Official Report of the Grand Committee on the Energy Bill [H.L.]

HL Deb 20 January 2004 vol 657 cc253-310GC

(Second Day)

Tuesday, 20 January 2004.

The Committee met at half past three of the clock.

[The Deputy Chairman of Committees (Lord Brougham and Vaux) in the Chair.]

The Deputy Chairman of Committees (Lord Brougham and Vaux)

Welcome to the Grand Committee on the Energy Bill. I am not going to read out the preamble. I shall merely remind the Committee that members should speak standing and that the proceedings will be recorded in Hansard. Speakers on the Back Benches should place themselves near a microphone so that Hansard staff may record them. There will be no Divisions. If there is a Division in the Chamber, which I believe there may be, speakers should stop speaking and the Committee will adjourn for 10 minutes.

Clause 5 [Supplemental provisions of designating directions]:

[Amendment No.13 not moved.]

Lord Dixon-Smith moved Amendment No. 14:

Page 5, line 8, after "payments" insert "from any revenues accruing to the installation, site or facility"

The noble Lord said: As a prologue to the amendment, perhaps I may express my gratitude to my noble friend Lord Jenkin of Roding for taking on board my amendments last week when I was unable to attend. He has a frightening ability to read my mind and I am most grateful to him.

This is a small amendment that I have tabled to probe the Government's thinking about the sentence at the end of Clause 5(2). It refers to a direction giving the NDA responsibilities and, may require the person with control of the installation, site or facility to make payments to the Secretary of State".

My mind went straight back to the 14th century, when offices of profit were issued under the Crown and I found myself thinking, "What on earth are we talking about?" Why on earth is the poor individual, who may receive only a modest salary, making payments to the Secretary of State because of his responsibilities? The amendment is intended to probe the background to that simple statement.

It is not quite that simple. Clauses 3 and 4 deal with the responsibilities of the Nuclear Decommissioning Authority. That is perfectly plain and straightforward. Clause 5 also deals with the business of the Nuclear Decommissioning Authority, until we come to the last sentence when, suddenly, an unspecified individual is required to make payments to the Secretary of State.

The individual may well be someone who is working in an appointment given to him by the Nuclear Decommissioning Authority, so there may be some rationale behind it. It may even be that this is an antique Bill-drafting convention that dates from the 14th century and that it has always been expressed in that way. In which case, all I can say is that it is time we changed. I find that wording in the Bill very strange. That is why I have tabled the amendment. I beg to move.

Lord Jenkin of Roding

If the money does not come from the revenues accruing to whomever is the operator of the site, where will it come from? The Government's answer may be that that is the only conceivable source and that we do not need to write that into the Bill. However, anyone reading the Bill might say that the authority can come along and simply make a charge for whatever reason. That would bear no relation whatever to the revenues that might be accruing from the operation of the site. My noble friend has made the case that the issue should be clarified. It is not clear at all.

Lord Davies of Oldham

The noble Lord, Lord Dixon-Smith, tempts me. There was a time when I was an expert on Tudor economic documents and I would love to follow him down the byways of yesteryear, when corruption was the order of the day and the only way in which the state was run. However, I shall resist the temptation and attempt to tell him what the clause is intended to achieve.

The noble Lord's amendment would remove the polluter pays principle. It would limit a private sector operator's liabilities for clean-up to future revenues from the installation or facility concerned. But, as the noble Lord, Lord Jenkin, said, it is unlikely that there would be future revenues.

Where the NDA takes on designated responsibility for securing the clean-up of a site—for which it does not bear the financial responsibility, let me make that clear—the Government's intention is to recover the costs of clean-up from the operator concerned. That is an absolutely fundamental point to which we adhere.

That responsibility does not rest on the installation and its ability to cover its own clean-up costs; it applies to the operator under the existing statutory and regulatory regime. Whether or not a particular installation has generated sufficient revenue, the operator is not absolved of his responsibility to discharge any and all liabilities that arise as a result of operating that installation.

The NDA is likely to be involved only when an installation has to be decommissioned and cleaned up. No further revenues are then likely to be forthcoming. If insufficient provision has been made for the decommissioning of a plant from its own revenues, that would lead to a shortfall that the NDA would be unable to recover. We should not limit the scope of the NDA to recover its costs in this way.

Accordingly, on the clear principle that the reason the legislation is drafted in this way is not a carry-over from 16th-century economic legislation but to adhere to the principle that the polluter pays, I hope the noble Lord will feel that his amendment would detract from that fundamental position.

Baroness Carnegy of Lour

Having heard the Minister's explanation, may I ask the noble Lord whether, if the installations, sites or facilities have polluted Scottish land, the payment would be made to the Secretary of State for Trade and Industry, to the Secretary of State for Scotland or to Scottish Ministers.

Lord Davies of Oldham

We have an amendment to deal with the relationships between the Secretary of State for Trade and Industry and Scottish Ministers. We will discuss a range of issues that will arise today. I hope that I will be able to address the question within that context. Suffice it to say that within that debate I hope to give satisfactory answers to a range of issues. There may be one or two issues about which I may not be able to be entirely specific. At this stage, I am not in a position to give the noble Baroness a direct answer. I apologise for that, but I hope that when we get to the main debate on the issue I shall have an answer to give to the noble Baroness.

Baroness Carnegy of Lour

With respect to the Minister, I am not trying to be clever about this. There are people who are concerned about this issue. It has been put to me that we need to find an answer to the problem. That is why I asked the question.

Lord Davies of Oldham

That is entirely proper. I always assume the highest motives behind the noble Baroness's interjections for obvious reasons. I like to reply as accurately as I can.

The Secretary of State for Trade and Industry gives all directions in Scotland but, as set out in the legislation, Scottish Ministers certainly have important roles in relationship to the process. The noble Baroness asked a precise question to which I do not have a direct, unequivocal answer at this moment. I beg for a little leeway on the issue. I shall certainly not forget the point made by the noble Baroness.

Lord Ezra

May I ask the Minister, first, how the payments will be assessed? Secondly, why is payment not made to the NDA rather than the Secretary of State? After all, it is the NDA that will incur the costs.

Lord Davies of Oldham

The NDA will certainly incur the cost, but the noble Lord will recognise that it is working under the overall direction of the Secretary of State. When payments of such significance are to be made related to clean-ups, as an important principle of the Bill, it is right that we should identify the Secretary of State as the person to whom the payments are made.

The assessment of the costs will be what is reasonable in terms of necessary expenditure incurred for the process. I should have thought that the principle was obvious enough. The NDA is not seeking to wrest from the former operator any profit or advantage; it merely seeks to embrace the principle that, where pollution has occurred and has to be cleared up, the proper costs incurred should be met. The liabilities cost what they do to discharge them. The Bill provides that the Secretary of State funds the NDA through grant payments. The NDA returns any income that it gets. Obviously enough, although it is not extra income, the income derived from replenishment for costs that have been justifiably incurred on clean-up are payable to the Secretary of State.

Lord Dixon-Smith

I am glad that I tabled the amendment, because it has provoked some discussion. I am sorry to have to tell the Minister that he has not satisfied me. I have no difficulty at all with the principle that the polluter should pay. However, I have difficulty with the way in which the Bill suddenly jumps from the responsibilities of the NDA and supplemental provisions designating directions to the NDA to this one simple sentence. I understand that it is not a problem for an individual, but a proper restatement of the principle that the polluter should pay.

I find it an oddity to include, as a sort of supplemental supplement, designations to the NDA. If we are to have the provision, it should be quite clear and plain that it is in the Bill in its own right. Putting it in in such a way is almost trying to hide it, so it makes me even more suspicious. Perhaps the Minister could give me a direct example of how it would work, but it might be unfair to bowl at him at this stage of the afternoon. He might want notice of how to answer that, so it would be prudent at this stage to express my concern and, having done so, to withdraw the amendment.

Further explanation is necessary. I hope that we receive it, otherwise we will certainly need to return to the point simply for the sake of clarity of the meaning of the Bill. At the moment, it seems very obscure. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 15 and 16 not moved.]

Clause 5 agreed to.

Clause 6 [Designations relating to Scotland]:

Lord Gray of Contin moved Amendment No. 17

Page 6, line 22, at end insert "and obtain their approval before issuing the direction"

The noble Lord said: This probing amendment is designed to elicit where the border lies between the overarching powers of the Secretary of State and the devolved powers of Scottish Ministers.

The fact that the Bill lays a duty on the Secretary of State to consult the Scottish Ministers implies that, were he or she not so instructed, he or she might not do that. It further implies that, in not consulting, he or she would be well within his or her rights. Consultation itself achieves nothing. It is the resulting action, if there is any, that progresses the situation. The Bill makes consultation mandatory but remains silent on how progress is to be accomplished. Agreement between the parties concerned is unlikely to cause a problem. On the other hand, dissension is a possibility and should be legislated for.

It is possible to envisage many situations that could result in disagreement. One such might involve waste disposal where it might be necessary for the Secretary of State to consult on the use of, for example, a remote Scottish island. Of course, there is no guarantee that the Secretary of State for Scotland and the Secretary of State for Trade and Industry might have the same ideas about that island; they might want it to be on yet another island.

Under the conditions in the Bill, the Secretary of State could consult, overrule any objections, and carry on with the Whitehall plan. However, were he required to reach agreement, he might have to incorporate more stringent safety rules, transport arrangements, storage parameters and so forth. We need only glance at the kind of directions that might be given by the Secretary of State to understand how important that is and the sensitivity of the subject as regards Scotland.

For example, Clause 3(3) states: Before giving a direction under section 3", the Secretary of State might have to give, the NDA responsibilities for the operation in or on a licensable site in Scotland of a facility for the non-processing treatment of hazardous material". Or the Secretary of State might have to give the NDA, responsibilities for the operation in or on a licensable site in Scotland for a facility for the storage of hazardous material".

In the past, those of us who have been at the other end have known some extremely cantankerous Secretaries of State for Scotland. I can think of one from the noble Lord's party who had as much difficulty in obtaining agreement with his Cabinet as he had in obtaining agreement with us. On some of those issues, it is highly likely that that individual might take a totally different view to that taken by the Secretary of State for Trade and Industry. I do not refer exactly to the Secretary of State for Scotland because he, poor chap, must feel like a displaced person in his own office. His powers have been so dramatically and drastically cut by devolution that now he is what might be called a part-time Secretary of State for Scotland whose main duties lie with transport.

As regards Scotland, many issues are raised. I have given just one or two examples, but one does not have to look far in other parts of the Bill to see that there are much wider implications than at first might seem likely. We will return to this and other issues that affect Scotland, but I hope that the Minister will give us some reassurance that the Government are looking seriously at the matter. If he is unable to do so, we shall have to come back to the issue on Report to try to persuade him a little more. I beg to move.

3.45 p.m.

The Duke of Montrose

My name is also attached to the amendments. I support my noble friend Lord Gray. I am perhaps not one to apologise for the slight hint of a skirl of bagpipes in the background of the Committee. There are issues that concern Scotland. I am not fully aware of whether there are nuclear sites in Scotland where some of the non-processing of nuclear waste treatment is carried out, but, if it was introduced, one can understand that the Scottish Executive might feel that it should be subject to planning permission. We should like to know how far the powers of the Secretary of State in Whitehall would go in being able to overrule that.

Using the excuse that these matters are Scottish issues, the other amendments grouped with Amendment No. 17—namely, Amendments Nos. 45, 51 and 52—concern a single principle. The NDA prepares annual plans and reports progress against them. Those plans and reports are then distributed to all who are directly affected. However, there are others whose interests may be affected both by the priorities as set out in the plan and the nature of the progress achieved. If nuclear matters are not to any degree devolved and if they are in all respects a UK matter, all those affected throughout the UK should be kept as fully in the picture as is consistent with state security. If they are in any way devolved, that fact should be made clearer and the Bill drafted accordingly.

The order of priority given to the activity of the NDA may excite considerable interest among Scottish Ministers. At the moment, the dividing lines are blurred. For example, the nuclear industry employs people who require to be trained in order to play their part to best effect. The plans and reports of the ND. A, even where they do not concern specific Scottish sites and facilities, may contain information relevant to future skills and requirements. That may be of value to Scottish Ministers in planning and providing the training necessary to cope with decommissioning when it directly affects them. The timetable laid down for producing the annual plans does not allow much time for skills training before the indicated action is due to commence.

Baroness Carnegy of Lour

Will the Minister explain why Clause 6(1) states that a direction, may be given only by the Secretary of State and the Scottish Ministers, acting jointly", while Clause 6(3) states that the circumstances to which the noble Lord, Lord Gray referred, apply, namely that the Secretary of State must consult Scottish Ministers? What is the difference? As my noble friend pointed out, "consulting Scottish Ministers" is not the same as "acting jointly". If the Scottish Ministers said "no" to the Secretary of State for Trade and Industry about the island to which my noble friend referred, what would happen? We need to know that. Will the Minister explain the difference between the circumstances in which the Ministers have to act jointly and those where there is a consultation?

On Clause 14 and annual reports, an important point should he made. It probably would riot make much difference to the procedures. There are so many aspects in which there will be overlap between what happens south of the Border and north of the Border. Decisions taken south of the Border may affect those taken north of the Border later on. It would be so much better if the annual report had to be laid also before Scottish Ministers and the Scots Parliament.

Lord Davies of Oldham

First, I shall address the common theme that has run through the contributions made by all noble Lords. The Bill touches on intricate issues surrounding the relationship between the United Kingdom Government and devolved matters. We must therefore proceed with considerable care. A vast amount of work has been done. That is reflected in the way in which the Bill depicts relationships between UK and Scottish Ministers. I bow to the experience of the noble Lord, Lord Gray, when considering difficulties that may arise through personal quirks of Ministers, but I assume that we are discussing the formal powers in the Bill. There will always be interaction between colleagues of which we must all take account, but which can scarcely be written into the Bill. If they were, we would find ourselves in difficult circumstances.

The issue of consultation was raised. Consultation is obviously different from having direct powers. Where the legislation requires consultation, the person who is required to consult—in most of the cases covered by the clause, that will be the Secretary of State—must set out the issues, hear representations, consider them and then decide. He must demonstrate that that process has been fully followed through. Consultation is a formal requirement that has weight in the process that the Secretary of State must follow.

However, there cannot be a requirement that the parties reach agreement. By definition, consultation is an attempt to work towards an understanding and agreement on action to be taken. We could not require agreement to be reached as a result of consultation; otherwise, we would be involving joint powers, not consultation. The issues involved in consultation are different from powers. The amendment, and the anxieties of Members of the Committee who spoke, relate to the extent of the definition of the powers in the Bill; the relationship with the Scottish Executive; whether its powers are clearly defined; and whether the balance is struck accurately.

The provisions on the level of involvement of Scottish Ministers reflect the extensive discussions that took place between the Secretary of State and Scottish Ministers in the preparation of the Bill. The complicated nature of the provisions, at which the noble Baroness, Lady Carnegy, hinted, is unavoidable because of the various matters for which the NDA will have responsibility, and which are to be handled under the clear terms of the devolution settlement. The operation of the NDA, its United Kingdom responsibility and the specific requirements regarding the Scottish position are difficult areas.

The devolution settlement regarding nuclear matters is complex. Sites licensable under the Nuclear Installations Act 1965 and Crown sites are reserved matters for the Secretary of State. On the other hand, environmental protection and the regulation of the disposal of radioactive waste are, in principle, devolved matters. Members of the Committee, therefore, immediately will see a basis for difficulty and the need to get the legislation right.

