HL Deb 11 December 2003 vol 655 cc893-924

Second Reading debate resumed.

4.34 p.m.

Earl Attlee

My Lords, this is indeed a fascinating debate to take part in, and I agree with practically everything that has been said so far. The exception is the most helpful and important contribution from the noble Lord, Lord Beaumont of Whitley. We may not agree with all his points, but we are certainly interested in them. I think that most noble Lords recognise that energy is a matter of Byzantine complexity. All noble Lords will be grateful to outside organisations for their briefings, which will inform our debates over the next few weeks. The noble Lord, Lord Beaumont, will be pleased to hear that I found the Greenpeace presentation very interesting.

I agree with my noble friend Lady Miller. It is quite bizarre not to have the DTI Science Minister, Lord Sainsbury, involved in the Bill. My own interest in it stems directly from my interest in science and technology.

The Government have four main objectives in their White Paper, which seeks to move us towards a low-carbon economy. Unfortunately, all the objectives cannot easily be met at the same time and balances have to be struck. However, the most critical objective is the security of supplies in both the short term and the longer term-the "need to keep the lights on", to quote the jargon.

Many noble Lords have vigorously expressed their concerns about the future major reliance on gas for 75 per cent of our primary power for both electricity generation and direct heating applications at home and in industry. It will be a real challenge to balance the need to let the market work with the duty of government and regulators to ensure diversity of supply. There is much good in the Government's policy, and many of the Bill's provisions are desirable. As I said, however, there are balances to be struck. The Minister will have to convince us that he has got it right.

As many of your Lordships have noted, renewables are not the whole answer. Most have already touched on the need for new nuclear build, a point which has resonated round the Chamber positively during recent Question Times. Many serious commentators say that new build will eventually be necessary if we are to meet our carbon targets. Perhaps we can cease using hydrocarbon fuels for transport and utilise electricity instead.

We could certainly see a large increase in demand for electricity despite the Government's commendable energy-saving efforts. Some observers are surprised that the Government keep the Magnox power stations running despite their marginal profitability. Could it possibly be due to their desire to maintain that 6 per cent of our electricity portfolio from Magnox which is totally carbon-free?

Neither the public nor politicians will support any new build until the problem of nuclear waste has been solved. The Science and Technology Committee of your Lordships' House published an excellent report on the management of nuclear waste on 10th March 1999. I strongly advise your Lordships to read it. I have to say that the Government's response to the report and their attitude to the issue are extremely disappointing.

In answer to one of my supplementary questions, the noble Lord, Lord Whitty, suggested that because the half-life of some of the material is measured in tens of thousands of years, it is not necessary to be in a hurry. I agree that it is not a matter to be rushed. However, we must do something a little more impressive than appoint a committee with instructions not to report back for two years. Unfortunately, the chair has reported back after chairing her first meeting, but only to resign. I wonder why. I do not agree with my noble friend Lord Jenkin of Roding. The Government have not put this issue into the long grass; they have put it into a deep geological depository.

We cannot undo nuclear waste; it is very nasty stuff, and it exists as part of our nuclear legacy. As an elected hereditary Peer, I accept some responsibility, as my grandfather-the first Earl Attlee-started our nuclear weapons programme. Later, we ran a civil programme alongside a military one, but I doubt that decommissioning costs or difficulties were ever fully considered or even planned for. One wonders whether the decommissioning difficulties of the prototype fast reactor at Dounreay were ever properly considered. However, we cannot shirk our very onerous responsibilities to future generations just because we inherited them from someone else.

If we do go for new build, it will not produce much more waste but we shall have to ensure that the decommissioning and waste is fully considered and costed. Public confidence would be much enhanced if a suitable repository were already in operation- perhaps with capacity already earmarked for each new development. It could be desirable to have a segregated fund to cover decommissioning and waste management costs, as suggested by the noble Lord. Lord Beaumont.

The Select Committee report was published in 1999 but the events of 9/11 added a new dimension. A repeat, similar asymmetric attack is still a possibility. There appears to be no limit to the destruction that could be inflicted by a terrorist attack. I do not believe that, in those circumstances, any intermediate or high-level waste should be left on the surface unnecessarily. By that, I mean without good technical reason.

It is hoped that further precautions are being taken, but we do not expect the Minister to give away any details. However, we believe that a Minister of homeland security should have oversight of this matter, together with ministerial responsibility for the civil nuclear police, as mentioned by my noble friend Lady Miller.

There is another pressing reason for making progress. In relation to nuclear waste, 2,000 years is short-terra. In that time, a breakdown in society and civilisation is possible-perhaps even likely-possibly because the rate of development would become unsustainable. That is partly why we are changing our energy and sustainable development policies. However, what would happen in the event of a rapid-onset societal breakdown, possibly caused by a biological disaster, with a very low survival rate? Who would then look after what we have left on the surface at Sellafield? Who would rebuild those tanks every 50 years?

The Select Committee considered several options for disposal but rejected all but two, which were to keep geological repositories or indefinite storage on or near the surface. The options discarded were: placing the waste on the bed of the deep ocean; emplacement on the sediments of the deep ocean; emplacement in the rock beneath the deep ocean; emplacement in deep-ocean subduction zones, where one section of the earth's crust is moving over another, resulting in the waste moving towards the centre of the earth; placing the waste in the Antarctic ice sheets; or, ejection into space, as recently suggested by a noble Lord at Question Time.

All those options carry very serious difficulties and, quite properly, most have been prohibited by international treaty. They also make access practically impossible. The report euphemistically described as "other options": partitioning; nuclear transmutation, which is not feasible for intermediate waste or existing high-level waste; and, finally, Synroc-an interesting suggestion from the noble Earl, Lord Shannon.

I shall not weary your Lordships with a detailed description of what is meant by a "deep geological repository" because it is unnecessarily technical for the purposes of this debate and not yet fully determined. However, it would be phased as some waste must be accessed for inspection from time to time before being finally sealed. It would be deep-at least 400 or 500 metres-in order to be proof against the next ice age. Who says that politicians cannot think a long way ahead? Some suggest that the repository could even be kilometres deep. I would support that if it were technically sound and even if it were only a slightly superior solution.

I recently asked the Minister what option, other than a deep geological repository, was remotely feasible. He gave me some high-quality waffle but did not really answer the question. Therefore, my first question is: what is remotely viable other than a deep geological repository? My second question is: what is the difference between CoRWM and the previous Radioactive Waste Management Committee? Has the latter been disbanded?

Therefore, what is to be done? The Select Committee report is very helpful because, in pointing the way ahead, it stresses the need for public engagement, education and understanding. It is obviously an extremely sensitive issue for all stakeholders. I take on board the point made by my noble friend Lord Jenkin that the previous administration tried to do something, and it is unfortunate that the relevant inquiry exceeded its terms of reference. This is not a policy that can be steamrollered through, and the work involved will outlive several changes of government.

I believe that we in Parliament need to agree on a cross-party basis which option to go for. That is not difficult as I believe that there is only one viable option, but it is a good one. Then, time and money need to be spent on public education so that there is a far greater understanding of the issues. The public would not be easily convinced if, 10 years later, a solution became essential because of the pressing need for new nuclear build.

A three to six month campaign wou'd be totally inadequate and even counter-productive. It may require TV advertising at public expense-but not after midnight-overseen by an independent committee for objectivity. It may be necessary to consider compensation, not as a bribe, which would be covert and sinister, but as something transparent and accountable. Doing nothing about nuclear waste, or stalling, is not an option. It would be unforgivable to inflict a nuclear environmental disaster on society- whether this or a future one. We certainly cannot leave it until new nuclear build becomes imperative.

4.46 p.m.

Lord Lea of Crondall

My Lords, despite having views on nuclear, renewables and energy security which are not dissimilar from those of speakers such as the noble Baroness, Lady O'Cathain, I approach the Bill in a far more positive spirit than have many noble Lords who have spoken. I want to give my reasons for what I have just said.

I believe that the noble Lord, Lord Jenkin, asked what was in the Bill to keep the nuclear option open. I sympathise with that view. However, in a way that I may be able to put my finger on, I believe that the Bill represents a step forward. Perhaps the one element that is helpful in that pro-nuclear direction-if that is where noble Lords are coming from-is the role of the NDA in building up a new independent credibility in relation to all the big questions which are at the heart of the subconscious, as well as the conscious, concern about nuclear in all its aspects.

The people who must ultimately feel comfortable with nuclear must be brought round if it is to go ahead. A commission that can build up its credibility as having independent judgment on the nuclear issue can, indirectly, provide the best kind of education because it is getting on with the job. That is its expertise and that provides its central credibility. As I understand it, however the lines of demarcation are formally designed, it will become very much involved with issues of depositories, as referred to by the noble Earl, Lord Attlee.

