum of understanding with Hitachi, and possibly the Japanese Government, on how a deal might proceed. They also talk about possible investment by the UK Government in a new Wylfa deal, and—this also appeared recently in the UK press—about what Hitachi says it may or may not do in relation to liability for safety incidents and nuclear accidents at the proposed plant: whether it will seek, as part of the deal to go ahead with the plant, to water down, or remove itself from, some of the liabilities it would otherwise expect to be subject to for nuclear accidents and nuclear safety matters.

I emphasise that those issues are suppositions in reports that are coming out. On 4 June, when the Secretary of State made a statement about the in-principle negotiations that were being entered into, and my hon. Friend Rebecca Long Bailey asked whether

“Hitachi is seeking to ‘reduce or eliminate’
its financial responsibility for accidents”—[Official Report, 4 June 2018;
Vol. 642, c. 78.]

he had nothing to say in response. Nor, indeed, had he anything to say about whether any deals had been entered into already, in principle or otherwise, and what the deals might look like. At the moment, we appear to have taken a step forward in agreeing to look at further activity in developing Wylfa, but what that would entail is shrouded in mystery. To my mind, that is not a good way to proceed with such arrangements. We need transparency from the word go, clear understandings of what is proposed, and the ability to analyse and look into the proposals as they proceed, not least for two reasons, which I shall put forward in a moment.

We are in a strange position, talking about an issue that we should, but do not, know quite a lot about—although the Government could tell us, but apparently will not at the moment. That may sometimes be for reasons of confidentiality, or because some of the reports are not accurate, or because the Government simply have not decided yet which way they will go. As to liability for safety in relation to the Wylfa nuclear project—the subject of the debate—it is certainly worrying that, if the reports are true, Hitachi may be seeking to downplay its possible liabilities as a way to continue with the negotiations, and might be looking to the UK Government to loosen the conditions on liability for nuclear accidents and nuclear safety as part of the process.

The reason that is particularly worrying is that, as Alan Brown mentioned in his opening comments, liability for nuclear accidents and nuclear safety is not something set out on a piece of paper in a box somewhere that can easily be negotiated away. It is actually defined by the Paris convention of 1960 and the Brussels convention of 1963. Those are updated by protocols through the EU, but the conventions are international, as such, and they provide some pretty clear lines about who is responsible for what, as far as safety and nuclear accidents are concerned. They place a strict liability on the operator—that is liability without having to prove fault, with exclusive liability of the operator. They limit the operator’s liability with respect to amount, time and the type of damage that is subject to compensation, and they place an obligation on the operator to cover that operator’s liability by insurance or other financial security.

Those principles have been drawn into UK law, most recently through some wonderful statutory instruments with which the Minister and I have become very familiar. A series of statutory instruments has been passed between 2016 and 2018, and a key one was passed in 2016. Essentially, that legislation was on bringing those protocols into UK law, together with the increased liability that doing that entailed.

I will not go into detail, but the 2016 secondary legislation essentially means that a substantial liability should be insurable, subject to liabilities over a certain level essentially being socialised through Government intervention if they exceed that total. There is a culmination principle of substantial liability and expected liability—underpinned not just by UK legislation, but by international convention—that applies to any nuclear power plant operating in this country.

That is perhaps the nub of this potential problem. If the UK Government were to discuss with Hitachi what could be done in loosening its liabilities for nuclear safety and nuclear accidents at the Wylfa plant, they could not do that by providing a little wayleave for Wylfa power station, and expect all other power station operators to continue according to the Paris and Brussels protocols. They would have to breach those protocols, and replace UK legislation in so doing, and would then need to make all liabilities for all nuclear power stations of a lower order. That seems to me very significant, given what the reports coming out of Japan say about what Hitachi will and will not do as far as nuclear accidents and nuclear safety are concerned.

I would be interested to hear whether the Minister thinks that the analysis I have presented is essentially where we should go regarding nuclear safety and nuclear accidents. If she does think that, and if she agrees that such action would reduce liability for nuclear power stations across the board, the suggestion that there should be any negotiation with Hitachi on liability for safety and nuclear accidents separate from everybody else should set serious alarm bells ringing.

Has Hitachi made any suggestions that it will not pay by way of insurance for nuclear accidents and safety at the Wylfa plant? What has the UK Government’s reaction been to that? How do the Government see those suggestions —if indeed they are real suggestions—folding into wider discussions about the plant in general?

I should not turn down the opportunity to mention some wider issues regarding the negotiations. As the hon. Member for Kilmarnock and Loudoun also said in his opening remarks, we need to be careful of simply assuming that if a deal for the Wylfa power plant comes forward and produces—apparently—a lower strike price than Hinkley, everyone will be out of the woods and that will be the end of the matter. That depends entirely on what other deals are brokered as to other aspects of investment and underpinning the project’s capital, and on any agreements about the nature of those capital assets that may be entered into as the project moves forward.