The NDA's functions inevitably cover reserved and devolved matters. In some cases, it is difficult to draw the line between the two; hence the extensive discussions that we have been obliged to have with our Scottish colleagues—with great enthusiasm, of course. It is always a pleasure to engage in discussion on such matters with our Scottish colleagues, as, I am sure, Members of the Committee will attest.

It has taken some time to determine the powers that Scottish Ministers should have in relation to the NDA's responsibility. There is no hiding the fact that the general principles behind the Act lead to some difficult issues, on which there has not always been easy agreement.

The Duke of Montrose

Is the pleasure that the Minister mentioned enhanced by the fact that he and the Scottish Ministers are of the same political party at present? Those difficulties may be thrown into sharper relief when voting requires different political approaches at different ends of the United Kingdom.

Lord Davies of Oldham

I am talking about the principles behind the Bill, so if ever there were changes in political representation—a rather far-sighted concept, as the noble Duke would agree—if ever that distant day came, we, as the UK Parliament, would have agreed on the principles of the Bill, which will govern those relationships.

I suppose that there is a more friendly tone, but the noble Duke will recognise and would be the first to advocate that, irrespective of their political stance, the Scots are well able to advance the cause of their interests. I assure him that the difficulties we have had with the Bill have been because Scottish Ministers of my party are as keen to establish the contours of their powers and those of their successors as Scottish Ministers under the Bill as they should be, in seeking to discharge their responsibilities to their electorate.

Those discussions have produced an agreed position, and we believe that the Bill's provisions properly reflect that agreement. We understand that Scottish Executive officials are now poring over the measures in order to satisfy themselves that we have captured the ministerial agreement that underpins the Bill's drafting.

As the noble Lord, Lord Gray, freely acknowledged, the amendments would certainly extend the powers of Scottish Ministers into areas that clearly fall into reserved powers. It is because the amendment would clearly cross the line maintained by the Bill that I ask the noble Lord to withdraw it, in the hope that his intention was to probe whether we had sufficiently addressed ourselves to the contours of the relationships between the UK and Scottish Parliaments. I can assure him that extensive work has been done on that, because we all recognise that the NDA faces difficult issues of discrimination between reserved matters and others. On that basis, I hope that the noble Lord will withdraw the amendment.

4 p.m.

The Duke of Montrose

I ask the Minister to address the subject raised by Amendments Nos. 45, 51 and 52: notification of reports to the Scottish Executive when they do not necessarily contain matters directly under Scottish geographical jurisdiction.

Lord Davies of Oldham

We are of course eager that the process of reporting shall be as open as possible. The noble Duke made a useful point when he said that experience derived from UK operations would be valuable to Scottish operations and to the Scottish Executive, because they could learn from that experience. It would be ridiculous if there were a barrier that obstructed the exchange of that information; I certainly seek to allay fears on that score.

To the extent that the NDA will handle, store or dispose of radioactive waste at sites in Scotland, the Bill provides that the annual report should indeed be sent to the Scottish Minister, as the Committee would expect. In practice, therefore, Scottish Ministers will receive a copy of the report for decades to come—for as far into the future as we can foresee. If and when the NDA no longer has any decommissioning or clean-up responsibilities in Scotland, there would then be no reason for Scottish Ministers to be involved in its activities.

The NDA's annual report will be presented to Parliament, published and available to anyone in the UK, but if the question behind the amendments was whether the NDA would report to and present a report to the Scottish Executive, the answer is "Yes", in so far as it has direct responsibilities in Scotland.

Lord Gray of Contin

I shall withdraw the amendment, but one point still bothers me. We can return to it later. I am still concerned about what happens if agreement is reached between the Secretary of State for Trade and Industry and the part-time Secretary of State for Scotland, but not necessarily with the First Minister. At the end of the day, whose will prevails?

Lord Davies of Oldham

The noble Lord has suddenly dropped me into even deeper waters than those in which I was already splashing about in an ungainly manner a few moments ago. I sought within the framework to describe the relationship between the UK Minister for Trade and Industry and the Scottish responsibilities. The Secretary of State for Scotland negotiates with the Secretary of State for Trade and Industry on a range of matters. But in this area we are talking about Scottish Ministers, who would pursue the matter on the basis that we have agreement for the nature of the legislation involved.

Baroness Carnegy of Lour

The Minister did not reply to my question on how the divisions are made between where agreement must be reached between the two, where they act jointly and where they consult. He must do much more thinking on the matter, as there is confusion.

The Minister said that he hoped that the day was far ahead when different parties would be in power in the Scots Parliament and at Westminster. That may be so; I can understand his sentiment, but I think that I am right in saying—the Minister will know this—that civil servants working for the Scottish executive and those at Westminster try very hard, when the Government legislate, to ensure that the arrangements are robust enough for the very circumstance when there are different parties. We cannot just hope that such a change will never happen; it will probably happen one day, and all our legislation must be robust enough to stand up to it. The point made by my noble friend Lord Gray is very important in that respect. I hope that, if my noble friend withdraws his amendment. the Minister will think a lot more about the issue.

Lord Davies of Oldham

I apologise to the noble Baroness for my egregious political quip that it would be many decades before the political parties changed. I agree with her entirely; we must look at how the legislation works irrespective of the political relationships between the parties.

Lord Gray of Contin

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 [Supplemental functions]:

[Amendments Nos. 18 to 20 not moved.]

Clause 7 agreed to.

Clause 8 [Special functions in relation to pensions etc.]:

Lord Brooke of Alverthorpe moved Amendment No. 21:

Page 8, line 4, leave out "means" and insert "includes"

The noble Lord said: I apologise for being unable to speak at Second Reading and, unfortunately, for missing the first Committee sitting last week. I have read the Committee's deliberations in Hansard. Had I been present, I would have supported those in favour of reducing CO₂ emissions, particularly through more nuclear build in future.

Amendments Nos. 21 to 24 are tabled in my name and those of the noble Lord, Lord Maclennan, and my noble friend Lord Lea. They relate to pension provisions for staff employed in nuclear decommissioning. The Bill refers to pension provision in several clauses and schedules. References in other parts of the Bill appear to give the NDA sufficient powers in respect of its own staff either to set up its own scheme or to keep them in the combined pension scheme. Clause 8 is important, because it provides the NDA with fairly wide powers to set up arid/or maintain an industry-wide scheme. We strongly welcome that.

In our view, an industry-wide scheme would allow for the provision of equivalent benefits to new starters and to contractors who do not have pension arrangements comparable with those already in place for people currently employed in the industry. This would also ensure future pensions continuity in the event that one of the current incumbent organisations on licensed sites failed to renew its contracts. The scheme should be open to all in the clean-up work force in order to provide an incentive to staff to remain in the industry for the long term.

The purpose of the amendments, therefore, is to ensure that aims can be fulfilled on a fully inclusive basis, thus avoiding the creation of a two-tier work force as regards pension arrangements. I beg to move.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)

My noble friend has already indicated that, under the terms of Clause 8(2), the provisions in relation to the ability of the NDA to run pension schemes are quite wide, enabling the position of existing public sector employees to be safeguarded and to provide for other workers who might be brought in. However, his amendment would have the effect of an open door on expanding the definition of "relevant employees" for whom the NDA could either establish or run a pension scheme, one without clear limits and which would effectively change the precise definitions set out in subsection (2). Employees could be added who are employed by private sector contractors and sub-contractors throughout the nuclear sector. That would mean that the NDA could establish or run a pension scheme for employees unrelated to its own principal function, which is the clean-up and decommissioning of designated sites.

The amendments could have an indirect effect whereby the NDA's focus would be diluted away from that main function, turning the body into a portmanteau pension fund administrator for people working on and off within nuclear premises. That is not the Government's intention for the new authority. We are seeking to give a certain degree of flexibility for both existing and new employees to be brought into the scheme, but not to make it an open door. That would not be in the interests of the core members of the scheme or of the existing employees due to join it.

I turn to the amendments seeking consultation with employees' representatives. That is a desirable principle and one which we would expect the NDA to pursue regarding all aspects of its pensions provision. Reference is made to the NDA establishing appropriate stakeholder functions, which would include addressing the issue of relationships with its employees. However, because the proposal referring to consultation with representatives of employees relates to the amendments seeking to push wide the door to allow all kinds of different groups of employees to come in, it is not particularly obvious why the NDA should be required to consult the representatives of people whose activities do not form part of the core functions set out in this Bill. It is difficult to envisage why they should be members of the scheme. So while we would be under a clear obligation to consult the trade unions and representatives of the NDA's own employees and pensioners, the amendment would require that consultation to go much wider.

I shall have to resist the broad-based nature of my noble friend's amendments.

Lord Brooke of Alverthorpe

The Minister's response is not entirely surprising, although it is a little disappointing. We did not have it in mind to seek to extend the pension provision over such a wide area that the NDA would end up with a portmanteau pension burden. We envisaged points beyond which the pension provisions would not extend. Perhaps I should take the proposal away and seek a clearer definition of the points beyond which the provisions would not go. A proposal defining the extent to which consultation would take place might be more acceptable to the Minister. I shall reflect on the amendments and, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 22 to 24 not moved.]

Clause 8 agreed to.

4.15 p.m.

Clause 9 [General duties when carrying out functions]:

[Amendment No. 25 not moved.]

Lord Brooke of Alverthorpe moved Amendment No. 26

Page 8, line 23, at end insert "; and (e) the need to protect the social and economic life of local communities

The noble Lord said: Amendment No. 26 deals with a key group of stakeholders. Although radioactive waste is a national and international problem, any solution found by the Government or the NDA will have an impact on several communities of people and not just on the host community. Those communities must be considered as part of the deliberation process and not as part of the implementation. Transportation through communities; the impact of construction; environmental and economic impacts; and communities' familiarity with nuclear establishments must be taken into account. It is essential that trust be developed between any new responsible organisation and all of those stakeholders.

We hope that the amendment will not be contentious. Clearly particular local communities are likely to be directly affected—for example, in Caithness and Cumbria. The amendment, therefore, would make the promotion of their economic and social well-being a matter of duty for the new NDA. I beg to move.

Lord Jenkin of Roding

My noble friend Lady Miller and I were privileged to be invited to meet the staff at Harwell. We spent most of Friday there. Harwell has a remarkable record of replacing a large number of individual nuclear facilities. Many of the oldest "piles", as they were then called but which became research reactors, have been successfully decommissioned. A slide-show was presented to us where every alternate picture contained the same image as the one that preceded it with the word "Gone" written across it.

That is the decommissioning aspect of Harwell's work. However, we were impressed particularly by the extent to which UKAEA has been able, in collaboration with developers—and, no doubt, with local authorities and others—to find good uses for the land that is thus freed up from its original research and development function.

We were impressed, first, by the fact that new buildings have been constructed on the site, as has happened at Winfrith, for which UKAEA is responsible as well as for Harwell. In some cases, housing can be built on the site. A science park is being developed at Harwell. That is perhaps rather easier there than it may be in other places as it is close to Oxford. I suspect that there will be considerable demand there.

We were impressed also by the way in which the authority that carried out all that work had remained closely in touch with the local community. In one case, the groundwater of an area of land had become seriously polluted. We saw that the plant was effectively drawing in the polluting liquid, passing it up through filters and returning it to the ground. I believe that a local authority school shares a boundary with that site and that the UKAEA has good relations with it. There is plenty of experience to show that that can be done. I do not know whether it needs to be written into the Bill.

Cumbria may be a special case—as, indeed, may Dounreay. It is some years since I have been up to Dounreay; it takes a long time to get there and a long time to come back. I do not intend to reopen our debates on Second Reading and last Thursday about new nuclear build, but most sites of decommissioned power stations would be highly suitable for new build, if it were to happen. That would have the support of local communities, provide continuity of employment and have many other beneficial effects. However, there may be individual sites where that is impossible or inappropriate, so there should be a duty on the NDA to take account of the consequences of decommissioning and its impact on local communities.

From my experience in the Department of the Environment, when I was dealing with inner-city problems, I know that if we approach them in the right way and seek what I call bottom-up solutions, successful regeneration can often be accomplished with the support of local authorities and other agencies. If we try to impose that on people top-down, it does not work. There is plenty of evidence for that.

If the NDA will be doing the actual decommissioning work on the ground, it will in the course of preparing a site for decommissioning have the opportunity to engage in consultation to recognise the needs of the local community. I should be surprised if it did not regard it as part of its duty to do that work. Given that the UKAEA has been successfully doing that work on several sites for 12 years or more, there need not be too much gloom and despondency, feeling that we are sterilising land for several generations and so on. It is not: like that at all.

I was both surprised and impressed by the story that the UKAEA told us. I report to the Committee that there can be an atmosphere of optimism in those circumstances that ought to enter our debate. I hate the idea that all we are doing is running things down. It must not be like that; all sorts of new opportunities can be created if people approach the matter in the right way. Other Members of the Committee might find it worthwhile to see the same presentation that we were given and to meet the impressive people doing that work on the Harwell site. Then they would recognise that there is life after death. There is sometimes too much feeling that there will be nothing after.

I end by describing one further experience. I had to handle the closing of the Chatham dockyard. I went down to Maidstone on a winter's day, when we had great difficulty getting through the snow, and encountered a community and a county council in the absolute depths of despair. Chatham dockyard was to close; what on earth could conceivably take its place? I can only suggest that people go down to see what is happening to Chatham now. There has been a huge resurgence of activity in the whole of that area, helped by sensible government policy. We need to create hope. I hope that the NDA must recognise that that is an important part of how it can create the psychology in which its work will become fruitful.

Baroness Miller of Chilthorne Domer

I shall speak to Amendment No. 32, which is grouped. My amendment would add to the powers of the NDA, where it is given, power to make grants or loans to persons undertaking activities benefiting the social or economic life of communities". The Bill does not mention the environmental aspects of those communities. My amendment proposes that the environmental aspect should be grant-aided by the NDA in the same way as the social and economic life of the community.

When the Minister replies, perhaps he will tell me that under the general duties in Clause 9(1)(b), the need to safeguard the environment", satisfactorily covers the need to have regard to the environment when giving grants to communities. But I am not sure whether that is so. Some sites might need a great deal of environmental regeneration above and beyond the removal or containment of radioactive material. Therefore, the NDA should be able to grant aid in the form of environmental grants.

I turn briefly to Amendment No. 26. I agree that regard to the social and economic life of those communities is extremely important. Providing that it is not necessary to go down the new nuclear build road to fulfil the spirit of the amendment, I support it, while remaining neutral on the other question.

I agree that current nuclear power sites may be suitable sites for new nuclear build, should that be the policy decision. But, as the noble Lord, Lord Jenkin, said, those sites may also be suitable for other activities. A wind farm is already proposed for the site next to the nuclear power station at Hinckley Point.

The Minister will recall that last week we had an interesting debate in your Lordships' House about tidal power from the Severn estuary. Hinckley Point might be a place where tidal power could be developed. For example, it could become a centre through which some tidal power infrastructure could be delivered. To that end, I support the noble Lord's amendment.

The Duke of Montrose

I am interested in the subject raised by the noble Baroness, Lady Miller of Chilthorne Domer. My understanding is that she is mainly addressing the concerns that must have been addressed in Clause 9(1)(b) about what might be produced from a nuclear site. But if the element of, persons undertaking activities", concerned with the environmental life of communities becomes part of the Bill, does the Minister see that extending to people wanting to plant a bank of trees to protect the environment not from the activities of the nuclear industry but more generally?