I believe it is no accident-this is the wider, positive point-that the whole issue of nuclear has started up again in a big way. Today's debate is an excellent example of that. That may be because we have been asking questions about wind turbines. Those have become a hot issue, as has energy security, with reflections on the proportion of energy that will be derived from the Arab world, Russia or central Asia. But I believe that there is a sense in which the nuclear debate is back on the agenda.

I was involved to some extent with that issue and with the problem of public explanation. In the late 1980s, I led trade union missions to both Chernobyl and Three Mile Island. I believe that only now can we put those accidents into any kind of proper context in terms of scale compared, for example-I consider this to be an interesting comparison-with 9/11.

No doubt he will correct me if I am wrong but I think that the noble Earl, Lord Attlee, referred to a terrorist attack on somewhere such as Sizewell, for example. He said that there is no limit to the impact of the terrorist attack. Frankly, I think that is wrong. It is alarmist and with great respect I think it is wrong. If it is as bad as that-

Earl Attlee

My Lords, I am grateful to the noble Lord for giving way. I was particularly concerned about an attack on Sellafield, not on a nuclear power station, but of course there is a risk.

Lord Lea of Crondall

My Lords, let us take Sellafield. Either way, I shall make the point. If it is as bad as that we should shut it down now. But surely we are told without public statements necessarily being made to this effect-the public are entitled to know and have been told something along these lines; perhaps my noble friend will take on board the fact that this point has been raised today-that the worst case scenario from a terrorist attack is not a widespread area covered by high level radioactivity. If that is what is said-I believe that is the position-let us put our cards on the table and say who is right and who is wrong. Let us consider the question and have answers on it.

The £40 billion legacy of nuclear waste-I do not know who invented that figure but that is what is being bandied about-is there whether or not we have new nuclear build. The Bill reflects a new determination to tackle that whole question, not just in the narrow sense of decommissioning but in all that goes with what will be done as part of that so-called £40 billion legacy. Even if we are behind such countries as Finland-I think we are, although strangely enough they were not the pioneers of Windscale, Sellafield, Cap de la Hague and so forth-that is something which they are now exemplars of.

I turn to the relationship of all of that to renewables, wind energy and the very interesting contributions which have been made on that point. Although I am not quite such an enthusiast for wind energy as some commentators-there do not appear to be many enthusiasts in this debate among people with long experience of energy policy-I support the contribution of wind energy. Equally, I am not surprised that renewables-mainly wind energy and hydroelectric which, of course, cannot grow very much-have not been able to reach the target of 3 per cent for this year. We must remind ourselves that wind energy was always meant to be part of a balanced policy. We shall struggle very hard to get 15,000 turbines up and running even by 2020.I shall be corrected if I am wrong but I believe that is the arithmetic. Coincidentally, the target corresponds to the amount of electricity generated by nuclear at present. That is not to say that the whole of nuclear would be shut down in that scenario. It just so happens that that is the amount of electricity involved.

However, against that background it would not make a net addition to the CO2 target. I think that some people may be confusing the CO2 target with the renewables target. If wind power is swapped for nuclear power there would be no addition to the CO2 target. I have often thought that the nomenclature for nuclear could be widened to embrace it as being one of the renewables. In effect, we are not short of uranium; there is plenty around, and it should fall into the same category. There has also to be considered the financial arrangements for taxes, levies and subsidies to meet Kyoto targets which are not, on the face of it, on a level playing field at present so far as concerns nuclear and other forms of non-fossil fuels.

My concern is not only that we should not make a big programme of renewables; there have to be some in places which are visible. I am not one of those who squeal at this. This is not a nimby issue but we must be careful that we do not allow ourselves to get into a position where there is a danger of wind farms being oversold.

In some respects in meeting these targets we are on a down escalator going up. It is highly commendable that the Government are taking the issue of renewables as seriously as they are. However, that leads to the equally strong commitment to considering very soon the timescale and wherewithal of moving towards a nuclear build programme, which arises from this debate, not least because of the question of energy security in its broader sense.

This issue has become prominent in the weeks and months since the publication of the White Paper in February. Now that we have reached December, I believe the mood of the country is much more one of concern than it was in February. Whether we think of Russia, central Asia or the Arab states, when we reflect on the position in the North Sea and the percentages that are being talked of in the medium term, people are a little worried, not about the lights going off just like that but about the general negotiating leverage that we shall find ourselves at the wrong end of.

Perhaps the Minister can confirm an interesting point raised by the noble Lord, Lord Gray, who referred to a report, which I thought was very well done, from the Trade Unionists for Safe Nuclear Energy (TUSNE) on the costs of nuclear being below the cost of renewables. If we all sat here for the whole of the weekend we would not agree on this or on any other question of how one compares apples with apples in the energy debate. My view is along the lines that taking the total cost economics of externalities, nuclear comes out pretty well. Perhaps my noble friend can comment on the fact that we are not apologising for nuclear as being a very uneconomic form of energy. That does not need to be thrown into the balance because of energy security. It will make a major contribution in the medium term only if the economics work out. I think the French have made the economics work out and I have no reason to think that they do not work out, but the question of how one does the arithmetic is debatable. Again, a little more arithmetic in due course from the Government on the contrasting subsidy regimes is necessary if we are to have an adult debate. I have not read all the documents on this subject and may have missed this, but I do not think it is easy to pick up that point directly at present.

Finally, all forms of energy require a great deal of engineering and that is an area where public education- I include education in schools-has gone wrong. I go into schools from time to time. In them there seems to be a kind of engineering free world. There are nice pictures on the walls. Everything is green-with respect to the noble Lord, Lord Beaumont.

I am very much in favour of sustainable development. I was part of the government delegation to Rio de Janeiro in 1992. We have always stood very much for sustainable development. But this naï ve and facile greenery, this world with almost no engineering, is not a real world. It is not a proper part of public education. We must put that right in the schools. There are many things going on in schools, but I do not think that we have that right at the present time.

If the situation in the schools means that there is no future for this kind of industry, what will happen to the present stock of skills? A very distinguished member of the industry put the point only the other day. She said:

The nuclear industry so far as its future possibilities of development in this country are concerned, is all in the brains"- and she pointed at her head-

of those approaching retirement". I thought that that was a powerful way of looking at the matter.

I turn to the question raised about Defra versus the DTI. The Bill will be introduced by my noble friend in this House. Some Bills must begin in this House if we are to make some attempt to deal with the congestion at the end of the Session. I do not think there is a real point here. Twenty years ago the noble Lord, Lord Heseltine, I seem to remember, was Secretary of State for the Environment and had some responsibilities on the matter. This issue has been handled in Whitehall in different places and at different times. Am I not right that the noble Lord, Lord Jenkin, was Secretary of State at the time of the three-day week, and that he gave us some advice with a homely touch about dealing with shortages of supply at home at that time? It was then the Department of Energy. So the issue can be dealt with in different ways.

I was a member of the Energy Commission in the late 1970s. I think that had some crosscutting advantages, but it was shut down under the noble Baroness, Lady Thatcher, quicker than one could say, "TUC go back to Moscow". Ever since it has not been flavour of the month in Whitehall.

All noble Lords have moved some way from the content of the Bill, but this is an opportune moment for everyone to put these wider considerations into the arena. I very much look forward to my noble friend's response.

5.2 p.m.

Lord Chorley

My Lords, I shall try and be a little briefer. I think it was the noble Lord, Lord Ezra, who best summed up the Bill. He said that it should be re-titled the "Energy (Miscellaneous Provisions) Bill". It is, as he said, a Bill of missed opportunities which, as I think almost every speaker has said, has little to do with the real energy supply issues that we shall face in the years ahead as we shut down not only our nuclear power stations but our expertise and rely increasingly on wind power and energy from abroad. I emphasise that in this sector the lead times for decisions to be effective are long-10 to 20 years.

I do not wish to go over all the ground again, either on nuclear or wind power. I simply find incredible-indeed, alarming-the seeming faith that the Government have in wind power. It is a hugely expensive, inefficient and unreliable source of energy. Some of the facts and figures quoted by the noble Lord, Lord Christopher, who I see is not in his place at the moment-

Lord Lea of Crondall

Yes, he is.

Lord Chorley

I apologise.

Lord Christopher

They seek him here; they seek him there.

Lord Chorley

My Lords, I was about to say that his was an outstanding contribution to this debate from someone who clearly knows what he is talking about, as was the speech of the noble Lord, Lord Jenkin of Roding. They confirm and amplify that the Government are going for wind hell for leather and regardless of the economics. They are appeasing the anti-nuclear lobby while seriously worrying the older and more traditional environmentalists.

One of our concerns is the proposal to chip away at long-established planning arrangements. Last week, when we debated the gracious Speech, I referred to the proposed changes in the draft PPS22, which will replace PPG22. In a number of respects, that significantly weakens the national park and AONB protection. The noble Lord, Lord Bridges, touched on that today. I shall not repeat myself.

