§ Lord Hatch of Lusby asked Her Majesty's Government:
§ What contracts have been obtained by BNFL for the reprocessing of spent nuclear fuel at the thermal oxide reprocessing plant at Sellafield.
§ Viscount UllswaterMy Lords, I understand that to date BNFL has secured contracts for THORP for the reprocessing of spent fuel containing 6,845 tonnes of uranium. Those contracts are worth over £5 billion and THORP will be a major export earner for the UK.
§ Lord Hatch of LusbyMy Lords, it may be that THORP will be a major exporter, but is it not the case that the viability of the THORP installation now depends on importing nuclear waste from other countries which will not process it? Is it not therefore the case that Britain is becoming the waste bin for Europe, in particular Germany, and for Asia, in particular Japan?
§ Viscount UllswaterNo, my Lords. One-third of the baseload capacity for THORP is committed to reprocessing spent fuel from UK reactors. In addition BNFL is currently discussing with Nuclear Electric and Scottish Nuclear new reprocessing contracts for UK spent fuel covering the post baseload period from 2002 onwards.
§ Viscount HanworthMy Lords, is it not a fact that since 1976 all contracts for dealing with nuclear waste contain a clause allowing for the return of the waste to the country of origin?
§ Viscount UllswaterYes, my Lords. I am happy to confirm that all reprocessing contracts agreed since 1976 contain options for the return of waste. It is our intention that those options will be exercised and waste returned.
§ Lord Williams of ElvelMy Lords, does the noble Viscount recall that when we last discussed this matter at Question Time on 17th January I asked certain questions about return on capital employed? If the THORP installation is to be two-thirds dependent on foreign contracts, which will certainly be less favourable in financial terms than domestic contracts, what will be the return on capital employed? If that capital is costed at the present base rate of 15 per cent., will the whole thing be in profit?
§ Viscount UllswaterMy Lords, I wrote to the noble Lord following our last exchange. I reiterate what I said then. The contracts that BNFL has already secured for THORP will ensure that over the baseload period—by which I mean the 10 years after completion in 1992—the capital costs will be recovered and the plant will make a profit. The eventual return on THORP will depend on the level of future business that is secured. BNFL is in the process of securing that business now.
§ Viscount MerseyMy Lords, will my noble friend confirm that BNFL is already signing contracts for the second decade of business and has just signed one with West Germany, which contains the usual clause about waste being returned to the country of origin, for £225 million?
§ Viscount UllswaterYes, my Lords. That is quite correct. BNFL has recently secured a contract for the reprocessing of a further 450 tonnes of fuel from the Federal Republic from 2002 onwards. BNFL is also confident of signing additional contracts with the Germans over the next few weeks, bringing the total value to £750 million.
§ Lord Williams of ElvelMy Lords, I am sorry to press the noble Viscount, but his answer—like his letter—does not take us much further. Can he kindly give an estimated return on capital employed for the THORP installation?
§ Viscount UllswaterMy Lords, It would be impossible to arrive at that figure. The costs of constructing the plant are well known —£1.8 billion. I have told the noble Lord that contracts have been signed for £5 billion worth of reprocessing. I cannot go further.
§ Lord Williams of ElvelMy Lords, is the noble Viscount saying that an investment of £1.8 billion is being undertaken without any estimate of what the return will be?
§ Viscount UllswaterMy Lords, I said that THORP will be run at a profit.
Viscount St. DavidsMy Lords, is this whole question not a clear indication that the Labour Party consists of little Englanders? Chernobyl and other incidents have shown that the destruction of nuclear waste is an international problem that should not be confined in the manner suggested.
§ Viscount UllswaterMy Lords, reprocessing is a proven and safe technology that keeps open the possibility of recycling uranium and plutonium. It puts the wastes into a better form for storage and ultimate disposal and avoids leaving spent fuel as a problem to be tackled by future generations.
§ Lord Boyd-CarpenterMy Lords, in view of the Labour Party's record on nationalisation, is it not very reassuring to find noble Lords on the Opposition Front Bench now anxious that concerns should make a profit?
§ Viscount UllswaterYes, my Lords, I hope I have indicated that that is indeed what will happen. As I said in my original Answer, THORP will be a major export earner for the United Kingdom.
§ Lord MolloyMy Lords, does the noble Viscount not agree that the entire nation considers this an extremely important issue which we should not allow to be reduced to a cheap level of political point-making?
§ Viscount UllswaterMy Lords, I hope that noble Lords will consider that I take the subject seriously, as does BNFL. It would not construct a plant to do what it considers is required with the waste unless it also considered it to be very important.
§ Lord Hatch of LusbyMy Lords, was not the contract with the West Germans arrived at when planned reprocessing in Bavaria was scrapped as a result of German public opinion being against it? However great the profits the Government or BNFL may make, are those profits not being obtained at the cost of endangering the health of the people around Sellafield?
§ Viscount UllswaterNo, my Lords. The health of the people working at the Sellafield plant is considered carefully. BNFL, the Sellafield workforce and associated trade unions work closely together to try to reduce radiation doses wherever possible. Over the 10-year period to the end of last year, the average dose for the Sellafield workforce was reduced from 8 millisieverts to 3 millisieverts which is a long way below any recommended level.
§ Lord Hatch of LusbyMy Lords, is not the level of leukaemia among children in the Sellafield area much higher than the national average? Will the noble Viscount answer my question as to whether the Germans turned down the plant in Bavaria because of the opposition of German public opinion?
§ Viscount UllswaterMy Lords, it is correct to say that the German plant has not gone into production. But it would be wrong to say that a profit will be made out of exposing workers at Sellafield to leukaemia because of that decision.