Lord Christopher

Perhaps I may add a word in substantial measure of support for what the noble Lord, Lord Jenkin, said. I shall not repeat it, but there is experience of what he said to be found in America. However, under the Bill, there is the additional aspect that contracts will be awarded. Experience has been that contracts have not always gone to local people, local firms or local work forces. If ever a history is written of what has taken place in the past 20 years under contracting out, we would find a remarkable amount of information to show that we have made savings, but that a comparable bill has been picked up by social services. There is no benefit in that whatever for communities. It is important that it is stated in the Bill that the local community must be considered with respect to contracts.

The other aspect is future job prospects, which certainly bears on what was said by my noble friend Lord Brooke and the noble Lord, Lord Jenkin. It is particularly the case in small areas. One could argue that in parts of Britain it is not a great problem because other opportunities are around in the community. That is not true in parts of Scotland or in Cumbria. I hope that the Minister can help, but the NDA or someone else needs to consider what will happen afterwards. Where are people who have had a decent education in Cumbria going to work if things have been run down over the decade?

I hope that we can include a provision in the Bill to bring comfort and encouragement and answer those questions.

4.30 p.m.

Baroness Carnegy of Lour

Some important speeches have been made on the amendments. I certainly support the spirit of Amendment No. 26, although the Minister may point out difficulties that would dissuade me. It seems important, not only for the immediate future, but for the long-term future. Communities that may be identified in future as places where new nuclear build might happen are far more likely to be sympathetic to having it in their midst if they know that people have been treated really well in the past.

As most nuclear power stations are in rather remote places, the community, such as it is, matters even more. As the noble Lord, Lord Christopher, said, the job prospects and quality of life that pertain in that place matter desperately. I am simply sorry that noble Lords who have represented areas with power stations in Scotland are not in Committee, as I am sure that they would reiterate the point. Amendment No. 26 is very important.

Lord Whitty

I start by reassuring Members of the Committee that the role that the UKAEA and BNFL have played in the communities in which they operate will continue as an aspect of the NDA's activities when it takes over responsibility. I am familiar with what has gone on at Winfrith—which was referred to by the noble Lord, Lord Jenkin—and to a lesser extent in the Sellafield area. I am afraid that I have not revisited Harwell since I stopped working there 35 years ago.

Lord Jenkin of Roding

I suggest that the noble Lord takes a map next time he goes, because he will not recognise the place.

Lord Whitty

I suspect that that is true. Clearly, where a big employer—in particular, a big public sector employer—changes the pattern of employment, and probably reduces it in this case in the short term, there are responsibilities. That is why we have ensured that the NDA will have sufficient funds to cover such activities.

Amendment No. 26 would put that duty on the same level as the duty to safeguard the environment, the duty to protect health and safety, the central duty to ensure that clean-up takes place, and the need to preserve nuclear security. That would unbalance the picture a little. I think it unlikely—I am speaking slightly out of turn—that the UKAEA under present statutes has an equivalent duty. However, it, BNFL as a limited company and the NDA will be able to use that power in future. Indeed, that is provided for to a significant extent in Clause 10(2)(c), which the noble Baroness, Lady Miller of Chilthorne Domer, wishes to amend.

Nothing in the Bill as it stands prevents the NDA from acting in such a way. It is clearly the intention that it would, and it would be a corporate responsibility on the NDA to take account of the effect of its decisions and the manner of its decommissioning, for example, on the surrounding work force and community. To elevate that to a duty of the same order as its main functions, which would be far greater than one would expect of any large employer, would be going substantially further.

Moreover, if we get into an area to which my noble friend Lord Christopher, in particular, referred—placing responsibility on the NDA for regeneration of those sites—we move away from the focus of NDA activity. To a large extent, where a large employer, including a nuclear employer, cuts back on employment opportunities in an area, under our general regional policy we would expect the regional development agencies in England to take responsibility for regeneration, not a functional organisation such as the NDA. It would not, therefore, be appropriate to duplicate by giving the NDA a statutory responsibility for socio-economic regeneration. The NDA will have a function, under Clause 7(1)(e), and powers, under Clause 10(2)(c), to encourage and support economic regeneration. We would expect it to work with local authorities and others in delivering that regeneration, as has been the case with existing nuclear authorities.

The Government announced in December that we are setting up a strategic task force charged with developing a sustainable vision and plan for the economic and social regeneration of west Cumbria. That will be a collaboration between central Government, local authorities, the private sector and the social sector, involving BNFL and other large companies in the area, but it will be led by the North West Development Agency. That is the appropriate way forward for socio-economic regeneration. The NDA has a function and power, but it would be a step too far to impose what is suggested as an equivalent duty.

By Amendment No. 32, the noble Baroness, Lady Miller of Chilthorne Domer, suggests that we extend Clause 10(2)(c) to include environmental projects. She suggested that there were inadequate powers, functions and duties regarding the environmental aspects of the site. The NDA's duties on site clean-up cover all necessary environmental remediation on those sites and any others on which it has an effect. Those duties are clear and therefore always apply. Slipping "environmental" into this clause would make the duty much wider, and would go beyond the direct and indirect consequences of the NDA's own activity and that of its predecessor organisations on the site.

Nevertheless, there is perhaps an argument for considering the amendment in the context of environmental schemes, such as the school referred to by the noble Lord, Lord Jenkin. Involvement in providing clean water away from the site would not necessarily fall under the clean-up and environmental duties related to the site. Nevertheless, the NDA may wish to make a grant or a contribution in kind to delivering such an outcome. The word "environmental" may need to be included, although obviously the example given would be covered by "social" and probably "economic" life. I am therefore unsure whether the exclusion is particularly evident.

Lord Jenkin of Roding

I am grateful to the noble Lord for giving way. The water example is particularly interesting. So long as water suppliers operated under the local authority and were part of the public sector, nobody knew anything about the underground pollution that had apparently existed for many years. As soon as a private sector water undertaker took over and recognised that it would be responsible for delivering clean water supplies, it carried out a number of test drills on the site and discovered the considerable pollution that had lain undisturbed for many years. It had been added to, as industrial processors had simply been dumping waste, which percolated through the chalk and entered the groundwater.

That is an interesting case, as exactly the same thing happened with the nuclear industry. Not until it faced the prospect of privatisation did the question of the liabilities for clean-up and so on come to the fore. That is why, originally, nuclear power stations were withdrawn from the electricity privatisation arrangements. It is when the private sector recognises that it is facing liabilities that the work is done; that is, the necessary numbers are discovered so that it is possible to embark on the clean-up. That is an interesting thought and I shall leave it with the Minister.

Lord Whitty

I shall treat it as an interesting thought. The NDA would be responsible for any historic or current pollution deriving from activity on the site for which it was responsible. That would apply in the public sector and would not necessarily require any change of ownership for the body to have to face up to the liability.

Amendment No. 32 asks whether, in addition to the environmental liabilities and consequences both on and deriving from the site, the NDA should be able to engage in environmental schemes more widely throughout the community, as well as whether they are covered by the term "social" in this context. I should like to take that point away for further consideration.

Lord Brooke of Alverthorpe

I am grateful to all noble Lords who participated in this short and interesting debate and I am pleased that it will be put on the record. In particular I share the view of the noble Lord, Lord Jenkin of Roding, that we have some very good examples of what has been done, although problems have arisen and continue to arise in certain areas. It is important that responsibility is accepted for those problems and efforts made to resolve them.

I am not certain whether I could fully allay the fears expressed by the noble Baroness, Lady Miller of Chilthorne Domer, if we had the offer of a rebuild on an existing site. But I do not think that such a proposal is current and so I shall make no further comment on it.

I take the major points made by the Minister about the difficulty of seeming to impose a full duty on the NDA in the way provided for in the amendment. In the light of that, I shall consider carefully what has been said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 27 and 28 not moved.]

Baroness Miller of Hendon moved Amendment No. 29:

Page 8, line 34, at end insert—

1. "(e) not to act in a way which will or may put a site licensee in breach of any of its nuclear site licence conditions, nor shall it give any direction to a management and GC 271 operations contractor to act in a way which would put its site licence at risk or lay it open to enforcement proceedings; and
2. (f) to maintain the commercial confidentiality of BNFL and UKAEA and any management and operations contractor in respect of information disclosed to the NDA in the course of its performance of its functions pursuant to the provisions of any part of this Act."

The noble Baroness said: In a few moments I shall address Amendment No. 29. My noble friend Lord Jenkin of Roding will cover the other amendments in the grouping. While we are still discussing the future course of this Bill, I want to raise with the Minister a very important issue. I shall do so now because this is my first opportunity to speak today. I hope that he will treat my remarks with the utmost seriousness, as I believe they could involve an issue of parliamentary privilege.

On a number of occasions when I and colleagues on this side of the Committee have been seeking information from operators within the industry, we have encountered what I can only describe as—if not exactly a climate of fear—certainly an atmosphere of anxiety. We have been told that if information is provided to us, then those organisations providing such information fear that they could face serious adverse consequences from a government department. I presume that they were referring to the Department of Trade and Industry.

That is astonishing and I should say to members of the Committee that I have no intention of mentioning any names. However, it is correct that I should tell the Committee that three companies have spoken to us within the past few days. That is a serious matter.

I have dealt with many Bills and with many Ministers—although I have never had the pleasure of dealing with this Minister—and I have never encountered such problems. It certainly would be a breach of privilege if any signal had been given to any organisation by any civil servant, special adviser or Minister that a public body should not be open with a Member of the House on an issue that is not commercially sensitive. That we would understand.

Can the Minister make a clear statement on the record that neither he nor any department has discouraged or will discourage any public sector firm or body from assisting or briefing Members of the House on the Bill? Can he confirm on the record that neither he nor any member of his department has asked for any reports on private briefings given by the industry to Members of the House? Can he also give a clear statement on the record that he encourages the fullest co-operation with opposition parties? After all, the issue of the future of the nuclear industry will span many decades. It is certainly not the private possession of whichever government is in power.

I have been extremely disturbed by suggestions that people have been leant on not to brief opposition spokesmen fully. If that were the case, it would most definitely be a breach of privilege. I hope that the Minister can provide an unequivocal assurance on that point.

4.45 p.m.

Baroness Byford

When I first heard about this, I was deeply disturbed. I would be grateful if the Minister could respond to my noble friend before she goes on to move the amendment. I am sure that he will be as disturbed as we were when we heard about it.

I have dealt with six if not seven Bills opposite the noble Lord, Lord Whitty, and we have always experienced very good relationships in the past with whomever has briefed us—often they have briefed the Government and ourselves. That is not a problem. I do not know why the issue has arisen on this Bill, but it needs sorting out before we consider the amendment.

Lord Jenkin of Roding

Before the Minister responds to the question, I very much endorse what has been said by my noble friend Lady Byford. We should quickly clear up the matter because, after all, the amendments relate to confidentiality.

I have certainly experienced it. There are one or two issues that we shall put forward in Grand Committee on the Bill—the amendments are already on the Order Paper—in respect of which I have felt it necessary to agree, with some reluctance, to a request that the source of the amendment should, in no circumstances, be disclosed. It was a public body. We were invited to visit Harwell by the senior manager of the decommissioning unit. At the "Energy Choices" conference, he asked whether it would help if he showed us some of the decommissioning work that the UKAEA had carried out. His head of communications wrote the next day to follow up that arrangement, and we went there last Friday.

In the midst of all the splendid information that we were given—I hope that I gave the Committee a flavour of it a few minutes ago—we detected more than a hint that perhaps people there were telling us things which their political masters would not be best pleased about. I find that horrifying. I believe that it stems from the culture of control that emanates right from the top. Like my noble friend Lady Miller, I have taken part as a Minister and as an opposition spokesman in a large number of Bills. I have never come across anything like that.

We have received briefs from some of the public sector companies. Is that frowned on? The Minister needs to give a firm reassurance to the Committee and to those outside who have expressed such apprehensions that this not a part of the Government's policy and that any attempt to lean on the directors and managers of such companies will be firmly resisted and will not be allowed to happen. Otherwise, I can see that we may get ourselves into considerable difficulties. Perhaps the Minister would like to respond to that point.

Lord Whitty

I find this somewhat difficult because, although a number of accusations have been made, they have necessarily been made in general terms. I understand why noble Lords feel the need to protect their sources. I am certainly not aware of any instruction from my department or the Department of Trade and Industry to prevent the normal courtesies and information being provided to all Members of the House from whatever party. It is possible that, as with many other Bills, where we have known there has been briefing coming from organisations public and private we have asked to see such briefings. So, as regards that part of the noble Baroness's remarks, that kind of situation could have occurred and might have been misunderstood by those who provide such briefings.

It is difficult to know whether there is any substance in the fears that people have obviously expressed to noble Lords. A part of the nuclear industry has been subject to such fears in the past, and there is concern in elements of the nuclear industry about the way in which the Government are dealing with the role of nuclear power in the future. This has led to some people being prepared to believe anything of Ministers. But, as I say, I would be astounded if any instructions were to go from any of my colleagues— or, indeed, from our senior civil servants—to prevent the normal courtesies being afforded to Members of the House.

I shall obviously make inquiries on the basis of what noble Lords have said today. If any noble Lord wishes to speak to me privately, I shall be happy to do so to see whether we can throw any further light on the situation. That is probably all that I can say at this point. If necessary, I shall come back to the Committee at a later stage to report on what, if anything, I have found out about what lies behind the accusations. I hope that we can leave the matter there for the moment.

I recognise the seriousness of the concerns expressed by noble Lords and agree that they need to be looked into. Even in an industry where a great deal is confidential and secret, people need to be reassured that there will be openness with parliamentarians. My colleagues and I certainly accept that principle.

Baroness Miller of Hendon

I thank the Minister for that answer. I apologise to him that the issue arose only two or three minutes before I came into the Committee, otherwise I would most definitely have given him notice of it.

The Minister said that, if necessary, he would come back and report to the Committee. I believe that that will be necessary on the points I have made, which he can read in Hansard tomorrow. We want it on the record that such things should not be happening; that they will not happen again; and that, to the best of the Minister's knowledge, they have not happened in the past. That is important.

I should like to speak now to Amendment No. 29. The amendment would add two essential paragraphs to Clause 9, which relates to the general duties of the NDA when carrying out its statutory functions. Although the amendments to the NDA's duties are essential, they are not in any way onerous. Indeed, they cover the way in which we would expect the NDA and any responsible public body to act without being told. That, however, is not a reason why the issue should not be spelled out in unambiguous terms in the Bill, which is after all the constitutional charter of the NDA.

There are two short additional paragraphs which are, as I am sure that Members of the Committee will see, entirely self-explanatory. In the first, the NDA, which is being given very wide powers over nuclear sites, is forbidden to give directions which make the site operator fall between two stools. That is an important issue to which we will want to return in more detail. On the one hand, we are talking about disobeying a legitimate requirement of the NDA, and on the other about breaching the terms of the licence.

In that context, I would like to draw the Committee's attention to a provision similar to the amendment, which is to be found in Clause 18(7). It reads: A direction under this section cannot authorise a contravention in relation to an installation, site or facility of any obligation to which the person with control of it is subject by or under an enactment". In other words, the NDA is forbidden to give a direction that contravenes a statute or a statutory order. My amendment deals with directions given by the NDA which do not contravene an actual statute, but which contravene a licence given by the Secretary of State. In the interests of consistency, the same regime should apply in both circumstances.