I want to consider another aspect of the planning arrangements, which is tucked away almost at the end of the Bill. I refer to Clause 150. The admirably succinct overview of the Explanatory Notes says that this clause is to, reform the planning system for large energy projects handled by the DTI to enable the appointment of additional inspectors to speed up public inquiries". Rather more detail is given later in paragraphs 370 to 373. Reference is made to the need to consider the issues at public inquiries concurrently, rather than sequentially and to the fact that that might be the approach adopted for large power stations-by that I assume they mean those over 50 megawatts capacity- and overhead lines. I assume that that means the grid and so on.

I want to ask the Minister today what all that will mean in practice and whether we should look for some form of safeguard to protect people with legitimate concerns about landscape and planning issues. When there is all this pressure, there is a tendency to get out the bulldozer to override legitimate objections. For example, would, contrariwise, Clause 150 be helpful in dealing with a scenario-I think that it is a real possibility-that I raised last week? I shall paraphrase it, but the detail is in Hansard for 4th December. I said that there were many applications for wind farms in Cumbria and that no doubt there might be many more. Each is likely to be fiercely fought over by the locals. Last week, I said:

It seems absurd to hold perhaps a dozen-or maybe more- public inquiries, in many instances in overlapping areas. Surely, there must be a better way forward. Would it not be fairer and more sensible to establish a reasonable amount of wind farm energy to come from Cumbria outside the national park and its buffer zones and then to settle the individual sizes and locations by a single inquiry?".-[Official Report, 4/12/03; col. 462.] Having dozens of inquiries overlapping; each other would be extremely expensive and inefficient.

I can best summarise my concerns in the form of four short questions. First, does Clause 150 have any relevance to the kind of scenario that I have just postulated? If so, how? Secondly, how in the circumstances of wind farms is a major power station defined; ie geographically? Thirdly, how in practice would power lines be dealt with? We know that we have to rebuild the National Grid to accommodate the new geographical sources of power and that that will cost at least £1 billion. Fourthly, how would the arrangements ensure that the relevant third parties- the public or those with a legitimate interest-are put on an equitable footing in the case of concurrent inquiries or indeed concurrent sessions of inquiries? There may of course be many other questions that will emerge.

I am not seeking an answer to those points today from the Minister. He has enough to do. Indeed, it would seem to me to be much more practical and productive in the first instance to discuss the points around a table. That would seem to be a rather more useful way than jumping straight in with probing amendments in Committee.

5.9 p.m.

Lord Maclennan of Rogart

My Lords, understandably, much of today's debate has focused on what is not in the Bill. I hope that the noble Lord, Lord Whitty, may regard my intervention as something of a relief, in that it will focus almost exclusively on what is in the Bill. I have two particular concerns, both of which fall under Chapters 1 and 2, dealing with the establishment of the Nuclear Decommissioning Authority and the powers given therein to the Secretary of State to make transfer schemes to change the management of nuclear licensed sites.

I am fearful of the impact of those arrangements on existing decommissioning programmes, which are currently being undertaken successfully by the United Kingdom Atomic Energy Authority, which, as a non-departmental body, would be required to become a contractor required to bid case by case in any future competition for the management of its sites.

As noble Lords will know, the authority has responsibility for Dounreay, Windscale, Risley, Calham, Harwell and Winfrith. Dounreay, which pioneered development of the fast reactor technology, is now carrying out decommissioning and environmental restoration of the site. Windscale has two major decommissioning projects demonstrating to the world that such a facility can be safely dismantled to plan using existing technology.

At Risley, the site has been restored and developed. At Harwell, formerly the centre of the UK's civil nuclear research programme, decommissioning and environmental restoration is at an advanced stage. At Winfrith, many of the nuclear facilities-including six reactors-have been removed and the site is being transformed into a highly successful business park. In 2002, Brian Wilson, the then Minister, celebrated the de-licensing there as the largest area of land to be removed from nuclear site restrictions in the United Kingdom, which is the ultimate target for all decommissioning. Fusion continues at Culham, but even there, attention is being given to the ultimate decommissioning of the site.

I do not suggest that the UKAEA has been faultless in discharging its roles. It made mistakes and was rightly criticised more than five years ago for poor safety and management standards caused by over-reliance on contractorisation. Since then, its recovery has been impressive-as I am sure that the Minister will agree-and lessons truly learnt, as the regulators have confirmed.

Accordingly, UKAEA is able to bring a wealth of experience to decommissioning. It has been instrumental in developing a project and contractor relationship where the work is directed by the authority but carried out by private sector companies in a strict regime of competition. The founding principle of that approach has been the policy of separating planning and programme management from implementation.

Under that approach, the long-term management of the sites has remained the responsibility of a public body, while the involvement of the private sector in implementation has been maximised by competitive procurement. More than 70 per cent of that work is now external-mainly through independent contractors appointed by competitive tender.

In 2001, the Department of Trade and Industry undertook a major review of the UKAEA's performance. The review recognised the progress that it had made since 1996 and commended that performance, including work done to recover from serious criticism of safety standards at Dounreay.

However, it appears that the creation of the proposed Nuclear Decommissioning Authority stemmed not from that experience but from financial problems in BNFL which emerged two years ago. The NDA will be a non-departmental public body with a mission of nuclear site clean-up. However, the UKAEA is such a body already doing that job on those sites. As a consequence, there is a danger of creating a parallel hierarchy. The requirement on the UKAEA to create capability where the organisation bids on a site-by-site basis could produce major disruption, which I doubt could be seen to be in the public interest.

The new arrangements must raise some questions about whether the UKAEA has a long-term future at all. A decision to put management of a site to competition, currently managed by the authority, would almost certainly require the break-up of the UKAEA into a number of site licensee companies and, given its small size, the loss of one of those sites would make its clean-up role at the remaining sites difficult to sustain. That would be especially true for Dounreay- by far the biggest site and increasingly the centre of the authority's engineering and technical expertise.

Also, if the authority is obliged to bid, its status as an NDPB is bound to cause restrictions on it that would not apply to other bidders in the private sector, so it would not be competing on an entirely equal basis. There are a number of possible solutions. I agree that it would not be appropriate for the Minister to address those detailed questions in today's Second Reading debate. In a sense, they are thoughts that my successor as Member for Caithness, Sutherland and Easter Ross, John Thurso, would have wanted to raise had the Bill begun in another place. None the less, I think that it is helpful to raise a range of possible approaches that should be considered before the Bill concludes its passage through this House.

The White Paper, Managing the Nuclear Legacy-A Strategy for Action, which the Bill is intended to implement, stated that the Government do not intend to change the ownership of the sites unless and until there is a need to do so on the basis of UKAEA's performance. It offered the authority the opportunity to demonstrate that it should be the supplier of choice for the NDA. However, there is no reference to that in the Bill, which gives rise to concern. If that remains the Government's policy, the position could be clarified by adding a new subsection to Clause 9 confirming that that policy remains.

Alternatively, the power to make nuclear transfer schemes for UKAEA sites in Clause 35 could be qualified to reflect the fact that a change in site management would be triggered only by a failure to deliver set standards of performance. Taking that argument further, the UKAEA could be allowed to get on with the job that it has started so well without having to devote its scarce resources to accounting for every move to the new authority, which can hardly be an efficient use of public money. I do not believe that that was the result envisaged in the White Paper or the Bill, but it requires more consideration.

Indeed, it is reasonable to ask whether the UKAEA should be written out of the Bill altogether. It may be left open to the Government at some stage in future to consider including the UKAEA-the Secretary of State could be empowered to bring that back as a matter for Parliament to consider. That would at least provide a reasonable degree of certainty and ability to plan for the future for UKAEA, which the Bill makes more difficult.

Although its apparent intention remains to award the first contract to the UKAEA, the duration of those initial contracts is yet to be determined and to be subject to approval by Ministers. I propose that the concept could be pushed a little further.

There is a wider principle, which might simply be a matter of clarification, regarding the principle duties of the NDA, as set out in Clause 9(1). They include the protection of the environment, public health and safety and nuclear security. However, they do not include the need to support fragile local economics, which depend heavily on nuclear sites for employment and business opportunity. However, Clause 10(2)(c) gives the NDA powers to make grants or loans in support of local communities. I put it to the Minister that a sub-paragraph should be added to Clause 9(1) emphasising the importance of protecting the social and economic life of local communities.

In setting up the two sites, not least that at Dounreay, their impact on the economic and social lives of local communities was certainly considered. It was thought desirable to locate the sites as far as possible from concentrations of population, with massive impact on the area. That was all considered a great deal-no doubt by the government led by the noble Earl's grandfather, whom he mentioned. At this time, that should be made explicit again. The Minister has made explicit the Government's concerns about Cumbria in the Sellafield context; similarly, he could make explicit their concerns about the other areas, not least Dounreay, the biggest UKAEA site.