We heard in the Secretary of State’s statement that the Government are considering putting assets on a regulated asset base arrangement, possibly in the context of Wylfa or of other nuclear plants. We do not know exactly what the British Government have signed us up to or will sign us up to regarding investment in the new Wylfa plant, but let me explain my understanding of regulated assets as they relate nuclear power stations—this is a possible model that could be carried out for successors to Hinkley C. Placing assets on a regulated asset basis would effectively mean that the taxpayer—the customer—would have the risk transferred to them before the plant was built. They would be paying an amount of money, which would be taken out of bills, to underwrite that risk as the plant developed.

Under the current arrangement, a strike price would be agreed after the plant had started production and the customer would then pay. We have argued, as have many others, that the amount the customer will pay in relation to Hinkley C will be about twice the prevailing price for electricity over the period, because of those strike price arrangements. If the strike price is reduced, but the customer then has another liability while the plant is being built, not only does that add up roughly to the original position, but the customer will be paying up front before any power has been produced. If there are cost overruns or delays in production, the customer will continue to pay for that while the plant is finalised.

The Government’s stated position is that they will not undertake any more levy liabilities before 2025—the new doctrine produced in the Treasury recently. Customers may well pay that money before 2025, if this power station goes ahead in the way suggested, and therefore incur levies in breach of the Government’s stated position.

There is a lot to think about regarding what might be the terms of these negotiations, and as I have said consistently in this debate and elsewhere, we are still substantially in the dark as to what those negotiations might be. We need not to be in the dark so that we can discuss those implications and between us ensure that, should there be a deal for Wylfa, it is not just a good deal that gets Wylfa online, but a good deal that gets Anglesey online, with its power plant and all the things that go with that. That point was mentioned by my hon. Friend the Member for Ynys Môn. It must also be a good deal that Members of the House can frank on the grounds that it is good for customers, good for safety and good for the future of the nuclear power industry. At present, we are a very long way from that, and we need a lot more light shone on this arrangement before we can be sure that we will get the deal that we need.

Photo of Claire Perry Claire Perry The Minister of State, Department for Business, Energy and Industrial Strategy, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth) 3:38 pm, 24th July 2018

It is a pleasure to serve under your chairmanship this afternoon, Mr Robertson. While I have the floor, may I take a moment to thank the Clerks and those who work so hard across the House of Commons to ensure that these debates take place? I particularly thank the Hansard reporters who are a miracle of accuracy, regardless of the quality of the debate—I just wanted to put that on the record before we go off on our summer holidays, although as we know, none of us are going on holiday; we will all be working hard in our constituencies.

I thank Alan Brown for securing this debate. We have had important conversations today, including two very stirring speeches from the hon. Members for Ynys Môn (Albert Owen) and for Glasgow North East (Mr Sweeney). I could not have made the case better myself—I will not try to, because Members probably do not want to hear me talking about that—but a point was made about having an energy supply that is diverse, strong, reliable, low cost for consumers, low carbon and, crucially, able to create innovation for reinvestment in the UK and for export.

I pay tribute to the long experience of the hon. Member for Glasgow North East in the shipyard. As he will know, if we had thought more about export potential when making some industrial decisions in the past, we would not have lost those high-skilled jobs. To reassure him, I was at the Cammell Laird shipyard two weeks ago to help to launch Boaty McBoatface. It was wonderful to see what £200 million of Government investment in polar research has delivered for that shipyard—thousands of jobs have been created and it has been able to bid for large-scale projects again. I enjoyed the speeches.

I will try to address the specific questions about safety, incidents and long-term liabilities. The hon. Member for Ynys Môn made a powerful case about our heritage. We should all be proud that we are leaders in the global civilian nuclear community in terms of safety and regulation, which we have built up extremely well over the years.

In this country, we do not set energy policy on the basis of ideology but on the basis of the test that I have discussed, so we will not make the mistakes of countries such as Germany. Last year, I was at the Conference of the Parties in Bonn to debate climate change, and barges of brown coal were sailing past the COP site—putting two fingers up to those who believe in reducing emissions and getting coal off the grid.

We all like to look at our apps, and there is an excellent one that tells us about the energy mix in the last 24 hours. We have burned no coal, which is excellent, and we used a bit of wind, which made up about 6% of the energy supply. Of the rest, 25% was from nuclear, 50% was from combined-cycle gas plants, some was from biomass and some was from interconnectors.

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

Last year, for the first time since industrialisation, the country did not burn coal for energy generation, which was a huge milestone. The Minister talks about the huge industrial benefits and the benefits to the wider economy. Does she also recognise the benefits of the nuclear advanced manufacturing research centre in Rotherham, which has re-established large-scale casting capabilities in Sheffield—an industrial capability that had been lost in the UK?