I propose my second new subsection to the clause because many companies—BNFL is one—are engaged in trading activities relating to the nuclear industry. They are all concerned about the commercially sensitive and confidential information that the NDA might legitimately demand of them. As my noble friend pointed out, the group of amendments is to do with confidentiality. Those trading companies are entitled to expect that commercially confidential information should be kept confidential. Having been forced to impart information that they would normally keep under the tightest of security, they do not want to find it published in some report or handout of the NDA, passed on to a competitor in response to some query, or even—I agree that it is far less likely—blurted out in a moment of indiscretion.

On more than one occasion, I have been refused a detailed answer to some legitimate question by Ministers, although not this Minister, on the grounds that the information that I sought was commercially confidential and sensitive. I do not complain about that, nor do I suggest that the Ministers concerned are in any way being evasive. However, it is required that the NDA understands right from the outset of its existence that the same high standard of confidentiality is required of it. It must understand that with its power to demand information to enable it to carry out its statutory duties comes the duty of respecting the property rights of those being interrogated and questioned. By that, I mean their rights to their own commercial secrets. I beg to move.

Lord Jenkin of Roding

We are discussing a large number of other amendments with Amendment No. 29, and they are all concerned with the issue of confidential information. We had what proved an interesting debate on the subject on Thursday in relation to certain matters that came up earlier in the Bill. As I said at the time, we found the Minister facing two ways. In one way, he sought, no doubt from perfectly honourable motives, to promote transparency in the matter. At the same time, however—

[The Sitting was suspended for a Division in the House from 5 p.m. to 5.12 p.m.]

The Deputy Chairman of Committees (Lord Geddes)

We have had 12 minutes since the adjournment. Perforce but rudely I interrupted the noble Lord, Lord Jenkin of Roding, so perhaps he would like to continue his speech.

Lord Jenkin of Roding

I am tempted to echo the Mayor of London in his first speech after being elected. He started by saying, "As I was so rudely interrupted", which I thought was a good start. I was not rudely interrupted; I was interrupted under the Standing Orders.

We return to the same issue that we debated last Thursday; namely, the apparent conflict between what is in the Bill, which provides protection only for matters of national security, and the Freedom of Information Act. It will come into force next year and, in addition to national security, it allows for commercial confidentiality.

I am sure that the noble Lord, Lord Davies of Oldham, will recognise that perhaps Thursday's debate was not his finest hour. He said a number of things from which I take some encouragement. He stated: I would be verging on the excessively optimistic, if I thought that this was the last that we would hear of the argument in the context of this Bill".—[Official Report, 15/01/04; col. GC 177.] Perhaps he did not recognise that the argument would arise again the following Tuesday. Later, he stated: The whole point of the Committee stage is for us to think seriously about such representations".—[Official Report, 15/01/04; col. GC 179.] I shall say no more on that aspect. I hope that the Government are thinking seriously about the matter. It is not only Members on this side of the Committee, but others who have studied the debate, who felt that the Government's position was untenable. It is perfectly clear that the NDA and contractors must have the same action as will be open to them when the Freedom of Information Act comes into force. I do not intend to take that point further.

This group of amendments refers to a number of functions of the NDA that arise later in the Bill. It will not have escaped the Minister's attention that many of the amendments are in virtually identical form. They have been tabled because they refer to different aspects of the NDA's activities, but exactly the same considerations of confidentiality apply.

I shall refer in a few moments to Amendment No 36, which deals with Schedule 2. What I shall say on that amendment will apply equally to the others. Amendments Nos. 36 to 38 refer to the NDA's strategy reports and documents; Amendments Nos. 48 to 50 refer to the NDA's annual plan; Amendment No. 54 refers to the annual report; and Amendments Nos. 59 to 61 refer to directions given by the NDA to contractors. The same considerations apply to all.

I draw the Committee's attention to Amendment No. 36. I shall not read it all because noble Lords will have it in front of them. New paragraph 5A(1) forbids the disclosure of information, otherwise than under an enactment"— if there were a statutory authority, that would override it— [that] would constitute a breach of confidence actionable by any person". Then it requires that the NDA, shall consider whether the disclosure of the information is strictly necessary in order to fulfil such requirements and shall not disclose the information unless it is strictly necessary". Secondly, it states: the NDA shall not disclose the information unless or until the person to whom it is to be disclosed has agreed to be bound by confidentiality obligations in substantially the same terms as those which are binding on the NDA". That is the requirement that there should be no disclosure unless it is strictly necessary and that the person to whom it is to be disclosed should be bound by the same obligations.

Amendment No. 37 refers to anything, the publication of which would…constitute a breach of confidence actionable by any person and anything". Amendment No. 38 states: The NDA may exclude from what it publishes under this paragraph anything which constitutes a trade secret or the publication of which would be prejudicial to the commercial interests of any person". The requirements set out in Amendments Nos. 36, 37 and 38 are substantially the same as those in the other amendments in the group. I need not weary the Committee by going through them seriatim. I do not think that the Committee would approve of that.

The issue is the same: there are matters of commercial confidentiality which it would be highly undesirable to breach and for the information to become public. The amendments set out the conditions that the NDA must fulfil.

There are several aspects to this. On Thursday, we considered whether contractors would be willing to bid for contracts if they thought that their commercial information and trade secrets would become public knowledge. There was also the question of whether individuals would be damaged if information that did not need to be published was published.

There are two aspects that I would like to add to that. I start with an apology to the Committee. It has recently come to our attention that there will be considerable problems between the NDA and the various regulators that will operate in this field—for instance, the Nuclear Installations Inspectorate, part of the Health and Safety Executive, and various other nuclear bodies with regulatory functions. It has been drawn to my attention that there should be some provision in the Bill to regularise that aspect and to make it clear that the addition of a new body in the form of the NDA will not merely add yet another layer of control, regulation and interference.

As we have said repeatedly, we support the creation of the NDA and the thrust of Part 1 of the Bill, but there are problems. We will probably have to return to them on Report as it was only comparatively recently that they were drawn to our attention.

There is one other matter on which I invite Ministers to comment. It is widely recognised that Ministers have been taking advice from experts in commercial firms and consultancies around the world. Much wisdom is to be gained in the field of decommissioning, not least from the United States of America, along with other countries. I assume that the NDA, with a comparatively small staff of only 200, will also want to rely substantially on consultancy advice from a variety of experts.

It has been pointed out that there would be a considerable conflict of interest if a firm were to provide advice to the DTI or to the NDA—and in doing so be privy to much of the information that flows into those bodies—and then to challenge existing operators for a new contract. It would be difficult for it to sit on both sides of the table.

Is there a case for Chinese walls within those firms? They are firms with international reputations. The answer one hears is: "Well, we could have a Chinese wall, but nobody would trust it". One cannot expect a large firm with substantial interests around the world somehow to maintain a clear dividing line between those privy to the information from the Government or the NDA and those who are not, with only the latter entitled to go into contract. Nobody would trust such a system and it is clearly not the answer.

I do not know the answer; I know only that there is a problem—one that the Government need to address. Perhaps safeguards cannot be written into the Bill. 1 have looked at how that might be done. It is difficult to see how one could do it without imposing unreasonable restrictions on the Government or the NDA in seeking outside advice. An arrangement has to be made for those who are privy to important, secret, commercial information about an operator which is known both by the NDA and the Government. It is right that such information should be made available to the advisers. Otherwise, how can they offer advice? However, there is a danger that those same advisers and the firms that employ them can then use the information to gain an unfair competitive advantage.

I am sure that the Minister's department has been made aware of this anxiety and knows all about it. The amendments raise the whole question of commercial confidentiality. I have referred to two areas in which it may be necessary; namely, the interaction of the various regulatory bodies and the position of competing contractors, some of whom have an inside track. I hope the Minister will recognise that those are serious matters which should be addressed before the Bill reaches the statute book.

Lord Davies of Oldham

I shall start on a note of agreement. They certainly are serious matters. When I foretold last week that we would not progress far with the Bill before the issue of confidentiality re-emerged, I had not anticipated it being quite so soon. The noble Lord chided me then that it had not been my finest hour. We are granted only one hour that is our finest. Therefore, I am sure that he will not mind if I again descend into the mundane today. I assure the Committee that I may well speak for an hour because I want to respond to a substantial number of points. The issues under discussion are essential to the satisfactory work and operation of the NDA once the Bill becomes law.

Let me start by addressing the issue of regulatory compliance, which the noble Baroness, Lady Miller of Hendon, raised. I want to reassure her that the regulatory requirements under a licence are statutory obligations that flow from the Nuclear Installations Act 1965. I do not think, therefore, that her anxiety in this respect is well founded. The statutory obligations already in place mean that the requirements will be the same as anything prescribed in statute. I hope that the noble Baroness will be assured that we are watertight on the clarity of the obligations being laid on those concerned with regulation.

The Bill does not change the regulatory regime applying to nuclear sites designated to the NDA. Site licensees or persons with control—to use the parlance of the Bill—remain bound by regulations that derive from existing legislation. That includes all the regulatory obligations set out in the Nuclear Installations Act 1965, the Radioactive Substances Act 1993 and the Pollution, Prevention and Control Regulations 2000, as amended, or made under Section 2 of the Pollution Prevention and Control Act 1999. All these are recognised statutes, and the obligations flow from them.

I can give the noble Baroness a further clear assurance: the NDA cannot require a person with control to contravene such obligations. A direction from the NDA that purported to authorise a contravention of a licence condition or other regulatory obligations would be unlawful. Persons with control of a site could not be obliged to comply with an unlawful direction. The essence of the arrangements set out in this Bill is that the regulatory framework, with all its obligations and enforcement mechanisms, remains quite unchanged. However, it is not good practice to include provisions for that in legislation, since we have all the relevant statutory duties in place.

We recognise the importance of this issue, and I appreciate the terms in which the noble Baroness sought to express her concerns. Effective working relationships between the regulators, the NDA and the site licensees and contractors—the "golden triangle" of decommissioning and clean-up activities—lie at the heart of the new arrangements provided in the Bill. We have devoted considerable efforts to ensuring that regulators are comfortable with what we propose. A draft memorandum of understanding between the regulators and the NDA has already been agreed. Regulators will need to finalise the details with the NDA once it has been established. Regulators will be key contributors to the development of the NDA's strategy and annual plans, and the site remediation plans to be produced by site licensees.

Regulators will work with the NDA to assist persons with control to produce work plans for the sites that are consistent both with the strategy of the NDA and the regulatory imperatives. Nothing will compromise the independence of the regulators to rule on appropriate safety, security or environmental standards.

We believe, therefore, in relation to concern that persons with control or contracts might be caught in the middle of the NDA and the regulator, as I think that the noble Baroness suggested, that it is quite clear that such anxieties are ill founded. The duties of a site licensee in respect of regulatory compliance in Clause 17(2) place a negative duty on persons with control to ensure that, in discharging their responsibilities to the NDA, there is no contravention of other statutory obligations, including regulatory ones.

That is as far as we can properly go to spell out what continues to apply as a matter of good regulatory practice. With that reassurance, I hope that the noble Baroness will feel that she does not need to press Amendment No. 29.

I shall turn to the other substantial issue, that of commercial confidentiality, which relates to the proposed new paragraph (f) in Amendment No. 29 and to some other amendments, including those to which the noble Lord, Lord Jenkin, spoke at some length. We considered the protection of commercially sensitive information in outline at our previous sitting. I am pleased that I have the opportunity to advance the Government's case a little further. Although I made the position as clear as I could last week, I recognise that I did not obtain universal satisfaction throughout the Committee, and I accept the fact that the amendments reflect that anxiety. I shall therefore take them as probing amendments that give me the opportunity to give all the reassurances that Opposition Peers want on the matters today.

First, I shall set out the Government's broad approach to the question, which we discussed to an extent last week. The Government are of course committed to the NDA being a champion of openness and transparency. The White Paper, Managing the Nuclear Legacy, stated that the ability of the NDA to command public confidence was to be a measure of its success as much as its operational performance and cost-effectiveness. Public accountability through open and transparent operation will be absolutely fundamental to the NDA's success. We will set specific objectives for the NDA in that respect in, for example, the context of providing information to the public, and to local stakeholders in particular. We have been developing a stakeholder engagement framework with that in mind, which we expect the NDA to take on and to develop once it is established.

That effort has been a central part of carrying all stakeholders—employees, local communities, unions and environmental groups—with us. Excessive secrecy is seen as one of the failings of the nuclear industry in the past. It is something that we must change if the NDA is to command public confidence.

Secondly, the NDA is the body responsible for securing safe, secure and cost-effective clean-up. It must have access to and be able to take decisions on the disclosure of information that it considers necessary to carry out its statutory functions effectively. In that regard, BNFL and the UKAEA as existing site licensees become vehicles for the NDA to achieve its objectives. They will operate their sites for the sole purpose of meeting the NDA's objectives.

Under Clause 17(2), the person with control of a designated installation, site or facility can use it and any interests or rights in it—under subsection (8), that includes a process, information or document—only in order to discharge the NDA's responsibilities. It is very important to keep the nature of the relationship between the NDA and its site licensees, and the fact that the only party with an interest in the information is the NDA, firmly in mind.

Thirdly, the NDA's relationship with its contractors will, of course, be governed by contract. Notwithstanding the powers of direction in the Bill, which provide the necessary framework for the NDA to exercise its powers in the absence of a contract, our intention is that the NDA will secure clean-up through contractual arrangements for the management of the site licensee companies. Many of the powers of direction fall away with the existence of a contract. It is for the NDA and the contractors to make provision for confidentiality in their contract. It is not the intention, nor is it desirable, that the Government should legislate on the content of contracts. Should there be such provisions, the NDA, as any party to such a contract, will be bound by them. With those factors in mind it becomes easier to see the limits of the legitimate commercial interests of the different players and the appropriate treatment of commercially sensitive information in a particular case. The NDA will have access to information on the contractors on the basis of the contract drawn up.

I shall respond to the areas covered by the amendments in turn. I apologise for the length of my speech, but it goes to the heart of some of the most substantial issues in the Bill, which have already caused considerable concern earlier today and during last week's sitting.

Proposed paragraph (f) in Amendment No. 29 provides for a general duty on the NDA to maintain the commercial confidentiality of BNFL, the UKAEA and contractors. As will have been clear from the general principles that I have just adumbrated, the NDA's approach to protecting commercially sensitive information in respect of its management and operations contractors will be governed by contract.

In respect of BNFL and the UKAEA as site licensees, the NDA has a principal interest in the operation of the designated sites and any related information. It is appropriate, therefore, that the NDA should be free to decide what information in that area it should disclose. As the beneficiary of commercial activity at its designated sites, the NDA will have a direct interest in ensuring appropriate protection of sensitive commercial information. But it must be free to decide what needs to be made available to potential contractors so that it can facilitate effective competition for contracts to manage site-licensee companies. That point was at the heart of discussions last week, and I hope that I have clarified it today.

The site-licensee companies will not be market players in the sense that their role is not subject to competition. The Government's view is that the current work force and, in some shape or form, the companies for which they work will remain in place for the duration of the clean-up programme to ensure continuity and provide regulatory assurance. Consequently, and given what I have already said about open and transparent operation providing a basis for public confidence in the NDA, the Government do not consider general provisions on protecting commercial information either necessary or helpful.