My final point relates to Clause 10(2)(g), which empowers the NDA to delegate the maintenance of a pension scheme to the UKAEA. That is a sensible, desirable proposal. Is it possible to go a little further by indicating that, although it is not provided in the Bill, it is the Government's wish that the NDA consider delegating the management of its pension scheme, or the scheme that it is empowered to create, to the office in Thurso? That office has done extraordinarily good work for the authority and other public agencies. I wish to be assured that the Government would prefer that the Thurso office be given that opportunity to manage pension schemes for the NDA staff and any new arrangements that might replace the current UKAEA scheme.

I thank noble Lords for considering those issues, which, in the wider scheme of the debate, may have a more local focus than earlier contributions.

5.24 p.m.

Lord Monro of Langholm

My Lords, much in the Bill is good, but it has had such a cool reception from the House generally because it leaves out the important issues of policy relative to the mid-term supply of electricity to this country. The Nuclear Decommissioning Authority is a worthy project, and I look forward to seeing it work at my own nuclear power station-so to speak-at Chapelcross in the years ahead.

Chapelcross, which is two miles from my home-I have never been afraid of nuclear energy-was announced in 1955, since when it has worked tremendously efficiently. I have given it unstinting support in Parliament and, with the noble Lord, Lord Christopher, done everything possible to extend its life past what it was originally designed for. BNFL and its chairman have been successful in continuing for much longer than we ever thought possible. Chapelcross is reaching the end of its life and will be a candidate for the NDA. That will spread over many years and will provide some form of employment during that time. I wish to put on record the fine work and many achievements, including the exceptional safety standards of the workforce, in that plant over nearly 50 years. Production has been highly efficient, and the plant has had tremendous involvement in the community and played a full part in that area of the south-west of Scotland.

That licensed nuclear site employs 450 skilled workers, yet its days as a nuclear operation are to end. Do the Government not anticipate any further development on such a nuclear site? Are they throwing away the chance to have a nuclear plant in place by 2020, which we will need desperately, and, at the same time, retaining the excellent 450 workers who have done so much over such a long time?

The Minister said that resources would be provided at Sellafield to help regenerate the area when redundancies took place-the noble Lord, Lord Maclennan, mentioned that also. Does that apply also to other Magnox plants due for decommissioning in the not-too-distant future?

The Government's White Paper and their presumed energy policy was a disappointment, with most of the policies sitting on fences that were crumbling underneath them. Inevitably, in 20 years' time, when nuclear production is almost finished, we shall be short of power. In autumn, I was in the United States during the two crises. The first spread from Canada to New York and blacked out the whole area, and shortly afterwards, in Maryland, a hurricane, which I thought was no more than a good gale, put the electricity supply out of action for eight days. My relatives and I sat in the dark, without air-conditioning, light or refrigeration for eight days while they tried to sort out the electricity supply problem. If that can happen in a high-tech country such as the United States, particularly on the eastern seaboard, what on earth could happen here? We do not seem to be planning for what could happen in the years ahead.

Why is it so important? The Government seem to be afraid of nuclear power and of their own Members of Parliament who dislike it. We are throwing away an asset, with wonderful manpower, tremendous technology and experience. I hope that the Government will reconsider their position on nuclear power and providing more of it by 2020.

In October 1996, I initiated a debate in another place on wind farms and telecommunication towers. Telecommunication towers have continued to develop and are located on almost every area of high ground in the United Kingdom. The practice has been a disgrace since the start; planning was far too liberal and impossible to understand. You cannot put a flagpole with a Union Jack at the end of your garden, but you can put a tower on top of a hill and nobody could care less. Years ago, we talked about the march of the conifers that was destroying our countryside. Now we talk about the march of the turbines. We really must consider whether we are going to put up with all these wind farms, and at the same time do away with nuclear power. We can develop wave power, which is unlikely to be significant, and tidal power, which was considered earlier on in terms of the Solway barrage and the Morecombe barrage. They proved to be impracticable because we do not have as big a standard tide as in northern France. I would like to see more development of hydropower.

I find it such a paradox that the Minister is developing a new common agricultural policy, decoupling production grants and doing everything to improve the environment and the beauty of the countryside, but his colleagues with responsibility for energy are all set to dot wind farms all over the countryside, ruining what he is trying to improve. That is quite ridiculous, especially when we look at the answer to a Question that the noble Lord, Lord Lea, asked the other day. The Minister said that 10,000 to 15,000 towers, all 250 feet high-which is taller than Big Ben-must be dotted about the United Kingdom in order to provide an amount of electricity equal to that which we will lose by 2020. We need 160 square miles of the United Kingdom for that, which is a huge area. Yet we do not seem to care about what we are doing to the beauty of our country by putting up these wind farms, which produce such a minimal amount of power.

Wind power is inherently unreliable-we are talking about 30 per cent efficiency. The noble Lord, Lord Christopher, told us that efficiency in Denmark was only 25 per cent. I have been to Denmark and seen the wind farms and I am horrified. I have been to Wales, where they are worse. In England, they are disastrous. Now we are ruining Scotland with pylons here there and everywhere. It is particularly infuriating, when all this is saving not one item of the fossil fuel that we will need in 2020 to provide electricity for this country. We have gained nothing on carbon emissions, yet destroyed something irreplaceable in our islands.

The Government seem to have a policy of wind farms at any price. Inquiries come and go. The Government approve every application that is turned down by the planning committee. If planning committees do not like a proposal and there is a deemed refusal for a large wind farm, the Government call it in, give permission and produce a huge subsidy to please the applicant. There was an application for a wind farm in the middle of the Solway Firth, which divides Scotland and England. The Scottish Office called it in and gave approval. There was no inquiry. That is why the nation is getting so fed up with the attitude of the Government, who are steamrollering—if that is the right word—wind farms all over the United Kingdom despite complaints.

Every day in the press there are letters—in the Scotsman and the Glasgow Herald—complaining about wind farms that are developing in Scotland all over the place from the Dornock Firth, which the noble Lord, Lord Maclennan, knows well, and Banff, to my own home of Langholm. Wind farms are going up everywhere and applications are coming in in droves. The towers are all 250 to 300 feet high. One begins to wonder whether we will be decommissioning wind farms in the distant future, never mind decommissioning nuclear plants.

I cannot understand why the Government are so hell-bent. They are keen on national parks, CAP reform and grants for the environment, but ruin all that by putting 250 foot towers here, there and everywhere. Noble Lords should look at the size of Big Ben and think about what 10,000 of those are going to look like dotted about the United Kingdom—or 15,000 if the Minister is correct.

Will the Government think again about what they are doing to our environment? We are not gaining a thing. We are not gaining any green gases from this policy. The whole thing has got out of hand. The previous Minister seemed to be so enthusiastic about wind farms that he could not stop promoting them here, there and everywhere. Let us stop that and think again about our energy policy.

5.35 p.m.

Baroness Miller of Chilthorne Domer

My Lords, this has been a very interesting debate. One thing is quite clear: the Government must make a decision on whether nuclear power will have any role in the future energy policy for this country. That point was made clearly by my noble friend Lord Ezra at the beginning of this debate and was made by nearly every noble Lord, whether pro-nuclear or not. It is beyond doubt that there is an energy gap that must be filled one way or another. If nuclear generation is to be contemplated, we must see the costs up front. We cannot afford to live with the myth of cheap power only to pick up an annual bill that runs into billions of pounds to deal with the waste.

If we are not to have nuclear generation, the Government must say so. Until the Government make quite clear what the future is and state their decision, renewable energy generation will never receive the investment—or, having heard the tone of some of the debate this afternoon, the serious consideration—that it deserves, or the serious impetus that it needs to fill that energy gap.

The Bill is in two parts. The first part deals with the legacy from the past and the second looks to the future. I agree with noble Lords that we should concentrate on what is left out of the second part rather than what is included. Several noble Lords referred to their disappointment about various parts that are left out of the Bill, whether combined heat and power plants or other forms of renewables.

I shall start with the legacy from the past in the first part of the Bill. We should welcome the Government's commitment to grasp the difficult issue of the nuclear waste legacy. Indeed, I believe that is quite praiseworthy, because it is usually politically expedient to consider the short term at the expense of the long term. That is what has happened as regards nuclear waste over many years.

Although I heard the noble Lord, Lord Jenkin of Roding, comment that the Bill kicks the issue into the long grass and that the Government want to kick it on further, I do not believe that that is the intention of the Bill. Clearly, it is not my job to defend what the Government intend, but I am happy that they intend to address the issue with some vigour.

There are a number of drivers in this, not least the decommissioning of the Magnox and the complexity of the sites. I live near Hinkley, with which I am quite familiar, where there is a mixed-site use. It has been difficult to deal with the complexity of waste issues with all the various components, including water, sludge, used fuel rods and so forth. There is also the matter of the transportation of various kinds of waste once a decision has been made about where it is to be stored. We cannot continue with the situation that we have, for example, at Hinkley where large amounts of waste are stored with no planning permission nor any long-term plan. The authorities in charge have a difficult job to do when there is no framework against which to do it. I therefore welcome the first part of the Bill.