Photo of Claire Perry Claire Perry The Minister of State, Department for Business, Energy and Industrial Strategy, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth)

The hon. Gentleman is absolutely right. I will make reference to the nuclear sector deal that invests in the small modular reactor technology that he talked about and that engages with the industry and its supply chain by investing in innovation and skills and by thinking about what we can generate and export in the UK. I also pay tribute to the organisation that he mentioned.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

The Minister quoted the figure that 25% of electricity generated in the last 24 hours was from nuclear. In 2016, on average, nuclear supplied 21% of the energy mix, so 25% is not a huge variation and does not demonstrate the massive reliance that would mean we need to have nuclear forever.

Photo of Claire Perry Claire Perry The Minister of State, Department for Business, Energy and Industrial Strategy, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth)

The hon. Gentleman and I know, because we form a holy trinity of debating on energy matters with my friend, Dr Whitehead, that we all look forward to that 100% renewable future, but the problems of intermittency and storage will not be solved in the near term. We will not make ideological decisions that will put up costs and restrict energy supply if we do not have to—and we do not have to, because we have one of the best and most diverse energy mixes in the world.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

The figures that the Minister mentioned put gas at 50%. The big challenge is getting rid of gas boilers, which are in most houses. Moving to electricity will require a base-load from somewhere other than gas, which could well be nuclear.

Photo of Claire Perry Claire Perry The Minister of State, Department for Business, Energy and Industrial Strategy, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth)

The hon. Gentleman is right, but we should start from where we are on energy policy. There is a role for further decarbonising gas to keep it in the mix, which is why I am keen to investigate, using excellent environmental standards, the potential contribution of onshore shale gas. [Interruption.] He is chuntering; he may not agree.

We have an independent regulator, the Office for Nuclear Regulation, which has scrutinised the proposed reactor design for Wylfa. The design has received design acceptance, which means that all regulators are satisfied that the reactor meets the regulatory expectations on safety, security and environmental protection at this stage of the process.

The hon. Member for Southampton, Test invited me to talk about the media reports—he is doing better than I am if he is reading the Japanese newspapers. I reassure him that any operator in the UK is required to obtain insurance to fulfil their financial responsibilities in the event of an accident, and as he referenced, international treaties, such as the Paris and Brussels conventions, provide the framework for the management of nuclear liability in the UK.

This deal will be no different. I emphasise that we are still going into negotiations and having conversations—we have not done the deal yet—but we are absolutely clear about the commitment to insurance for any form of accident. Not putting decommissioning liabilities on the taxpayer, as the hon. Member for Ynys Môn pointed out, is also part of those calculations. I agree with him that we did not think hard enough about that in the past; successive Governments had not worked out how to include those liabilities. We have learned, however, and we are moving forward with that.

Before the reactor can be built and operated, it will need a nuclear site licence. Wylfa will also always be subject to environmental permitting through Natural Resources Wales. A development consent order process that will run under the Planning Act 2008 will scrutinise the construction and operation proposals for the project.

The Energy Act 2008, passed by the Labour Government, introduced the funded decommissioning programme that moved the dial on who pays for decommissioning liabilities. It is now the case that all operators of new nuclear power stations are legally required to have secure financing arrangements in place to meet their full share of the costs of decommissioning and of waste management and disposal. We are absolutely committed to managing radioactive waste safely, responsibly and cost-effectively for the long term, but also to looking at other opportunities to reprocess some of that waste, as the hon. Member for Glasgow North East said. We will not repeat past mistakes where the taxpayer had to foot the bill for decommissioning.

There were some questions about liability in the event of an accident. I am happy to say that the last significant incident was the Windscale fire in 1957, and we are light years away from that plant in terms of nuclear operating technology and the safety regime that we operate. The Nuclear Installations Act 1965 makes the insurance that I mentioned a requirement, without which operators cannot operate. As the hon. Member for Southampton, Test mentioned, we also have legislation based on the Paris and Brussels conventions. If the total cost of claims ever exceeded €1.2 billion, a further €300 million would be provided by all contracting parties to the Brussels supplementary convention. Any further claims above that total would be met at Parliament’s discretion.

The only liability-based agreement with Hinkley Point relates to insurance failure, and the Government will provide an insurance product in the event that one cannot be obtained on the market. I am not in a position to comment on what might be the case with Wylfa, but I emphasise that the operator of the plant at Wylfa will have the same obligations as all other nuclear power stations and installations in the UK, and will be required to fulfil those obligations in the event of an incident.