5.30 p.m.

Lord Maclennan of Rogart

Before the Minister departs from that point, will he clarify what he means by saying that site licensees are not subject to competition? As I understand it, under the arrangements they are appointed for a time-limited period that appears to be quite short. The agencies that are so contracted must regard themselves as subject to subsequent competition for subsequent contracts. That could press down heavily on operators.

Lord Davies of Oldham

For the time being, the site licensees will fit within the rubric that I identified—in a separate category from other contractors. That is how they would fit into the pattern regarding the confidentiality of the information that they would possess. They will be in a special relationship with the NDA; therefore, the NDA is bound to be the arbiter of any information that is put into the public domain.

The noble Lord, Lord Jenkin of Roding, discussed Amendments Nos. 36 to 38 on the NDA's strategy, and Amendments Nos. 48 to 50 on the NDA's annual plan. He also dealt with Amendment No. 54 on the NDA's annual report, which would require it to secure the agreement of third parties before disclosing information that would constitute an actionable breach of confidence, and to abjure from disclosing trade secrets and information whose disclosure would be prejudicial to the commercial interests of a third party. The only parties in those circumstances will be NDA contractors and site licensees. As I sought to describe, they are in a relationship with the NDA covered by the principle regarding the nature of the information that will necessarily be made available.

For the former, I reiterate that the protection of commercially confidential information will he governed by contract. The contractor, like any other person, will have recourse to the usual legal sanctions to enforce such a contract. The NDA will be bound by the contract with site licensees, because their sole purpose will be to operate their sites to facilitate the discharge of the NDA's functions. To reiterate the point to the noble Lord, there is no distinction between the site licensees' interests and those of the NDA. It is therefore surely right that the NDA should decide what it needs to disclose in its relationships with them in pursuit of its overall objective of public accountability.

On Amendments Nos. 59 and 60, which focus on NDA directions to the person with control to disclose information to the NDA, I have already explained the nature of the NDA's relationships with its site licensees. Their interests are identical. To the extent that a site licensee is exposed to claims for breach of confidence, the NDA, which stands behind the site licensees, will be exposed to the financial consequences of a breach of confidence that it has sanctioned.

In the normal operation of the NDA, it will be natural—indeed, essential—for the NDA and site licensees to work closely together. They can be expected to have a common interest in appropriate protection of commercially sensitive information. It bears repetition that the NDA has responsibility for ensuring effective clean-up and encouraging effective competition for site management contracts. It therefore must have power to make decisions about what information concerning the operation of facilities at sites needs to be made available to potential contractors.

I apologise for the length of my response, but all sides of the Committee regard the amendments as important. I bear in mind that this may not be our last discussion of these issues, but I am doing my best to guide the Committee, so that we focus on the points of real disagreement between us.

Amendment No. 61 refers to protecting commercially sensitive information in respect of designation directions for related sites. That was mentioned during our previous sitting. Directions for designated sites will set out what is being designated. They will be a factual description of for what the NDA is being given responsibility. It is important that the NDA and the person with control of the site are clear about the precise extent of the NDA's responsibilities, which must be made public. The only justifiable exclusion for identifying what is to be dealt with would be on grounds of national security. Anxiety has not been expressed in the Committee about the definitions that relate to information that is necessarily protected for reasons of national security. I therefore cannot understand what commercial interests could be involved, and ask that Amendment No. 61 is not pressed.

We take serious note of the Committee's concern about the question of commercial confidentiality. I hope that what I have said goes further than I managed last time in clarifying the issues and demonstrates why the Government have taken the stance that we have. There is no intention for the NDA to play fast and loose with commercially confidential information to which it has access. It has as much, if not more, at stake in the game than any of the other players—especially site licensees. We are trying to allow the NDA to operate against the principles that we have adumbrated: as much openness and accountability as can be obtained while conducting itself with its contractors and site licensees in a way that guarantees that anxieties about commercial information are misplaced.

On that basis, and apologising once again for the length of my response, I hope that the noble Lord will withdraw his amendment.

5.45 p.m.

Baroness Byford

Before my noble friends respond, can the Minister first elaborate a little on his reply to Amendment No. 36? He made it clear that what is required in this Bill is the same as the statutory requirements set out in other Bills. I think that he quoted legislation from 1965, 1993, 1999 and the PP&C regulations issued in 2000. Can the Minister guide me on where to find such a reference, because I cannot find it?

Secondly, if nothing is written down and it is simply to be accepted by assumption, would it not be sensible to accept Amendment No. 36? I say that because the Minister has not explained why he objects to it other than to say that he thinks that this appears somewhere else. He has not taken apart the wording proposed by my noble friends. Can the Minister direct me to the provisions in the present Bill which ensure that we do not need to worry about Amendment No. 36? If there are no such provisions, does he not agree that this would be an ideal opportunity to reinforce the point?

As I have said many times when debating legislation with the Minister's colleague, the noble Lord, Lord Whiny, to expect people in the outside world to refer back to legislation produced in 1965, 1993, 1999 and 2000 is perhaps rather silly. Would it not he more sensible to include an appropriate form of words? Even if he is not willing to accept the proposal of my noble friend—whose words are rather good—I hope that the Minister will accept that it would be more sensible to specify this point.

It should not be possible for the NDA to pass confidential information to any person and a form of words should make that clear. I would be grateful for further comments.

Lord Davies of Oldham

I shall address the second point put to me by the noble Baroness. We can certainly look at the question of clarification because we are always mindful of the concerns expressed about cross-referencing in legislation. However, the premise behind the Bill is that we do not have to include all the provisions set out in past Acts governing the regulatory operation of the NDA because they derive directly from such legislation. I recognise that the noble Baroness may consider that I cited a rather obsessive list—it was quite a mouthful—but she will see that we are not referring to Acts of Parliament which go back for aeons. The oldest Act referred to was passed in 1965 and I referred to only three Acts in total.

If the noble Baroness is not referring to an issue of principle here but rather addressing the effort of the amendment to make things clearer, then perhaps we shall be able to look at it. However, we seek to minimise cross-referencing in legislation and we have to balance the argument that including every reference to previous measures in new Bills means that the statutes grow too thick. If we were to include every cross reference in new legislation we would be padding out these documents even further.

The legislation relates to the sources of the regulatory obligations and puts them on a statutory basis. They go far wider than the responsibilities put on the NDA. I hope that the noble Baroness will recognise that we are seeking to define the regulatory obligations which relate to the NDA whereas the Acts of Parliament to which cross-references are made involve much wider provisions than those relating to that body. Therefore it would not be appropriate to include them in the framework of this Bill. I shall certainly consider whether it will be possible to meet the noble Baroness's point of clarification in other parts of the Bill.

The noble Baroness will recognise the issue of principle that I am seeking to establish in this area. We are not creating anything afresh for the NDA with this legislation in terms of the nature of its obligations. That is why I was able to give an assurance to the noble Baroness, Lady Miller, in respect of Amendment No. 29.

Lord Jenkin of Roding

Before my noble friend responds to the speech of the Minister on Amendment No. 29, perhaps I may offer one or two observations on what he said about the remaining amendments.

I was intrigued by his reference to the Nuclear Installations Act 1965. It was the first piece of legislation in which I played any part as a Member of Parliament—then as now as an opposition Member. It was made perfectly clear that the Bill was on the stocks at the time of the election and the incoming government wisely decided to introduce it. That was quite a long time ago.

I listened carefully to the noble Lord but I get the impression that we are aiming at a moving target. On Thursday we were given a long description—I shall not repeat it—of the way in which the Freedom of Information Act would apply to publications by the NDA, and were told that people will have a commercial confidentiality defence available under the FIA.

The Minister has shifted his tack today. Over the weekend he has probably recognised that that was a rather difficult argument. If the FIA was going to give protection, why not say so in the Bill? He has now moved to the rather different view that this will all come under a contractual relationship between the NDA and the contractors, and that it will be for the parties to that agreement to decide how far commercial confidentiality should go in terms of the publication of the documents referred to—the strategy document, the plan, the annual report and so on.

I shall study the Minister's words very carefully because it seems to me that he may be on stronger ground today than he was last Thursday. I find the idea that this matter could be properly dealt with within a contractual relationship rather more attractive than the suggestion that it could all be dealt with under the Freedom of Information Act. I shall consider the matter very carefully between now and Report.

I do not need any lessons on the value of transparency in this matter. I was, after all, a member of the Select Committee of the House which looked at the whole question of nuclear management and nuclear waste. One of our recommendations was very clear. In the summary of conclusions, at paragraph 8.8, we stated that openness and transparency in decision-making were necessary in order to gain public trust. We then went on to say that by themselves they are not enough, which of course I accept.

As I said at Second Reading, I totally welcome the commitment to transparency, but there clearly is a conflict as to how that will work in relation to what the Minister has recognised could be commercially sensitive information. He has suggested now that this could be dealt with by contract. I shall wish to consult on this with those advising us and to look carefully at what the Minister said. I was conscious of the fact that he was sticking closely to his brief on this issue, which obviously means that someone has given the matter a great deal of thought. I recognise the process. Clearly we cannot vote on the amendment now but I shall look very carefully at the issue.

I had hoped that the Minister might say, "There are serious points here. Obviously the Opposition will wish to look at what I have said". It would have been jolly nice if he had clearly said that there were serious points at which we would want to look again before Report. If he had said that, we would have gone home happier, but he was very careful not to say it. Perhaps that was a mistake.

Baroness Miller of Hendon

The length of time that we have taken in explaining the amendments, and the large amount of time that the Minister took to reply, point to the very importance of what we were talking about. The Minister said that he was very glad that this was a question on which we had tabled probing amendments, so that he could probe when giving his answer. All amendments are probing amendments in Committee; we can do nothing other than probe and highlight issues, to ask Ministers what they think. When we get a long answer such as that given today— it is a long time since I moved the amendment—we need to look at it very carefully to ensure that we have understood exactly what has been said, as we think the matter important.

I agree with my noble friend Lord Jenkin of Roding that we are not going home exactly exuberant, but that we have certainly been led to look at that answer very carefully. At this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Chilthorne Domer moved Amendment No. 30:

Page 9, line 22, after "State" insert ", who shall report to the appropriate Parliamentary body,"

The noble Baroness said: The Minister, in summing up, said that he did not think that there were any concerns about the information that needed to be protected in the interests of national security. Perhaps the amendment is not so much about a concern as about probing—I accept that probing is all that we can do. The point is minor, but I wanted something on record about what would happen in the event that the Secretary of State directed or notified the NDA that the information needed to be protected in the interests of national security. Therefore, it could not be in the public domain or discussed or seen by the public.

My amendment simply enables the Minister to tell us how the Secretary of State will be accountable. To what parliamentary body does he report, if any? I am thinking of the way in which the Intelligence and Security Committee keeps an eye on sensitive information coming out of the MoD. Where will any parliamentary input be made into such information? That is an important point. Although I can see the reason why some information will need to be protected in the interests of national security, I would not like to think that the decision about such information rests alone with the Secretary of State, without anyone else having input or oversight at all. I beg to move.

6 p.m.

Lord Davies of Oldham

The noble Baroness is better at asking questions than providing solutions to the problem. She will recognise that Parliament makes very particular arrangements for sensitive information relating to national security. Within the framework of the issues affecting the nuclear industry, I cannot see that we can be anything other than entirely secure and scrupulous.

Clause 9(7) sets out to protect national security by requiring the NDA to protect information which the Secretary of State considers to be sensitive and requiring protection in the interests of national security. Surely that is entirely appropriate and in keeping with government practice on how to handle sensitive information. Amendment No. 30, to which the noble Baroness has just spoken, proposes that under Clause 9(7) the Secretary of State should report to Parliament whenever the NDA is notified about sensitive, protected information.

Of course the Secretary of State will take advice before deciding to notify the NDA of information that should be protected in the interests of national security. We are addressing here the most fundamental interests of our society. While we want the NDA to operate with the utmost openness and transparency, we must have appropriate safeguards to protect sensitive nuclear information, which we all recognise could be used against us should it fall into the wrong hands.

Where national security considerations are involved, especially in the current climate, appropriate limits must be set on the disclosure of information. Clause 9(7) sets those limits to ensure that the NDA protects sensitive nuclear information, in the interests of national security". The Secretary of State has a fundamental obligation to fulfil that function in relation to the NDA. I do not see that the information could come within the framework of accountability, save through the arrangements established by Parliament for the supervision of national security.

Baroness Miller of Chilthorne Domer

Is the Minister saying that there would be an appropriate parliamentary committee for the Secretary of State to report to? The tone of his reply suggests that I am arguing against this information being protected. I do not argue the fact that some nuclear information needs to be protected. I believe that the Secretary of State for Defence reports to Parliament. Of course, I have no knowledge of exactly what he reports, not being a member of the committee, but I understand that sensitive information is overseen by a group of senior parliamentarians. I simply ask whether the same arrangements will apply here.

Lord Davies of Oldham

Of course there are arrangements for dealing with extremely sensitive material in terms of parliamentary accountability, but they are very specific. If the noble Baroness has in mind a concept of the Select Committee on Trade and Industry carrying out that task, I am not sure that it would command wide assent either in this House or the other place.

Baroness Miller of Chilthorne Domer

The Minister continues to misunderstand me. I am not suggesting that. I am suggesting a committee that meets in private along the lines of the one that keeps an eye on, for example, MI5 and MI6. That information is never put in the public domain, yet a parliamentary committee keeps an eye on it. That is what I am getting at.

Lord Davies of Oldham

Such a proposal is not within the purview of this legislation. When the Secretary of State decides that the NDA has obtained information which, should it become more widely available, could pose a threat to national security, then it could be considered in the parliamentary sense, but only through questions addressed by the very special body that is concerned with national security. At this point, however, we should not be proposing an additional framework to consider such important and sensitive information.

Baroness Miller of Chilthorne Domer

I shall read carefully what the Minister has said in response and take advice from those parliamentarians with greater experience than I in this field. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

The Deputy Chairman of Committees (Lord Geddes)

After Clause 9, I call Amendment No. 31 in the name of the noble Baroness, Lady Miller of Chilthorne Domer. I beg the pardon of members of the Committee. Clearly I need a better optician. I should have referred to the noble Baroness, Lady Miller of Hendon.

Baroness Miller of Hendon moved Amendment No. 31:

After Clause 9, insert the following new clause—

"COMMERCIAL OBLIGATIONS OF NDA

1. (1) It shall be the duty of the NDA in carrying out its functions to have regard to each of the matters referred to in this section.
2. (2) The NDA shall use its best endeavours to maximise, or permit or encourage the maximisation of, the income of operating plants when within the NDA's responsibilities.
3. (3) The NDA shall provide advance justification to the Secretary of State for the closure of any operating plant (including the economic case for such closure).
4. (4) The NDA shall maintain decommissioned sites in a condition suitable for reuse, particularly for use for future nuclear purposes.
5. (5) The NDA shall provide reasonable encouragement and support for education, skills development and the maintenance of a national research and development capability in the field of generation and decommissioning of nuclear power plants."

The noble Baroness said: The purpose of this amendment, as is obvious from the text, is to impose certain commercial obligations on the NDA. What has to be avoided in a hugely complex, very expensive and long-term operation is for the NDA to press on with its activities and policies without having regard to the financial implications for the nuclear generating industry and, no less important, for the taxpayer.