When nuclear power started out, I believe that it was hailed as clean and so cheap as to be almost free. In reality, it has turned out to be the opposite. Today, we have heard comments that the costs of initially building the plants were cheap. Of course, when compared to the cost of decommissioning and dealing with waste, it certainly was cheap.

I do not believe that the public have been clearly presented with the costs of decommissioning and the clean up. Today, we have heard comments to the effect that it will cost some £50 billion. In Defining the Legacy, the Government are very helpful in the graphs: on page 19 costs are outlined until 2160—that is, not just for our children or our grandchildren's lifetimes, but our great-grandchildren's lifetimes. For 40 years of electricity production, we are now stuck with waste that is difficult and dangerous and for which we must find safe storage. The noble Earl, Lord Atlee, referred very well to some of the issues as regards finding a site where storage might be possible. If my maths is correct—it is quite difficult when the sum is £45 billion, with all those noughts—it costs about £764 for each person in the United Kingdom, which equates to at least £1,507 per household. I have taken only the basic costs.

While the Government are very nice to propose in their new Bill to give £250 per baby born, when the general public work out that the clean up of nuclear waste will cost about £700 per person, they will question whether there is a future for the nuclear industry. I am in no doubt that this money must be spent on the clean up. No one should consider suggesting constructing more nuclear fission plants until we understand whether it is truly economic when so many of the costs are loaded on to the end part of the process.

That is by no means all of the public money that is being spent on the clean up. There are other hidden costs not included in the graph to which I referred. For example, the deal in June 2003, between British Energy-a private company-and BNFL, which restructured the fuel contract effectively transferring a further £230 million to be met by the public purse. We cannot say that dealing with waste will be cheap or easy.

I should like to highlight the point made by the noble Lord, Lord Beaumont, about what exactly the Government mean by nuclear waste. He raised the issue of separated plutonium-to which I am sure that we shall want to return in Committee-and questioned whether it is to be dealt with as waste or whether some of it could be regarded as fuel, which would give a different feeling about whether there would be new nuclear build in future. One of the main arguments against nuclear has always been economic; that has not changed. We are just now picking up the true bill.

I turn now to the other part of the Energy Bill, which deals in a limited and disappointing way with the important issue of renewable energy. Noble Lords today have tended to imply that wind power is the only form of renewable energy that needs consideration. That may be partly because the second part of the Bill deals with offshore wind farms. Therefore, although a great number of the comments about onshore wind farms are important and need to be considered, they do not need to be so much of a consideration in this part of the Bill.

However, what I should really like the Minister to comment on is how much emphasis the Government place on tidal and wave power projects when they talk about power from offshore sources. For example, the Severn Estuary boasts the fourth largest tidal ebb and flow in the world. That is a tremendous resource. I am aware of several experiments presently under way such as those off the coast at Swansea, Lynton and Lynmouth, which could lead to some exciting innovations. When noble Lords talk about developing technologies for the future, it is important to think of innovation in those kinds of areas. We do not have to look back to the nuclear industry when considering what might be done in the future. The experiments I have just described, once they have been concluded, deserve to be well resourced.

There are many more productive ways of addressing the issues around climate change, for example, than simply emissions trading. At the start of the debate the noble Lord, Lord Whitty, said that we could be a world leader, pointing the way for others. I believe that in the new technologies surrounding wind and wave power, we should aim to do exactly that. So I am disappointed that the renewables part of the Bill is so restricted.

Offshore sources of power are rightly attractive For example, tidal power is constant and reliable. Noble Lords have made much of the fact that the wind may or may not blow, and solar power can be criticised because the sun may or may not shine. However, solar power sources continue to operate even when the sun does not appear to be shining through the clouds. But tidal power certainly is constant and is a source of energy on which we should concentrate far more.

I am disappointed that this part of the Bill does not encourage communities and individual householders to think much more about the production of renewable energy. One of the difficulties in this area is that communities will readily object to wind turbines unless they are closely linked to their community, as is the case in Swaffham in Norfolk, where the town itself benefits from the turbine it has built. I think that the Government are aware of other good examples, such as those in Leicester and Woking. More emphasis needs to be placed on what communities can do for themselves and the benefits they can derive from their efforts.

I turn to individual households and combined heat and power micro units. It is very disappointing that the Bill makes no mention of these. By the end of 2004, such units will be available for individuals to buy and use within their own households. As they produce heat, electricity will be generated for free. However, if they produce any extra electricity, then the mechanism to send that surplus back to the grid is not in place. No guidance has been produced for how to have such a meter installed and there is really no incentive to convert to that system. This is the kind of issue to which 1 want to return at greater length.

The Bill should set a framework within which connections of that kind can be made in a straightforward manner. It should also ensure that all possible assistance is given to individuals to enable them to help themselves, whether with small wind units on their roofs or solar-powered combined heat and power units. They should be able to access, if you like, a one-stop energy shop. We do not see an imaginative approach of that kind taken in this Bill.

Finally, I am worried that the renewable energy zones at sea have been produced by the Government in the absence of a marine Act. The marine environment still does not benefit from any kind of protective planning framework-it is an entirely unprotected zone. Indeed, I do not think that the Bill complies with the spirit of the Environment Protection Act 1990 which requires that the environment should be protected. The marine environment should be no exception. We shall want to raise several issues around the use of marine areas.

So while I welcome the Bill because it provides an opportunity for discussion, in particular around what more we could do about renewable sources of energy, I believe that we will have to spend quite some time- and, may I say, energy-in Committee on a whole range of improvements.

5.49 p.m.

Baroness Byford

My Lords, before I wind up at the end of this excellent debate on Second Reading, perhaps I may begin by congratulating my noble friend Lady Miller of Hendon on her excellent response to the Minister's presentation of the Bill. My noble friend pointed out that she has not had the pleasure of working opposite the noble Lord, Lord Whitty, while taking a Bill through the House. I think that this will be my seventh occasion working opposite him-so we have a long history. I assure him that she is tenacious and I know that she will prove a formidable opponent.

I promise the Minister that there are things in the Bill that we on this side support and are pleased to see. But as other noble Lords around the Chamber have reflected, there is much that is missing from the Bill. It has received a cool reception; I think that most people have acknowledged that there is some good in it, but that there is a lot more to be done in Committee.

My noble friend highlighted two issues that I want to mention at this stage. One is the position of the reversal of the burden of proof-something I raise every time we discuss a Bill, as the noble Lord will know. The other is the huge, undefined Henry VIII powers. In paragraph 4 of the second report of the Delegated Powers and Regulatory Reform Committee, the committee acknowledges that there are Henry VIII powers in the Bill but says that it considers them to be appropriate. But I suspect that we shall need to look at this in greater detail in Committee.

These powers do not appear in the Bill just once-they are in Clauses 24, 32, 72, 142 and 155. They are in paragraphs 5(4) and 6(5) of Schedule 7, paragraph 8(7) of Schedule 10, paragraph 21 of Schedule 19, paragraphs 32 and 45 of Schedule 20 and paragraph 14 of Schedule 22. So it is not just an isolated incident.

We are facing a rising demand for electricity and steadily lessening production capacity. Last December's peak demand of 54,800 megawatts was satisfied from a notional capacity of 65,000 megawatts. Already that capacity has fallen below 60,000. Some 32 per cent is generated from coal and 23 per cent from nuclear power. By 2016, it is possible that there will be no coal-fired stations left, leading to a capacity shortfall of some 20,000 megawatts. Just four years later, there will be only one nuclear plant in operation, yielding a further shortfall of some 10,000 megawatts. In other words, by 2020 half of our current electricity generation facility will have gone.

To make matters still worse, 90 per cent of the gas-powered generation will have to be supplied from overseas-some 21,000 megawatts of capacity. Several noble Lords have mentioned their fear about future security of supply.

Targets have already been set to produce 10 per cent of our energy requirement from renewables by 2010. On 2nd December, a further firm target of 15.4 per cent by 2016 was announced by the Government. They set the targets and the electricity generators pay the fines for not reaching them.

Achievement figures are always months behind the calendar, but the current figure of 3 per cent from renewables seems generally accepted. Will the Minister list for us the projects which are going to raise that level to 10 per cent in six years? Will he specifically mention the ones the Government had in mind when they replied to the Commons Science and Technology Committee with an allusion to, renewables projects now off the drawing board and into the planning system"? Will the Minister also state how much energy each will deliver by 2010 as opposed to their rated capacity?

We use petrol and diesel for transport; we use solar cells, diesel, coal and paraffin for heat and power; but, overwhelmingly, we use electricity-for light, for heat, for power and, increasingly, for transport. Tacitly, the Bill recognises that and would in my view be better entitled the electricity generating Bill, although others have topped my interpretation of this.