Hon. Members have asked about what happens with the Brexit negotiations. Nuclear safety is and always will be our top priority. We will continue to apply the international standards on nuclear safety specified by the International Atomic Energy Agency irrespective of our future relationship with Euratom. I emphasise that we want a close association with Euratom: a new relationship that is broader and more comprehensive than any existing agreement between Euratom and a third country. The Nuclear Safeguards Act 2018 provides the reassurance of a backstop in the very unlikely event of any changes.

Alongside that, the UK is negotiating nuclear co-operation agreements to add to those already in place. On 4 May, we signed a bilateral NCA with the United States, and we have further arrangements with Japan, Canada and Australia that are also on track. Those relationships facilitate the sharing of best practice in terms of nuclear operations and liability management. As I said, we are considered to be a proud leader internationally in the field of nuclear safety and regulation.

Further investment will bring huge benefits through innovation. My right hon. Friend the Secretary of State travelled to Wales to launch the nuclear sector deal on 28 June, which was a fitting setting to underline how the nuclear industry provides economic opportunities across the UK, particularly in more remote areas, as we have heard from many hon. Members. The nuclear sector deal is worth more than £200 million. It focuses on innovation and skills, which we can then use to export, and by striking it we aim to ensure substantial cost reductions across the nuclear sector, to ensure that the sector can remain competitive with other low-carbon technologies, because I constantly have to balance all investments with the potential pressure on consumers’ bills.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change)

It would be really helpful if the Minister were able to indicate, either today or very shortly, when she will be able to place on the record the shape of the negotiations on Wylfa—the main components of the negotiations, what has already been agreed in principle and what remains to be discussed. I do not know whether she can do that in the near future, but it would be helpful if she could indicate at an early stage when it might be possible.

Photo of Claire Perry Claire Perry The Minister of State, Department for Business, Energy and Industrial Strategy, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth)

I appreciate the hon. Gentleman’s desire for transparency, but obviously I cannot do that, because doing so would prejudice negotiations that are ongoing. He will know, based on his long experience, that there is an interplay of costs, of contracts for difference numbers, and of potential asks from the UK Government and from shareholders, and these negotiations are long and complicated.

Part of the challenge, if you like, with large-scale nuclear is that a very large, up-front cost is associated with it; it is a very capital-intensive investment, although one that we want to make for the reasons I have mentioned. However, the conversation that we had earlier was about small modular reactors, which require less up-front investment, have more flexibility and allow us to invest in multiple sites, which are reasons why such reactors are so attractive; they allow us to spread those up-front costs much more widely.

In conclusion, this debate has been a very good opportunity to emphasise again the value of nuclear in our energy mix; to reassure people in this House and elsewhere that the UK Government will not make energy policy based on ideology but will soberly assess the cost, the innovation, the carbon and the security as we go forward; to celebrate the fact that we have one of the most robust nuclear safety regimes in the world, including world-leading independent regulation; to note the fact that people are hungry to see the details of the Wylfa deal and I will make sure that my right hon. Friend the Secretary of State, who is of course conducting those negotiations on our behalf, is aware of that; and, essentially, to reassure the House and others that—as is the case with all other nuclear generation in the UK—Wylfa will be a safe source of energy and one that minimises any form of liability being borne by the taxpayer.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy) 3:52 pm, 24th July 2018

Thank you again, Mr Robertson, for your chairmanship today.

Dr Whitehead touched on this—some of what has been presented today is supposition based on information that we have been able to glean from the media, so it could be argued that this debate was premature. However, I wanted to get such supposition out in the public domain and challenge the Government on it.

We should not be learning things from the media, but that is what has been happening in the case of Wylfa. After the first speculation about the Government discussing financial arrangements about the tax on Wylfa, I tabled a parliamentary question. That was in mid-May, but I was not able to get a meaningful response because of commercial confidentiality. Eventually, the Government made a statement on 4 June. So, while we hear about checks and balances and scrutiny, in many ways we are denied that scrutiny because of the cloud of commercial confidentiality.

I welcome the fact that the Minister categorically stated that Wylfa will have the same obligations on accidents and liability as all other nuclear power stations and nuclear power operators, and I hope that proves to be the case in the final arrangements. However, I will contradict myself slightly by saying that I hope we do not get the sign-off on those final arrangements, because of what I have said about attitudes to nuclear. I also remind the Minister that the National Infrastructure Commission’s assessment was that there should only be one new nuclear deal by 2025; again, I look forward to the Government reflecting on that.

I thank all the hon. Members who have taken part in this debate and, like the Minister, I also thank the Clerks for their work and the Hansard reporters—particularly in my case, they have a real hard job and they do it well. It is amazing to pick up a copy of Hansard and suddenly think, “Oh, that makes me look coherent”, so they do a marvellous job. I hope that all other members of staff have a good recess, as well. And again, thanks to everyone who participated in the debate.

Question put and agreed to.

Resolved,

That this House
has considered taxpayer liability for safety at the Wylfa Nuclear power project.