I suggest that the operative provisions of the new clause are almost self-explanatory and are mere matters of commercial common sense, as well as not being over-prescriptive or imposing unduly onerous obligations on the NDA.

Let me look at them one by one. Subsection (2) calls for the NDA to maximise the income of operating plants under its jurisdiction. I shall not enumerate the ways in which a plant might obtain extra income; suffice it to say that those which can currently do so. What has to be avoided is the NDA deciding, for one reason or another, that it no longer wants to be bothered.

Subsection (3) requires the NDA to be accountable to the Secretary of State in advance if for some reason it decides to close an operating plant, as indeed it surely will because that is what it is there for. The point is that, although there may be a good reason to close a particular plant within the terms of its remit, there may be factors outside its brief for not doing so or for not doing so at a particular time. Those factors include, for example, the lack of replacement sources of power, a matter which will cause the Government some problems in the not too distant future.

Subsection (4) calls on the NDA, as part of its duty in dealing with plants which it has successfully and completely decommissioned, to keep them in a condition for potential re-use, possibly for future nuclear purposes. What we do not want is derelict sites abandoned more or less for ever. That is not because the NDA will not leave them 100 per cent safe, of course; we are sure that it will do so.

My noble friend Lord Jenkin has already told members of the Committee that he and I visited Harwell last Friday. We saw a local site that has been cleaned up and now has a school right on its edge. UKAEA is justifiably proud of its achievement at Culcheth in Lancashire, the site of its former engineering metallurgy group. That site has been transformed into a much sought-after housing development. Noble Lords should bear in mind that it is now part of ordinary conveyancing procedure for solicitors to request an environmental report showing the use of sites and others in the vicinity. However, it is still the perception which counts, even when that perception is wholly misconceived.

Within the property company of which I am a director we thought long and hard before deciding to invest in a property that had been built on the site of a former petrol station. In those days, people looked askance at such developments and were not happy about them. Further, one only has to recall how long it was before something was found to do with contaminated land on the Isle of Dogs.

A particular and blindingly obvious possible use for old nuclear power station sites is to use them for building new nuclear power stations if, at some stage, that is what the Government want to do. At a stroke you avoid major planning problems, especially Nimbyism, and you can take advantage of the investment made in public relations by the previous operators. With the same stroke, you have a location which has clearly established itself for that particular purpose. Further, there may well be the residue of a skilled and trained workforce who were previously employed at the plant. Those workers may well have had problems finding new jobs. The local economy, which may have suffered as a result of the closure of the old plant, will be rejuvenated.

Having a ready made market for the site, which would remove the need to keep it secure and prevent it from becoming a derelict eyesore, is an example of how the NDA could maximise its income, as specified in proposed subsection (2).

Proposed subsection (5) would require the NDA to provide encouragement and support for skills development in the field of generation and decommissioning of nuclear power plants.

The achievements and proven track record of UKAEA, to which I have referred, are a case in point. British skills in all kinds of scientific and engineering endeavours have long been an invisible export. For example, British engineers built long stretches of South American railways as long ago as the 19th century. Furthermore, it is had enough that current government policies, or the lack of them, will make us entirely dependent on foreign suppliers for our fuel. Surely we do not wish also to be dependent on foreign countries for know-how on building, operating and closing down our nuclear power stations, if that is what the Government decide to do in the future.

As I said, I do not believe that my amendment would impose an excessive burden on the NDA; nor, as a responsible public body, should it be unwilling to undertake that burden. I beg to move.

Lord Maclennan of Rogart

I welcome the opportunity provided by Amendment No. 31 to raise some important issues. It is important to gain clarity from the Government about their intentions for the sites currently managed by UKAEA in particular

The UKAEA has a mandate to restore the Dounreay site to a greenfield condition. Admittedly, that will be some decades down the track, but concern has already been expressed—not surprisingly—that an operation that has sustained high levels of local employment since the mid-1950s and promises to continue to do so during the period of decommissioning should not be left to swing in the wind at the end of the process.

One is asking the Government, not to make detailed predictions about what kind of work might be appropriate in or near those sites, but to indicate the desirability of development either of the site, which will be owned and managed by the NDA after the Bill is enacted, or those proximate to it, which will work in close conjunction with the sites.

The amendment would impose a duty on the NDA to bear those issues in mind. That is a wholly sensible proposal. Proposed subsection (4) is particularly sensible. The position in a number of the authority's sites differs; for example, it is not the same at Harwell as it is at Dounreay. I hope that the narrowness of the definition of the NDA's responsibilities will never be used to impede an initiative by the NDA or one of its contractors to develop cognate work on or close to the site that could benefit the local economy.

A related issue is raised in proposed subsection (2) of Amendment No. 31. That would encourage the maximisation of the income of operating plants. It is clear that work is being done involving leading-edge technology, in which there is advantage in seeking to exploit Britain's position for commercial purposes, and perhaps even to offset some of the high costs involved in decommissioning by attracting new contractual work. I hope that that would fall squarely within the terms of the new agency, and that the Government would welcome such developments.

The proposal that the NDA should provide reasonable encouragement and support for education on decommissioning seems highly sensible, if its task is to be discharged without the hazard of having to rely on uncertain sources of such experience, drawn from outside our country. That seems prudent and might allow, for example, the development of suitable industrial educational schemes and apprenticeships squarely within the remit of the NDA, in its interests and those of the country.

I hope that the Minister will reply that none of those objectives is precluded and that all are possible within the Bill as drafted. It is certainly important that, if that is not the case, the Bill be strengthened in the ways proposed by the amendment.

6.15 p.m.

Lord Whitty

To some extent, we have come to the heart of the matter on the role of the NDA in the Bill. In some circumstances it may be highly beneficial to the NDA's core role for it to be able to carry out many of the activities touched on by Members of the Committee, including many of those referred to by the noble Lord, Lord Maclennan. We want to give it such flexibility. However, it would be utterly wrong for us to give the NDA wide-ranging responsibilities for effectively ensuring the continuation of the nuclear option, and for engaging in matters that are not central to its core role of clean-up and decommissioning.

At certain points, the Committee has broadly accepted that the Government's position is correct—that the NDA is not the appropriate body to lead consideration for the future of nuclear power. Some Members of the Committee may believe that some other body should do that, but they do not really believe that the NDA's main role should be as the repository of nuclear strategy or the nuclear contribution to energy policy. Its central role is to become an effective expert in the decommissioning and clean-up of nuclear installations, sites and facilities, and to use that expertise in the most economic, efficient and safe way.

The amendment gives the NDA a range of new responsibilities of at least equal proportions. Proposed new subsection (5), for example, would impose on the NDA an obligation to support skills and research capability of nuclear power generation. I recognise that that is an important issue, and one to which a number of noble Lords referred both at Second Reading and in Committee. We will return to it this evening, I hope, and if not, certainly not far into our proceedings. The issue of nuclear R&D is important; however, it is not the NDA's responsibility to carry the burden of maintaining and enhancing nuclear research and skills over and above those necessary for its own purposes.

The Bill allows—this touches on the noble Baroness's point—the NDA to ensure that others could use the research facilities at its designated sites for whatever purpose, including the purpose of nuclear research. For example, Clause 10(2)(e) will enable researchers into the future of nuclear power to have access to the necessary facilities, and enable the NDA, in the course of decommissioning or clean-up, to ensure that that operates.

But, again, it is not an obligation on the NDA so to do. Proposed new subsection (4) in the amendment seeks to place another duty on the NDA to maintain decommissioned sites with future nuclear purposes in mind. Clearly the NDA and government policy need to consider the possibility of there being future nuclear build at some point, but it should not be central to the role of the NDA to prejudge the end-point of every site it manages. Its job is to clean-up and decommission.

Clause 12(4) requires the NDA's strategy to set out its objectives in respect of the decommissioning and clean-up of different installations and sites, and the NDA itself will need to manage that in order that it meets what it considers to be its own appropriate endpoint in the context of that decommissioning. That is then subject to ministerial endorsement through the Secretary of State's role in the approval process for the strategy. The Secretary of State can specifically require the NDA to modify its strategy in respect of the objectives it has set out for a particular site. But it is not part of the operation that the NDA shall be required to look at a specific future use of those sites.

The Government's policy on decommissioning is of course subject to a current process of consultation, which is due to end shortly. The Government's position on the policy for determining appropriate end-points will be clear in their response to that consultation and well before we establish the NDA and it is in full operation. It will provide a framework for the NDA's own consideration of end-points, but it will not provide a basis for the NDA itself to take those decisions.

Proposed new subsections (2) and (3) in the amendment would place a duty on the NDA to give commercial considerations relating to the operational facilities a great deal of significance—too much significance in my view. The amendment implies that it should give as much significance to the commercial considerations in terms of maximising its income as it should to its decommissioning and clean-up responsibilities. That significance would be a misplaced focus. Clearly the NDA, in the course of running a site, will need to have an eye to commercial opportunities and making money out of a site and income derived from a site, but it is not appropriate that that should have the same level of significance as its role in relation to decommissioning.

The implication of proposed new subsection (3), in particular, is that a decision by the NDA to close an operational facility should be subject to a different and higher test than decisions relating to other activities on the sites—for example, whether or not a site could be kept open for future nuclear use.

The Bill already charges the NDA with ensuring that facilities at its sites are operated in a manner that it considers most beneficial to the public—that is in Clause 9(3)—and on this basis we would obviously expect the NDA to secure the operation of all facilities in such a way that maximises the net benefit of securing clean-up. As the NDA receives that financial benefit in any case—which, through the operation of the Nuclear Decommissioning Funding Account, will contribute to future clean-up activity—revenue generation clearly has to be one of its considerations. But it cannot be the determining factor in how it goes about decommissioning the sites.

Continued operation of the facilities beyond what is beneficial to the NDA itself and beneficial to the cleanup and decommissioning programme could distort the issue and it should not be the NDA's responsibility to allow that degree of distortion. Clearly there are issues of minimising the cost to the taxpayer of the clean-up operation, and the Government will need to take on board the potential alternative use of a site, but that should not remove the focus from the NDA's core role.

We recognise that the NDA, in developing its expertise, will contribute to the Government's consideration of the future role of nuclear power generation. In that respect, it obviously has the beneficial side effect of developing this expertise in one place. As noble Lords have said, this will lead the NDA to take advice from world-wide experience on the issue. That will need to be taken into account and respected in terms of future decisions on the deployment or otherwise of nuclear power.

A central problem is that a number of noble Lords are trying to use the Bill and the NDA to provide a basis for the future development of nuclear power. We debated this at least once on the first day in Committee. There are two questions. There is the question of whether or not future energy policy will require nuclear power and, should the answer at some future point be yes, there is the question of how far the NDA should be the body responsible for delivering it.

Both those in favour of a bigger role for nuclear power and those against using the NDA as a vehicle for delivering nuclear power capacity and making some of the decisions on whether to facilitate the development of nuclear power are missing the point. Whatever the future role of nuclear power, we need to clear up the legacy of its past. That is the NDA's prime role. If the Government change their mind on new nuclear build, other institutions will come into play. The Government will deal with the strategy and ensure that it is taken into account so that the appropriate infrastructure is put in place, but that is not the same as the role of the NDA dealt with in this part of the Bill.

The narrower point of alternative uses for a site will also be relevant to the NDA's activities but will not predispose a site for future nuclear use. The strategy, the annual work plan and so on will ensure that the NDA keeps under continued assessment the use of a site. We do not want the NDA to be seen as a body operating in a way that maximises the possibility of future nuclear build and which will itself become responsible for the provision of a base for that nuclear build. It is not a nuclear continuation authority; it is a decommissioning and clean-up authority. If we distort that distinction we will misinterpret this part of the Bill by using it to deal with somewhat wider issues on which there is clearly a difference of opinion. We will not resolve that difference by imposing extraneous and burdensome duties on the NDA in carrying out its central duty.

Lord Maclennan of Rogart

I feel somewhat challenged by the Minister's assertion that, in supporting the amendments, one might be seen as explicitly supporting the view that sites would be used for a particular nuclear build project. It is well known that I am sceptical, at least, about the Government's view that it can meet the nation's energy needs by relying on the resources outlined in the energy White Paper. But that is no part of my argument in favour of these amendments, or at least what I understand lies behind them.

The nuclear decommissioning business is highly expensive and it is public money that is going into it. It is business which could be of immense value to the Government, the country and the taxpayer. Therefore it is perfectly reasonable to look for ways in which the return to the taxpayer can be maximised, a point which has not been sufficiently underlined in the language of the Bill.

It is right for the Minister to focus on the prime obligation of the duty on the NDA—decommissioning—but it is possible to do that at the risk of overlooking the considerable ancillary benefits which could flow to the country from managing well this enormous, billion-pound business. I illustrate my concern that the Minister is downplaying this aspect by citing his treatment of new subsection (5). He referred to the encouragement of education, research and development capabilities in this field as an absolute responsibility to be placed on the NDA. However, that is not what is set out in the amendment; it talks about providing "reasonable encouragement", which is rather different from what the Minister sought to bat away.

If the Minister can say that such activities already lie within the powers of the authority, I cannot imagine why anyone would want to press the point. However, if he is saying that it is no business of the NDA to provide any resources or encouragement for skills development in the process, I must ask whose responsibility it is. Are we as a nation to be held to ransom as the result of a shortage of skills?

6.30 p.m.

Lord Whitty

I certainly did not seek to imply that the NDA would have no responsibility for research and development. Clearly it will need to develop those resources to aid its own areas of activity. Further, I did not object to the first part of new subsection (5). "Reasonable encouragement" are rather unusual words to use in legislation, but one can hardly object to them.

However, the last part of the new subsection refers to, the maintenance of a national research and development capability in the field of generation and decommissioning of nuclear power plants". That would place a requirement on the NDA to be responsible for creating a centre of excellence for everything concerned with both the decommissioning and generation roles of nuclear science. The implication here is that all that should be the responsibility of the NDA. Other bodies will continue to be involved in those activities—most currently in the public sector. But if we opt for new nuclear build, we shall see substantial private sector responsibility for those areas as well. The final words of new subsection (5) suggest that NDA should bear the burden of the total research effort. That is why I oppose it.

Lord Maclennan of Rogart

I am grateful to the Minister for his intervention in so far it helps to clarify what is in the mind of the Government. I accept that a distinction must be made between the first and second parts of new subsection (5)—the first covering the "reasonable encouragement" of skills, development and so forth and the maintenance of a national research capability. However, it is also arguable that the maintenance of a national research capability is a reasonable objective for this country if it is not to risk being held to ransom. If skills development activities are not undertaken, that must be regarded as a risk.

It may be that such skills shortages will not show up in the short term, but it is obvious that other companies, whose interests lie almost wholly overseas, where profits would be remitted, are circling around this lucrative business with a view to entry into the field—if possible, in a monopolistic fashion. Those are not unreasonable concerns, although I am happy to accept that the drafting could be improved. Perhaps it would be desirable to return to the matter at a later stage.

Although we must accept that the purpose of the agency is to deal with the issue of decommissioning, we should not be so short-termist in our espousal of that prime objective that we do not look down the road at the dangers that may arise for our national effort in this sphere if we do not maximise the opportunities for internationalising and selling our expertise elsewhere and providing for that kind of development.