The Bill contains nothing about demand reduction as one strand of policy to meet the anticipated shortfall. It contains nothing about the possibility of nuclear new build. It contains nothing about the use of waste materials to generate heat and power, and it is also silent on measures to ensure that when one part of a development chain fails the remaining part will be indemnified against loss. Those farmers who sought to make a contribution to the use of renewables by growing miscanthus and willow for the ARBRE project are unlikely to do so in future, because the project failed. The Government should legislate so that never again can a foreign company strip the assets from a renewable generation project.

It is essential and vital that the clean-up of our nuclear industry is done well, and we welcome that part of the Bill. Our knowledge has grown over the years, and the new plant is designed with decommissioning in mind. The early versions were not so prescient, and the problems that they present are many and varied, starting with the alarming fact of inadequate drawings and site plans.

As other noble Lords have said, the NDA will have to hit the ground running in April 2005. It is intriguing to speculate why the Government have chosen to start the legislative procedure in the Lords. I hope that the Minister will answer that question. By doing so, they have reduced the time available for setting up the NDA until after the Second Reading in another place. My noble friends Lord Jenkin and Lady O'Cathain made that point. It is also intriguing to surmise-and no doubt we shall find out in Committee-how the relationship with Scotland will be handled. It would appear that there will have to be a bridge between devolved and central responsibilities.

I am particularly concerned about the need to manage an incipient skills crisis, which is something to which many noble Lords referred. School children are repudiating science in favour of media studies and psychology. Undergraduates and postgraduates are no longer opting for nuclear specialisation. Operating those plants and future plants demands different skills from decommissioning them. Building them is yet another branch of the art. If we do not address the issue, what will we do if, in 10 years' time, the industry is so run down that we cannot attract sufficient staff to run those plants still in operation, never mind destroy those that are out of date?

I turn to specific issues that I should like to highlight and which have been raised around the Chamber. The noble Lord, Lord Ezra, rightly referred to the Bill as the Energy (Miscellaneous Provisions) Bill, which is better than the term that I used. The Government have wasted an opportunity, as many noble Lords have suggested. My noble friend Lord Dixon-Smith said that he felt that the Bill was a statement of aspiration and a one-sided look at energy needs, not including nuclear nor dealing with other renewables in total. Too much emphasis, as the Minister will have gathered, has been placed on wind-farm production. The noble Lord, Lord Christopher, challenged the figures that the Government are using and predicted that the outputs, even then, will not be sufficient. My noble friend Lady Miller of Hendon said that not including heat and power was a miss for the Bill.

There was a disgraceful situation at the opening of this Second Reading, which was unlike the noble Lord, Lord Whitty, the Minister, who is normally always one step ahead. In his opening remarks, he said that the Government would bring forward an amendment to the Bill, even before my noble friend Lady Miller of Hendon had the chance to respond. We find that totally unsatisfactory. Those noble Lords who have worked on Bills with myself and the noble Lord, Lord Whitty, will know that it is not a new phenomenon. For example, the whole question of fluoridation did not appear in the original Water Bill and had to be added at the end. Those who attended debates on the Countryside and Rights of Way Bill will remember that the fourth section-because it was actually four Bills in one Bill-on areas of outstanding natural beauty was not even published until after the Second Reading in our House, having already been debated in another place. The Government's performance is questionable at best. If one was being cynical, one would say it is absolutely incompetent.

Several noble Lords referred to national security and the safety of supplies. The charge was led by my noble friend Lady Miller, but concerns have been echoed around the Chamber by the noble Lords, Lord Beaumont, Lord Bridges, Lord Christopher and Lord Lea, and by my noble friends Lord Dixon-Smith, Lady O'Cathain and Lord Attlee, to name but a few. The Minister can be in no doubt about the feelings expressed in the Chamber today.

Is the Minister satisfied that, if the Bill goes through as it stands, there will be security of safe supplies in the future and a low risk of acts of terrorism? I do not expect him to answer at this stage my question in regard to terrorism, but it is an issue of huge concern. Certainly ensuring a secure, constant and total supply of power is important.

Several of my noble friends referred to wind farms and I wish to ask the Minister three questions about them. First, by the very nature of the expression, several offshore wind farms will be built in the sea. Will the fishing fleet be banned from such areas? If so, how far from them will the ban extend? Or have the Government not even considered whether there might be a problem? Secondly, the noble Lord, Lord Bridges, referred to wind farms being built on the Continental Shelf. Is EU permission required for that, or can the Government press ahead with it straightaway? Thirdly, as regards navigation rights-a matter touched on by my noble friend Lady Miller-will the restrictions on them run contra to human rights? Do those rights overlap?

As regards wind farms and SSSIs, an issue raised by the noble Lord, Lord Bridges, are the Government concerned that there may well be conflicting circumstances under which, on the one hand, they are trying to preserve, conserve and encourage wildlife in the countryside and, on the other hand, they may well be driving wildlife away from particular areas?

I turn now to yesterday's pre-Budget speech. The Minister will no doubt be aware that the Chancellor declined to increase the subsidy on bioethanol. It had been hoped that such a measure would appear in the Statement. Its absence leaves the industry in limbo. The question therefore arises whether the Government are trying to direct money in one direction-that is, all into wind farms-and are quite happy to accept that other renewables will be unable to survive if they are not pump-primed to get them off the ground and to become viable businesses.

I know that the noble Lord, Lord Palmer, is disappointed that he is unable to take part in the debate. I shall not repeat what my noble friend Lord Monro said about wind farms except to say, "Hear! Hear! Hear!". Many people are very concerned about the growing profusion of wind farms. They are not small structures; they are huge. Certainly my mail bag on this issue is increasing. People are asking whether there is nothing we can do to stop this. Ultimately, these structures will produce only a minimum amount of power and, as other noble Lords have said, will do nothing in regard to carbon emissions.

I turn, finally, to the question of nuclear power. Noble Lords around the House, with the exception of the noble Lord, Lord Beaumont of Whitley, recognise that there needs to be nuclear power in the future. My noble friend Lady Miller said that the Government must take the lead on new nuclear build. It is impossible for business to do so.

Baroness Miller of Chilthorne Domer

My Lords, because there may be confusion over the two Lady Millers, I wish to clarify that I did not at all agree with the development of nuclear power in the future.

Baroness Byford

My Lords, I am sorry. I tried to shorten my speech and referred to my noble friend. I am, of course, friends with the noble Baroness, Lady Miller of Chilthorne Domer, but on this occasion I was referring to my noble friend Lady Miller of Hendon.

The noble Lord, Lord Lea of Crondall, suggested that nuclear should be considered as a renewable source of energy. Many noble Lords on these Benches agree with him totally.

The other point I particularly wish to raise concerns skills and research and development. If the noble Lord, Lord Whitty, has not taken that on board by now, the contribution by my noble friend Lord Gray highlighted that extremely well. My noble friend Lord Jenkin of Roding made a very full speech which I shall not try to top as it speaks for itself. My noble friend really set the Government a challenge.

I say to the noble Lord, Lord Whitty, that concerns are not being expressed just by noble Lords. I do not think that I have ever experienced so much lobbying for the Second Reading of a Bill. Some 10 or 12 organisations lobbied me on their concerns about, or hopes for, the Bill. I wish to quote from the commentary on the energy White Paper on the part of the Institution of Civil Engineers, which states clearly, under the heading, Four Goals for Energy Policy, These goals cannot all be met at the same time-the most critical goal is security of supply, because it is a pre-requisite to all others". The Institution of Civil Engineers further commented:

Security is best achieved by ensuring that we have a wide portfolio of different fuel sources and by maintaining sufficient reserve stocks and facilities". All noble Lords agree with that.

As I say, the Bill contains good measures but certain measures are omitted and it contains other measures that we look forward to debating at great length with the Minister and his colleagues.

6.7 p.m.

Lord Whitty

My Lords, we have had a wide-ranging debate. As noble Lords have remarked, much of the debate concerned what is not in the Bill rather than what is in it. Much of the debate has concerned very much broader aspects of energy policy than would be contained in any Bill, as they are not by definition legislative matters. Much of energy policy depends on other instruments available to government and, indeed, the private sector, and are matters that one would not expect to see in the Bill. I am happy to respond to many of those broader matters but I hope that in Committee we shall focus on what is actually in the Bill.

First, I wish to mention a few procedural issues. The noble Lord, Lord Jenkin, asked why the Bill was starting its passage in this House. That is the quickest possible way to get the Bill on the statute book given the logjam to which it would doubtless be subjected were it to start its passage in the Commons and reach this House very late in the Session. Usually noble Lords welcome Bills starting their passage in this House, particularly ones on which there is a fair amount of consensus regarding their necessity-that is, the necessity for the measures that they contain as opposed to what they do not contain.

Baroness Byford

My Lords, I hope that the noble Lord can clarify a matter for me. I understood that the relevant provisions could not be taken forward until the Bill had received a Second Reading in another place. Is the noble Lord saying that those provisions cannot be taken forward until the Bill has received a Second Reading in this House? That is where the misunderstanding arises. I think that I am right and the Minister is not.