That is the great advantage, in a sense, of being as far ahead of the game as we are. We are not unique, but we are quite far ahead of the game. I hope that something on the lines of the amendments, which I did not draft but with which I am in sympathy, will be thought suitable by the Government— just as recognition of those ancillary responsibilities. They are not intended to cut down the prime duty or burden the authority; they are simply intended to allow the authority to embrace those subsidiary objectives as necessary and appropriate in doing its job properly in the longer term.

Baroness Carnegy of Lour

We all understand what the Government are trying to do and why they are limiting the application of the Bill, but we must not allow the opportunity to go by without taking advantage of the current situation, which will develop during the next few years, to build a bridge to the future. There is an opportunity to keep things going in the right direction—to maintain people, thinking, research and everything else mentioned in the amendment. If the Government refuse to allow the NDA to do any of those things, they will miss a massive opportunity and we shall have to backtrack in future to do them.

I am not being very clear, but we must be careful that the political strategy and practical matters on the ground do not conflict.

Baroness Byford

I have only two quick points to make, because other Members of' the Committee have said what I wanted to, especially on skills. I recognise that the NDA's first priority is decommissioning and clearing up: on that the whole Committee is agreed.

I shall have to read Hansard carefully, but I think that the Minister said that proposals are out to consultation at present. If he could tell me exactly what they are consulting on, that would be immensely helpful. Can he tell me when that consultation will finish? He said that it would be shortly and before the NDA came into force. Will it be before the Motion that the Bill do now pass from our House, let alone anywhere else? I record this on every Bill, but it is unacceptable to have matters that will affect the Bill with which we are dealing now out to consultation, so that we do not know the outcome.

The Minister has realised that subsection (5) of my noble friend's new clause may need to be split off later, because national research and development may well need to go elsewhere. I should be grateful if he would answer my queries and pick up on our concern around the Committee—although no one has spoken from the Labour Benches—that we may well lose skills that are important to retain, if there is nowhere for them to be practised. Once decommissioning has happened, if there is no immediate nuclear build—we are not saying that there should be—skills may well be lost, as was well set out by the noble Lord, Lord Maclennan. I should certainly be grateful for an answer about the consultation.

Lord Whitty

The noble Baroness is correct: she always complains about that. Policy issues are always subject to some degree of consultation; this consultation relates to decommissioning. It will be concluded by the end of March—no, February. I should therefore expect the results of the consultation to be available before the Bill completes its course. However, the response to that consultation will form part of future directions to the NDA.

To repeat, the Committee is missing the point about research and, to some extent, skills. The NDA can under the Bill maintain skills, engage in research and pay other people to perform research into decommissioning, clean-up and related matters. But that is not the totality of the Government's commitment to research in the nuclear industry. Under the auspices of BNFL, we have the NSTS. At the end of 2002, we completed a review of the nuclear and technological skills needed. We have extended the sector skills council that covers chemicals and gas to include nuclear technology, so a new push will be delivered to skills. Some research will continue to be carried out in what is currently UKAEA, and there is still a substantial budget for nuclear research in universities.

So it is not as if there is a huge gap in provision that must be loaded on to the NDA. The NDA's responsibility for research will lie in its particular area, but those other streams of research will continue and, we intend, maintain the UK's position as one of the leading countries in nuclear technology and expertise.

Earl Attlee

The Minister said that there was a substantial UK university research budget. Can he tell us what is the size of that budget?

Lord Whitty

I am not sure that I can, but I will let the noble Earl know.

Lord Gray of Contin

To pick up on some points raised earlier about the relationship between Ministers here and in Scotland, I should be surprised if the Scottish Parliament's attitude—I obviously have no knowledge of its inner thinking—towards the new development agency was not similar to that outlined in the amendment, especially on the matter raised by the noble Lord, Lord Maclennan. I should imagine that Scottish Ministers will look to the new organisation to support just the sort of things advocated in Committee today.

Baroness Miller of Hendon

First, I thank all Members of the Committee who supported the amendment. Each one made a valuable contribution, mostly making different points. My noble friend Lord Gray repeated that the amendment was reasonable.

I have some sympathy with the Minister, because he has to keep saying, "That is not the role of the NDA". At the end of our first sitting, I replied that it might well be that I had placed the responsibilities in the wrong place, but this is an Energy Bill. Most Members of the Committee fear that we will face an enormous loss of energy, one way or another, so we keep trying to find ways to make certain points. As I have told the Minister, I always try to help the Government if at all possible. The Government say clearly: "We are keeping the nuclear option open". Actually, we know not what that means, other than that they continue to say it. If that is a fact, when decommissioning takes place it would make sense to leave sites in a suitable condition to help the Government should they decide to keep open the nuclear option. Perhaps they never will, but the sites being decommissioned would be available if the Government ever wanted to activate that option.

In that context, I found interesting one of the sentences in the Minister's response to the amendment. What did he mean when he said, "Of course, if the Government change their mind on new nuclear build"? Did he mean, for example, changing their mind on keeping the option open? I found that sentence very convoluted and confusing. I shall read carefully what the Minister said and decide in due course what we might do in the future. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.45 p.m.

Clause 10 [Powers for carrying out functions]:

[Amendments Nos. 32 and 33 not moved.]

Clause 10 agreed to.

Clause II [Strategy for carrying out functions]:

Lord Maclennan of Rogart moved Amendment No. 34

Page 10, line 25, after second "time" insert "review and, if necessary,"

The noble Lord said: This amendment, to which the noble Lords, Lord Brooke of Alverthorpe and Lord Lea of Crondall, have attached their names, is an attempt to probe the Government's thinking on strategic planning and how the oversight of the decommissioning programme is to be handled in practice.

The schema set out in the Bill seems to vary from that in the Government's White Paper Managing the Nuclear Legacy—A Strategy for Action. According to that paper, the Liabilities Management Agency (LMA) was to have operational freedom. But I find it difficult to understand how that was held to be manageable given the degree of oversight that the White Paper described in subsequent paragraphs. It stated that strategic control would he exercised through an annual meeting at which Ministers would review the LMA's strategies and annual work programmes, take stock of its performance and set new performance measurements for the year ahead. I do not know what is left for operational management if managers must be subject to such detailed hands-on control.

The new language of the Bill does not specify that degree of intervention. Clause 11(1)(b) states that it will he the duty of the NBA, from time to time to revise that strategy".

One must ask why that should be mandatory if the strategy in place is seen to be working. Clearly, that is not what the Government have in mind. Schedule 2 sets out the detailed review process to precede or accompany the drawing-up of strategies.

This is an invitation to the Minister to indicate the extent to which he envisages the Government being involved in this process. According to the Bill, the strategy must be drawn up at least once every five years, although, if circumstances change in certain ways, it is open to the agency to go about it again. It would be helpful at this early stage if we could have a clearer view of what the Government envisage.

On the whole, it seems desirable for non-departmental bodies not to be constantly pulling themselves up by the roots and looking at their objectives with a view to changing direction—that is extraordinarily unsettling. Five years may be a perfectly reasonable period, but there seems to be an assumption, at least in Clause 11, that the strategy will not last and will have to be changed. What do the Government think? I beg to move.

Baroness Miller of Hendon

The amendment is very simple; it does not ask the Government much. Clause 11 is quite interesting. It states: It shall be the duty of the NDA". If it is a duty, one must do it. Subsection (1)(b) states that, from time to time, the NDA must revise its strategy. Let us assume that the NDA, having drawn up a strategy, would like to contemplate whether it is necessary to revise it before doing so. I can see no harm in adding the simple phrase that it is the duty to "review and, if necessary" revise. It seems peculiar to place on the NDA a duty to revise, come what may.

Lord Jenkin of Roding

I wish to point out in all friendliness to the noble Lord, Lord Maclennan of Rogart, that Clause 11 is one of the clauses that later in the Bill the Government reserve the power to change by order. I therefore have a horrid feeling that it does not matter what we put in those clauses, because, subject to affirmative procedure, the Government can change them later. The words proposed by my noble friend Lady Miller of Hendon are inoffensive and simply clarify.

Lord Whitty

Clearly, it is envisaged that the NDA strategy will cover the whole clean-up process. That will include what is happening on each site, the NDA's forward planning, research efforts, training and all the aspects that we have discussed on previous amendments. From time to time there must be an opportunity for the strategy to be reviewed, not only by Ministers, but by the NDA's stakeholders. We wish, therefore, to provide for a minimum five-year period for Ministers and stakeholders to be engaged in that process.

The amendment may involve a degree of semantics. Members with a classical education will know that "revise" simply means to look at again. We will look again with Ministers and stakeholders at whether changes are needed. In five years, given the rapidly moving energy climate and changing economic and environmental scenarios, it is extremely unlikely that the whole of any strategy will be absolutely right. It is therefore likely that some changes would be made. That does not imply a wholesale revision; it gives Ministers and others the opportunity to engage with the NDA in validating the strategy after five years. As is always the case, in a reasonably long-term strategy there will be more detail on the first five years than on latter years; for example, seven to 10 years ahead. As one moves through the process, one will probably want more detail. It is a racing bet that some changes would be required in the strategy, albeit that the broad brush is still considered correct. It does not seem unreasonable to build in a review and revision every five years.

In this area of energy policy, technological change, particular problems at particular sites that might lead on to more general conclusions would need to be reviewed. We should not limit this. We should have a review and a revision every five years, which is what the clause as printed would require.

Lord Maclennan of Rogart

I am grateful to the Minister for that explanation. There is a semantic point here and I am sure that he is right, but it is none the less strong for that. It is noticeable that this provides for a five-year review. although paragraph 4.22 of the White Paper spoke of strategic control being exercised through an annual meeting at which Ministers would review the strategies and annual work programmes of the LMA.

Does the Bill constitute a change of thinking? Is it really being suggested that the authority should be kept at a greater arm's length in its strategic oversight of the mission than was suggested in the White Paper? The White Paper clearly suggests that Ministers would be constantly involved in review and oversight, and in setting performance measures for the year ahead.

There is an issue here which is more than semantic. It is about the extent to which the Government want either to leave the authority to do its own thing—subject to the requirement that within five years they will review and revise—or whether they really want to review more frequently. Is that how they expect to operate? This is a probing amendment to divine whether the Government seek to take a hands-on or arm's-length approach.

Lord Whitty

The noble Lord probably exaggerated the degree to which the White Paper and the LMA sought total hands-on ministerial activity. We envisaged annual discussions on the way things are going rather than hands-on control. I anticipate that there would be quite frequent discussions between the NDA and Ministers, but we would not want to build that into statute. The minimum statutory requirement is a five-year review. But Ministers will have to engage with the NDA more frequently than once every five years. Budgets are not set that far in advance. Hence, fairly close consultation will be required, probably at least on an annual basis.

The statutory requirement on the strategy itself would be five years. It is not a huge change, but it is a change which means that statute bites only every five years. However, the NDA management will need to talk to Ministers more frequently than that.

Lord Maclennan of Rogart

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn. Clause 11 agreed to.

7 p.m.

Schedule 2 [Procedural requirements applicable to NDA's Strategy]:

Lord Dixon-Smith moved Amendment No. 35

Page 135, line 14, after "activities" insert "or any proposed changes in the activities"

The noble Lord said: At last the Government will be able to relax a little, because I confidently expect them to tell me that my amendments are unnecessary. However, I thought it worth tabling them. Amendment No. 35 deals with page 135. That is part of Schedule 2, which deals with some of the detail of how the strategy should be prepared. I specifically raise the issue of consultation. Amendment No. 47, which is grouped with Amendment No. 35, deals with page 137 and raises the same point in relation to annual plans.

My concern on reading the provisions was that we have consultation by the NDA and various groups. Paragraph 4(2)(h) of Schedule 2 refers to, every body established—

1. (i) by the NDA, or
2. (ii) by a person with control of a designated … site or designated facility,

for the purpose of consulting persons about activities carried on at, or in connection with, such an installation, site or facility".

Generally speaking on consultation, particularly in relation to plans and strategies, what concerns people is not what goes on at the site, but the changes that will go on in future.

I am confident that I shall be told that my amendment is unnecessary. However, I wanted it to be quite explicit that the consultation was not confined to activities on the site, and that it had been specifically designed so that the public and all the people who needed to know what changes were to take place did so. Therefore, I thought that I would table the amendment to enable the Government to make explicit what I thought was the intention of the Bill. I beg to move

Lord Whitty

The noble Lord anticipates my remarks. I was not entirely clear on the intention of the amendment but, if it is simply to make it clear that the consultative bodies set up by the NDA and the licensees would have to discuss a change in activities as well as activities ongoing, our view is that "activities" subsumes changes in activities, their delivery, the amount of money provided for them, who is employed in them, and so on. It is a fairly substantial requirement to consult about those activities, which clearly includes any change in them. Therefore, I would have thought the amendment unnecessary, but the noble Lord has my clarification on record.

Lord Dixon-Smith

I am grateful to the Minister for that brief reply, which makes the point that I wanted made. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 36 to 38 not moved.]

Schedule 2 agreed to.

Clause 12 [Content. s of strategy]:

Lord Brooke of Alverthorpe moved Amendment No. 39

Page 11, line 6, after "how" insert "and when"

The noble Lord said: Our amendments in the group are in two sections. The first section is Amendments Nos. 39 to 41, which relate to the contractual regime under which the NDA will operate. Although the White Paper, Managing the Nuclear Legacy—A Strategy for Action, envisaged benefits from competition, in practice achievement of other White Paper requirements on openness, transparency and high safety and environmental standards called for collaboration. Although we accept that competition is an objective, we are strongly of the view that it must not undermine the other key objectives in any way.

Furthermore, it is clear that setting site management agencies in competition with each other may not be conducive to the pre-exchange of information required in order to achieve synergy and sharing of lessons learned. Such collaboration needs to take place on the basis of equal access to knowledge. Long-term relationships will need to be created, with measures identified to foster innovation. Supporting that framework, it will be vital to fund generic research to underpin nuclear clean-up.

Lessons from previous experience—clearly illustrated by the contrasting regimes at Dounreay and the Atomic Weapons Research Establishment—show that key criteria include, first, minimising the number of organisational interfaces, in particular with regard to safety implications but also in regard to other regulatory dimensions such as planning; secondly, value for money considerations taking account of the benefits of wide-ranging expertise, allowing lessons learned in one area to be applied in subsequent projects with no additional costs; thirdly, requiring all contractors to have sufficient funds to deal with contingent liabilities arising from their work; fourthly, the principal contractor being able to demonstrate effective control over site operation at all times; and, fifthly, requiring all contractors to provide independent evidence of high technical and managerial quality.

All these requirements imply a more open, longer-term, iterative approach to contractorisation than is normally the case. The overall aim must be to facilitate a process that avoids fragmentation, supports bids of a high quality and encourages continued innovative participation. This is what we have in mind with Amendment No. 40, which calls for appropriate competition, although we accept that further work is needed to define the competitive framework more precisely. That is why Amendment No. 41 calls on the Secretary of State to provide guidelines to support this process. An appropriate next step would be to issue draft guidelines for consultation, as is currently being done in respect of the draft framework for stakeholder engagement.

We strongly support this approach although, as our second section of amendments—Amendments Nos. 42 and 43—indicates, we think the current provisions need strengthening. There is, for example, nothing to stop the NDA ignoring completely any of the points that emerge as a result of the stakeholder dialogue. It is in no one's interests—least of all in terms of building public confidence in the NDA—to present a shop window with nothing at all behind it.

To deal with this we would like to see a mechanism whereby the outcomes of stakeholder meetings are put to the NDA board, which should then come up with a clear decision for or against taking action on particular proposals. This is not intended in any way to impede NDA decision-making and we fully recognise that decisions will need to be taken that do not always command universal support. However, if the Government are serious about stakeholder engagement, it is necessary to ensure that the loop is fully closed and that there is both transparency in decision-making and a clear channel for bringing decisions to the public arena. I beg to move.

Lord Whitty

I shall deal with the two sections of amendments separately. As regards the first three amendments dealing with competition, clearly we would expect the NDA to describe how it intends to promote competition. This will include details of priorities, time scales and so on. The five points raised by my noble friend in this regard would undoubtedly be party in one way or another to its approach to competition.

But it is difficult to write into statute or the strategy an exact prescription of how competition in all contexts will be carried out. More particularly, the amendments would have the unhelpful effect of requiring the Secretary of State to define the nature of "appropriate competition". This is precisely what we are asking the NDA itself to do.

Of course the Secretary of State will have a close interest—indeed he will have final approval of the overall approach in the strategy—in respect of competition, but it will be the NDA's expertise that will tend to determine what particular points are pursued as appropriate. It is not entirely clear what the distinction between "appropriate" and "effective" would be.

My noble friend is right that the level of expertise required to be an effective competitor for most of the large-scale NDA contracts as envisaged would be fairly rare and would require companies to have built up a significant amount of expertise in the area. There will be other contracts, of course, for which that range of expertise will not necessarily be required. With the main site contracts, clearly that is what we are talking about.

The NDA will need a fair amount of information to ensure the spread of best practice, to be able to identify synergies between what it is doing and requires and what the company is offering and to judge the basis for site management contracts. That is why some of the information will undoubtedly be commercially confidential and there will be issues that we touched on in the debate earlier.

I do not see the benefit of changing the wording of what the NDA has to put in its strategy. In particular, it would not be appropriate to place the duty on the Secretary of State in the Bill.

As regards Amendments Nos. 42 and 43, we want to see openness, transparency and engagement with stakeholders by the NDA. We support that general thrust, but the implication that the rather rigid process of dialogue between the formal stakeholders' meetings and the NDA board would improve that situation and that engagement seems a little fanciful. If, in effect, the stakeholders' meetings were not entirely consensual, particular propositions would come down to majority votes being presented to the board, and the board would formally have to say whether it accepted the proposition, accepted a part of it or rejected it. That is a mechanistic relationship which is not in the best interests of positive and creative stakeholder dialogue. I therefore would not accept the wording of that part of the amendment. There may be aspects of the amendments that we are prepared to consider in terms of improving the stakeholder dialogue, but I would not be happy with the one to which I have referred. No doubt the noble Lord may wish to return to the issue in a more general sense at the next stage, but not in the form of the amendment.

Lord Maclennan of Rogart

I support the amendments, particularly the first group. I agree with what the noble Lord said in support of them.

It is important to realise that once a contract has been allocated, if the main consideration in the mind of the contractor is how to sustain his position against other possible contractors who may be invited in at a later stage, that will alter the priorities in an undesirable fashion. Therefore it is right that the contractor should have in mind how the job is to be done as efficiently and as cost-effectively as possible in general terms at each stage of the development of the work within the allotted period.

If it becomes necessary constantly to demonstrate at each site at which a contract has been allocated that that is so, it is bound to impose additional and perhaps unnecessary responsibilities that will add to the costs of the operation without necessarily improving it. Competition will be periodic in its term, but if it is continuous in its effect it could be more disruptive of the work than helpful. I hope that the Minister will reconsider his reluctance to have ministerial guidelines on what is meant by "competition" inserted into the Bill.

There is a peculiar kind of competition in the industry and the decommissioning business. There are few players, and the work is extraordinarily specialised and leading edge. A great deal of emphasis was placed earlier on the whole question of commercial confidentiality. How that impinges on competition is difficult to work out.

It is not entirely clear what is meant by competition here. We would like greater clarity about that. That is against a background of it being widely perceived in the nuclear industry—particularly by the UKAEA—that excessive contractorisation at an early stage was disadvantageous to the objectives. Those who have observed that hope that we can learn from those mistakes and that the Government are willing to spell out—perhaps not today, but later—exactly how they see that competition operating. There is a large question mark over the duration of the contracts and the relative priority that the Government give to the matter in Clause 12(2)(c) over other matters that must be borne in mind by the NDA.

7.15 p.m.

Lord Brooke of Alverthorpe

I am grateful for my noble friend's intervention, which was helpful. In our opinion, these will not be the straightforward types of contracts that we normally encounter. The somewhat lengthy debate that we had earlier about confidentiality and about what can or cannot be disclosed impinges, to a degree, on the kind of problems that may arise here.

I am pleased that the Minister at least said that a definition will need to be produced. He said that the NDA will he required to produce a definition for the contracts. I did not know whether that was an invitation to me to move an amendment to delete "Secretary of State" and insert "NDA". But the more I listen, the more I suspect that that invitation was not being extended. None the less, I endeavoured to define what we meant by appropriate, as distinct from straightforward, effectiveness in a contract to try to demonstrate that that will be different to contractorisation that we normally encounter. I would be grateful if the Minister would read in Hansard what I said, in the same way that I shall read in more detail what he said to me.

As for Amendments Nos. 42 and 43, we would not want a mechanistic process to be introduced. If the Minister feels that what we are proposing is too mechanistic, we will take the provision away and see whether we can find something that might be more flexible. From personal experience as a non-executive director of National Air Traffic Services, where we have stakeholder council meetings taking place twice a year, in the main, most stakeholders reach a consensual approach on issues that then find their way to the hoard. But, beyond that, there is no requirement for anyone to do anything when it finds its way up to the board.

There is possibly a case to be made for a little clearer direction for the purposes of openness and raising respect for the stakeholder council and its relationship with the NDA hoard in future. From my experience in NATS, we may need more than we have at present. Therefore, we will consider the matter and may return at Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Baroness Fookes)

I take it from what the noble Lord said that he will not be moving Amendments Nos. 40 to 43 inclusive.

[Amendments Nos. 40 to 43 not moved.]

Clause 12 agreed to.

Clause 13 [Annual plans]:

Baroness Miller of Hendon moved Amendment No. 44

Page 12, line 30, after "NDA;" insert— () for the carrying out, during that year. of research and development;

The noble Baroness said: I have been watching the clock for the past few moments. That is not because I was not grabbed by the interesting debates that we have been having, all of which were fantastic, but because I must apologise to members of the Committee on behalf of my noble friend Lady O'Cathain, who was unable to stay. It is a pity that only now are we about to discuss research and development, to which these amendments refer, because it is a subject that must be given consideration. In any event, whatever we say is probing. Therefore, I shall speak about what Amendments Nos. 44, 53 and 62 are intended to achieve.

Of course, research and development should be of primary importance to the NDA, a point we discussed when considering other amendments earlier today. Good, targeted research and development has the potential to reduce the costs and time-scales of nuclear decommissioning programmes. The Minister pointed out that the Government have made much of this subject in their reports.

We believe that the Bill neither gives adequate weight to the importance of research and development activities, nor puts sufficient onus or responsibility on the NDA to ensure that research and development programmes are maintained under the authority. These amendments seek to underline the importance of the need for the NDA to focus on research and development.

We believe that the attitude of the Minister to these amendments will demonstrate the Government's commitment to keeping the nuclear option open. I shall say no more than that. It is a question of how much importance the Government attach to it. The amendments would provide concrete measures to ensure that the important activities of research and development are given appropriate weight under the NDA regime.

Amendment No. 44 would require the NDA to add research and development activities to its annual plan, while Amendment No. 53 requires a report on R&D to be included in the annual report. To an extent, therefore, Amendment No. 53 is consequential on Amendment No. 44. Amendment No. 62 simply seeks to make the clean-up responsibilities include an element of R&D, thus emphasising its importance.

I have set out our views on R&D for the Minister and I beg to move.

Lord Jenkin of Boding

This is an important amendment and I rather regret that we are starting it at twenty past seven in the evening. I have been keeping an eye on the noble Lord, Lord Triesman, to see whether he is girding his loins to rise and bring our proceedings to a close, but he is not. Either we shall need to interrupt the debate half way through, or we shall need to work beyond half past seven.

Two quite separate elements are sought in this small group of amendments. The White Paper, Managing the Nuclear Legacy, contains a substantial section beginning at paragraph 3.36 dealing with what was then envisaged as being the research obligations of what was then called the LMA and is now known as the NDA. I shall quote the beginning of the paragraph: BNFL and UKAEA commission research where necessary to improve safety and operational performance and develop solutions to specific clean up problems". It is perfectly clear that the NDA will have to undertake research on clean-up problems and it is equally clear that there is a good deal of wisdom and experience residing in both of those organisations.

However, in paragraph 3.37 the White Paper goes on to state that: More generally, the LMA will have a direct interest in the improvement of the technology available for clean up and of the underpinning science". That clearly implies that the NDA will carry out a good deal of research as its work proceeds. The Minister is nodding vigorously, so I do not need to dwell on that point; I must be right.

However, as my noble friend Lady Miller of Hendon indicated, there is another aspect relating to keeping the nuclear option open. I am sure that many noble Lords will have received the December issue of Postnote - The Nuclear Energy Option in the UK. It was an extremely helpful and balanced note on the position. When one looks at the provisions envisaged by the Government for keeping the nuclear option open, one feels some alarm. Page 3 states: The research programme 'Towards a Sustainable Energy Economy', operated jointly by three research councils, will spend approximately£5m on general nuclear technology research over the next four years". I have attended a number of conferences recently, notably the "Energy Choices" conference, to which reference has already been made. I can inform Ministers that that figure of£5 million is greeted with derision by the scientists involved in the programme. They see it as not measuring up at all to what is required.

When the Government gave evidence to the House of Commons Science and Technology Committee inquiry into what is now called RD&D—Research, Development and Demonstration—they stated: Nuclear fission R&D has been declining steadily over the last 10–20 years. Publicly funded research into fission reactors began to decline with the privatisation of the electricity sector in 1990/91. DTI (previously Department of Energy) funded nuclear research has decreased from£164m in 1989/90 to just£17m in 2000/01–a reduction of 90%. All of this current expenditure is on fusion related work and there is currently no expenditure on fission R&D". That was a source of some dismay to the Select Committee, whose remarks I shall not read; it was then answered in the Government's response to the committee's report.

If "the nuclear option" is to have any meaning—here I touch on the remarks of the noble Lord, Lord Maclennan of Rogart—and if this country is not to become wholly dependent on technology and work overseas, we must undertake more research in this country. There are options for new reactors. I refer to the admirable Postnote, which identifies three designs as the likeliest contenders in the short term. The first is the ACR 700—the advanced Canadian Deuterium-Uranium (CANDU) reactor 700Mwe, designed by Atomic Energy of Canada Ltd. Those reactors are now being sold around the world. It is building them within their cost estimate and within the time-scale quoted for completion. That technology exists, but it is not British; it is Canadian. The second design is the BNFL-Westinghouse AP1000, which is an advanced-passive 1000MWe reactor. The third is the European Pressurized Water Reactor 1600M We—EPR—designed by Framatome ANP. All those are substantially foreign.

That is not all. I do not know what work is being done now—I shall come to my questions in a moment—but there are, in addition, what are called Generation IV projects. The Generation IV nuclear research programme is currently being examined by an international consortium. A contribution is being made indirectly to the Generation IV work through the EU, I understand, but one is left with the astonishing figure of£5 million to be spent over the next four years on nuclear fission research.

I attended the "Energy Choices" conference, which was addressed by the Minister of State for Energy, e-Commerce and Postal Services, Stephen Timms. He announced that the position was under review and might change. There was a glimmer of hope that the Government were beginning to recognise that, if we are to be able to take advantage of any of the new technology and have power stations that have substantially longer lives, are substantially cheaper to construct and operate and are, in many cases, even safer than those that we have, we must do the research in this country. That is what this is directed at, not just the question of research on the whole decommissioning process. I am sure that the NDA will do that, but it will be for the Government to make sure that research is done in a way that enables the British energy generating industry, if it becomes necessary—I have made it clear that I think that it will, but others may take a different view— to take advantage of it and not go cap-in-hand to foreign suppliers and, as the noble Lord, Lord Maclennan of Rogart, said, find ourselves held to ransom.

The situation that we are in is probably as worrying as almost anything else. There are clauses coming up about skilled nuclear manpower—nuclear engineers and scientists—and there is a new clause at the end of this part of the Bill. That is equally important, but here we are dealing with research. Unless the Government are prepared to recognise that they must do more, the credibility of the nuclear option becomes almost meaningless. I am sure that that is not the Government's intention. I suspect that many Ministers recognise that there will come a time when we will have to replace nuclear with nuclear, otherwise we will not keep the lights on and meet our Kyoto objectives.

Research is at the heart of the matter and I hope that the Minister will be able to add something to what was said by his colleague from the DTI, Mr Timms, at the conference that I attended in December.

7.30 p.m.

Earl Attlee

During an earlier debate

Lord Davies of Oldham

I am very conscious of the fact that what the noble Lord, Lord Jenkin of Roding, said was right: we have started a major debate. We thought that it would be more limited but, clearly, it is a major debate. I am mindful of the time, so, if the Committee will forgive me for not anticipating the situation more accurately, it would be better if my noble friend moved the adjournment of the Committee.

Earl Attlee

On the basis that we can re-start with the amendment?

Lord Davies of Oldham

Of course.

Lord Jenkin of Roding

I do not want to weary the Committee, but one of the amendments that we might have come to but was not in the grouping is government Amendment No. 72. It will extend the Henry VIII clause to give the Government the power to modify Clause 12 by order. That has not been put before the Select Committee on Delegated Powers and Regulatory Reform. Having drawn their attention to the matter, will Ministers do anything about it? It will be difficult to debate the clause if it has not yet been examined by the Committee, unless it has decided that it does not need to do so.

Lord Whitty

I thank the noble Lord for raising the issue and bringing it to our attention. It was mistakenly not drawn to the Select Committee's attention earlier. In fact the amendment to Clause 32 is a minor, consequential amendment to correct an oversight from the division during the course of the drafting of what was originally Clause 11 into what are now Clauses 11 and 12.

Contrary to the noble Lord's implication, there is no change in policy. A memorandum to the Select Committee sets out clearly the powers in Clause 32 to modify the provisions in Chapter 1. We have contacted the Committee to explain the effect of that and why it has arisen. The chairman agreed that there is no need to call a meeting of the Committee to consider the amendment, so that need not delay us.

It is unfortunate and I apologise to the Committee, but in the light of the explanation that I have passed to the Select Committee, it is unlikely that it will want to comment substantively on the amendment.

Baroness Carnegy of Lour

I am a member of that Committee. Do I understand the Minister to say that the amendment has not been before it?

Lord Whitty

No, we contacted the chairman and he has accepted our explanation. The Committee can return to it, but he says that in his judgment there is no need for us to delay consideration until the Committee meets. That is his judgment, on which the Committee will be able to take a view, but because the amendment is consequent on how the Bill has been drafted rather than a new matter, his view is that we do not need to delay its consideration.

Lord Triesman

This may be a convenient moment at which to adjourn the Committee until Thursday.

The Deputy Chairman of Committees (Baroness Fookes)

The Committee stands adjourned until Thursday at 3.15 p.m.

The Committee adjourned at twenty-two minutes before eight o'clock.