Lord Whitty

My Lords, we are looking at the end point of the Bill. The Bill is likely to be completed sooner by starting its passage in the Lords than if it had started its passage in the Commons. If it had started its passage in the Commons, it would have had to compete with all the other legislation starting in the Commons. Usually this House likes to see a fair chunk of the legislation starting its passage in the Lords. This is a rapid course to take for getting the Bill on the statute book.

It has also been argued that I should not be presenting the Bill but that my noble friend Lord Sainsbury should. The concept of joined-up government seems largely to have escaped those who put forward that argument. The energy White Paper was the product of the whole of the Government. Many departments were involved: my own department, the Department of Trade and Industry, the ODPM in particular and, indeed, the devolved administrations. That forms part of delivering the energy White Paper.

Earl Attlee

My Lords, will the noble Lord, Lord Sainsbury, take part in the Bill?

Lord Whitty

My Lords, he will certainly not be the lead Minister on the Bill. My noble friend Lord Davies of Oldham covers DTI matters and will assist me and will possibly take the lead at various points during the course of the Bill's passage, so the DTI is well represented. As my noble friend Lord Lea said, there has been a division of responsibility for energy matters between the DTI and various manifestations of the department for the environment for a very long time, under successive governments.

Baroness Miller of Hendon

My Lords, will the Minister confirm that DTI Ministers will handle the Bill in the House of Commons?

Lord Whitty

My Lords, I think that that is probable, which indicates how flexible and joined-up the Government really are.

Noble Lords


Lord Whitty

My Lords, we of course have not yet taken a decision on that.

There are one or two other procedural matters. The noble Baroness referred to Henry VIII powers and the Delegated Powers and Regulatory Reform Committee. At a quick read, that committee has said that by and large the powers are appropriate, with one or two minor reservations.

The noble Baroness, Lady Miller, and others said that I should not have mentioned that amendments were coming. In effect, I was doing that as a courtesy to the House. She said, rightly in some respects, that fluoridation amendments on the then Water Bill came very late. Surely she would have been gratified had I indicated at Second Reading that such an amendment was likely. As we knew about the two amendment areas of offshore transmission and the north of Scotland problem-the noble Lord, Lord Gray, subsequently very much welcomed that-it seemed sensible to tell the House about them.

In any Bill that starts in the Lords, it is likely that there will be government amendments. The normal complaint is having government amendments right at the end of the Lords procedure when the Bill has already been through the Commons. With that I have some sympathy, but I do not have sympathy with the present complaint.

Baroness O'Cathain

My Lords, the point surely is that, when a Bill comes to the House, amendments should not be coming from either the Government or the Opposition until after Second Reading. The point that I made was that we actually had a draft Bill and that that really was not good enough. When Bills come to this House in the first place, they should be the best possible Bills with the latest government thinking. The Government should not tell us on the morning of Second Reading that amendments are coming.

Lord Whitty

My Lords, I doubt that a Bill of any size has been introduced in this House in the past few decades to which a government have not made some government amendments.

Noble Lords


Lord Whitty

All right, my Lords. The Government will take note of the objection and, henceforth, we might not mention at Second Reading what we know that we will propose for later stages. That does not seem very sensible or transparent government, but if that is what noble Lords want we will take it on board.

Lord Jenkin of Roding

My Lords, that was not the only complaint. There is also the complaint that the Government will publish the response to the Commons committee in a few days, just after our Second Reading, and the complaint that there have been two Statements today, one about BNFL and one made by Mr Timms in another place. To expect this House to debate a Bill on Second Reading while the Government continue to pour out documents, or indeed hold them back until next week or whenever it might be-that is the point: at which the House is being treated with less than respect.

Lord Whitty

My Lords, I really cannot agree with that. In a sense, it goes back to the question of whether we are discussing energy policy as a whole or what is in the Bill. There are other aspects of energy policy, some of which are related to the Bill, on which pronouncements are being made. The Select Committee in another place was dealing with a whole range of issues in relation to energy policy. We are replying to that Select Committee within the normal time scale.

Lord Jenkin of Roding

My Lords, we are talking about different Bills. I am talking about the pre-legislative scrutiny. Is that not the reply coming next week?

Lord Whitty

My Lords, I believe that it is. My point is that we are within the normal timetable of responding to that Select Committee in the Commons. The fact that the usual channels agreed to table this Second Reading slightly before that point is not particularly relevant. It is certainly not a discourtesy to this House. Other aspects of energy policy are clearly going on all the time.

Human rights issues were raised. On navigation rights and the reversal of proof, our legal advice would strongly be that both were appropriate. No doubt the noble Baroness will take her own advice and may return to the issues, but we are confident that we were correct in signing the compatibility issue.

I hope that that finishes the procedural points. Can we now go to the broad issue of energy policy that took up most of the debate, particularly the role or otherwise of nuclear power? The very large body of opinion from contributors here-not universal, but almost-wanted to see a role for nuclear power in the Bill and in the future of energy policy.

It is not appropriate to provide in legislation a commitment to nuclear build or build of any other kind. The policy has been set out in the White Paper. For many years, the cost and the potential of the various alternatives to carbon-based energy have been assessed. They were clearly assessed in the energy White Paper. I am not a visceral opponent of nuclear power. I used to work in the industry decades ago and I have a reasonable understanding of the technology, which has certain attractive elements. However, while nuclear power is clearly a nil or low-carbon technology and should be desirable on those grounds, it is not at this point a sustainable technology. It is not sustainable in economic terms. The life-cycle cost is considerably higher than many other alternative technologies, in spite of what some noble Lords have said about carbon saved. Nuclear energy is not sustainable either in the sense that we have not yet found a solution to the long-term disposal of high-grade nuclear material. The noble Earl, Lord Attlee, referred to that. Introducing procedures to deal with the immediate problems and the legacy waste may help to allay anxieties, but it does not solve the basic problem. Until we solve that problem, or at least see the way in which we are going to resolve it, nuclear energy is not as sustainable as other forms of alternative technology.

That is not to say, however, that the White Paper has excluded a possible role for nuclear power-it has not. It has kept the nuclear option open and it is reasonable for noble Lords to ask what we mean by "keeping the nuclear option open". Clearly, we need to monitor progress towards the development of a lower-carbon economy. In order to keep that option open, we need to retain, as the noble Lords, Lord Gray and Lord Jenkin, have said, the skills, the research and the training of personnel in nuclear technology. We are engaged in a number of programmes on that front, including EU and OECD programmes and the Forum for International Research, in which the UK plays a substantial role, as I am sure the noble Lord, Lord Jenkin, knows. One noble Lord mentioned Culham. We received £5 million for fission research as part of the sustainable energy economy initiative. We are, therefore, investing in research and skills for keeping that nuclear option open.

The issue for this Bill, as distinct from the White Paper more generally, is how we are dealing with the legacy waste and how we are dealing with certain aspects of delivery of renewables and of the regime that covers electricity and gas supply. I shall deal first with the issue of nuclear waste. I think that most people welcome the establishment of the NDA. It is important that we understand what its role is. The noble Lord, Lord Maclennan, asked what its relationship would be with the UKAEA and my noble friend Lord Christopher asked about its relationship with BNFL. We need to be clear about that. It is also important to recognise what the NDA will do. It is certainly not, as the noble Lord, Lord Beaumont, suggested, a vehicle for building new nuclear power stations. It will have the power to operate them only pending decommissioning, principally to cover the period of Magnox operation prior to their closures, but not to build and operate new power stations. The NDA could be given responsibility in the future for decommissioning any nuclear power stations at the end of the line, but not to set up and operate them.

The NDA's prime responsibility is the public sector liability, but in answer to the noble Lord, Lord Beaumont, once more, it can be given designated responsibility for dealing with private sector liabilities, but that does not mean that it will bear the cost of dealing with them. However, it is prudent for the Bill to cover that possibility in case it arises. As regards British Energy, the NDA may be asked to take on defined responsibilities for meeting obligations, which the Government intend to accept subject to state aid approval. It would be only in that context that it would deal with public sector sites. They would not be its central responsibility. It is part of the range of responsibilities of the NDA.

The noble Lords, Lord Jenkin and Lord Beaumont, asked about the consequences for disposal of waste and what kind of waste we were talking about. The NDA will be given responsibility for low-level waste at the only site currently existing, at Brigg. As I think the noble Earl, Lord Attlee, indicated, we are considering future arrangements for long-term management of intermediate level and high level radioactive waste and have established the Committee on Radioactive Waste Management to make recommendations on that whole area by 2006. As for the previous exchange between the noble Earl and myself on the matter, we are not rushing it, but we are taking a considerably shorter time than the half-life of the nuclear materials that I was pointing to. It is a very long-term decision and one that we need to take seriously.

The Bill sets out the functions and responsibilities of the NDA. It requires that the NDA should have particular regard to the need for safety, security and environmental protection in carrying out its functions. The noble Lord, Lord Jenkin, rightly pointed to the historic reputation for secrecy that the nuclear industry had. It is beginning to get over that. I hope that the noble Lord will welcome the provisions designed to ensure that the NDA operates openly and transparently and engages positively with its whole range of stakeholders.

My noble friend Lord Christopher, the noble Lord, Lord Ezra, and others asked about the relationship between the NDA and the other institutions. My noble friend was concerned that BNFL should not be disadvantaged by the introduction of competition by the NDA. The noble Lord, Lord Maclennan, raised a similar problem in relation to the UKAEA. I can assure him that the NDA will run fair and open competitions when and where it considers that it could increase the effectiveness of clean-up. However, initial agreements for managing site licensees will go to the existing operators, BNFL and UKAEA. The work that the UKAEA has done in his part of the world, in Dounreay, and in my part of the world, at Winfrith, and so on, indicates that the AEA has become an effective decommissioning body. Whether it will continue for all time in that capacity will obviously depend on its future performance. It would be possible for the NDA to remove the contractor in open competition. However, it appears that, in immediate terms, there is no disruption of the role of the AEA or indeed of BNFL.

The noble Lord, Lord Ezra, also asked about the costs. The cost of NDA activity specifically over the next 10 years was reckoned at about £15 billion to £20 billion.

The noble Lord, Lord Christopher, and subsequently the noble Lord, Lord Monro, and others raised the issue of communities that were dependent on the nuclear industry. I referred earlier specifically to west Cumbria, where there is a heavy dependence on the nuclear industry. However, that applies also to the north of Scotland and, as far as the noble Lord, Lord Monro, is concerned, to the economic area around Chapelcross. The Secretary of State has today made an announcement about west Cumbria.

A couple of issues were raised about the nuclear constabulary; the noble Baroness, Lady Miller of Hendon, asked a number of questions about it. The DTI has responsibility for security of the civil nuclear industry, and the constabulary is a major element of that. There are no plans to change its basic role. It will be separated from the UKAEA in that respect, but it will continue to police BNFL and URENCO civil-licensed plants. However, those companies will not have to meet the costs of the transitional arrangements as we move across to the new nuclear police force.

I hope that I have largely addressed the nuclear issues. We may return to them.

I found the other part of the broad debate a little more difficult. I think that there is a rational case for nuclear power; it is arguable. Some quite strong arguments about the sustainability at this point of nuclear power predominated in the White Paper, which is why we have not made a commitment to new nuclear power. However, the arguments against renewables, particularly against wind power, seemed to me over the top and irrational. Clearly, if we are to move to a low-carbon economy, we shall have to use some of that renewable technology. Wind power is the most immediate and, probably in the short to medium-term, the largest component of a renewable contribution.

There are some planning concerns. Personally, I am a great fan of wind farms. I believe that, contrary to the view of the noble Lord, Lord Monro, and others, in many parts of the countryside they enhance the landscape. That will not be true in all cases-even I acknowledge that-but they will be subject to substantial planning controls. Those conflicts are dealt with through the planning system. The Bill ensures only that the planning system operates efficiently. It brings into play parallel operations but does not deny anyone his right to go through the planning system and object to a particular application.

In any case, the main burden of the Bill and the main provision of wind farms will not be in the countryside; it will be offshore and, in many cases, beyond the horizon. In terms of visual impact, we are not talking about the majority of the wind-farm contribution being in areas where objections on aesthetic terms are likely to be raised. Of course, other concerns arise in that respect, including in relation to the marine environment. We are clear that such zones would be managed in an environmentally effective way. We shall not wish to avoid any of our marine environment responsibilities, either national or international, in that respect.

In the slightly longer term, tidal or wave power will also have a role to play. We are already a world leader in that technology. Surrounded as we are in Britain by water, we should be able to make a significant contribution to that as well as to wind-power technology. But wind power will play a part. Other noble Lords suggested barrages and so on. While we have not gone down that road at present, clearly all such renewable technologies need to be borne in mind. However, the economics must also be borne in mind. As we see them currently, the economics of the Severn Barrage and other barrages would not be appropriate.

A noble Lord asked for a list of the renewable projects that have gone forward thus far. I cannot provide a list immediately but 1.1 megawatts of renewable capacity are being given planning consent. Some of that is already under construction. As I said, the first large offshore wind farm was commissioned last month and the second is already under construction.

The noble Lord, Lord Ezra, in particular, and the noble Baroness, Lady Miller of Hendon, mentioned other contributions to lower carbon emissions, particularly CHP. They suggested that further measures in support of CHP should be appropriate in terms of the Bill. The Government intend to publish their strategy for the development of CHP by the end of March. Our commitment to achieving the target of 10 gigawatts by 2010 is an important part of our energy policy strategy. As indicated in the recent assessment by Cambridge Econometrics, we are short of that target at present and it appears that, without a further boost, the out-turn will be around 8.1 gigawatts. However, that is an area to which the Government wish to turn their attention in the strategy that we are developing on CHP.

The European Emissions Trading Scheme will also have an impact here, and I acknowledge the important role that micro-CHP could play in this area. Therefore, there are a number of other levers which the Government can pull in this respect, not the least of which takes us into the area of BETTA and the regulation. There are a number of ways in which BETTA can be expected to benefit both transmission and distribution-connected small generators. That is currently particularly the case in Scotland but it could be more general than that. It will include CHP and access to the wider market. It is important that that regulatory framework gives encouragement rather than what has, perhaps in the early stages of NETA, been a discouragement to CHP.

Moreover, I believe that the creation of a single market and a single regulatory framework covering Scotland as well as England and Wales will reduce the number of complexities so that small generators of all kinds may enter the system.

The noble Lord, Lord Ezra, also referred to coal-mine methane and to cleaner coal, both of which feature in our energy policy. He may have noted in the PBR yesterday reference to state aid to the coal-mine methane industry now being cleared.

There are big issues involved in energy policy but by and large they are unlikely to be legislative issues. I think that we shall probably reach broad agreement on the kind of legislation which is needed in those areas. There may be other issues which noble Lords will want to introduce but issues such as the security and diversity of supply will not be achieved through legislation. That is why they are not covered in the Bill. We believe that those are very important issues and are of growing importance, both in terms of our reliance on imports and the need to diversify our sources of supply for gas and oil. We need to provide a lot of domestically based renewable fuels, and so forth, with a remaining contribution from the coal industry.

Lord Jenkin of Roding

My Lords, I thank the Minister for giving way. I have the impression that he is moving to a close. I asked him about the renewable obligation certificate buy-out fund, which at present is £20 million short because of TXU. I hope that I shall receive an answer.

Lord Whitty

My Lords, perhaps I may return to that just before I finish. I shall give an answer. The point I was making is that both the security and diversity of supply are issues which are clearly part of our energy strategy. The fact that they are not explicitly in the Bill is not the relevant factor. The other aspect of security of supply is the vulnerability of our supply areas to unrest or terrorist activity. In respect of that, clearly most forms of energy are potentially vulnerable. Slightly contrary to the comments of my noble friend Lord Lea, a nuclear facility probably potentially would be the most lethal, were there to be a terrorist incident. However, all forms of energy are subject to that kind of disruption whether we refer to offshore wind farms, the pipeline through the Caucasus or gas supplies from Algeria. However, one has to say that already in Europe we obtain gas supplies from Russia and Algeria, which are normally regarded as highly volatile countries, and the supply has not been disrupted.

Another general point to mention is that of the margins on which we are operating. There have been exaggerated views of the margins on which the current national network operates. The noble Lord, Lord Bridges, suggested that it was as low as 10 per cent. I can reassure noble Lords that the generation plant margin for this winter is likely to be more than 20 per cent; in fact, 20.3 per cent, which is double the figure that he gave and which I have heard people outside this House give. It could rise higher than that if we find it necessary to bring further mothballed plant into service. That margin is as good as it has been for the past few decades and is sufficient to meet predicted demand in all but very exceptional circumstances or catastrophic technological failure. I shall not go further into the wider issues.

I return to the question raised by the noble Lord, Lord Jenkin, of the £20 million shortfall. I am happy to tell noble Lords that in the past few days the administrator of TXU has written to all the relevant suppliers asking them to submit claims for their losses arising out of that shortfall. It looks as if there will be an interim payment of between 35 and 40 pence in the pound with the prospect of more to come once TXU's affairs are fully settled. So, although clearly this is an unfortunate position, there will be recompense for those who missed out as a result of that. The context in which the noble Lord mentioned this point during my opening speech was that of whether we put in a special energy administrator in areas which are subject to competition. I have said that that is not the intention of the Bill as it stands. We are dealing with protected monopolies as network operators not in the generation part or any other competitive part of the supply system.

People complained that they had not had a debate about the energy White Paper. I think that we had quite a good one in many respects today. It leads us into subsequent stages of the Bill. I have no doubt that some of these wider issues will rear their heads again. I also hope that the specific proposals in the Bill, particularly those on dealing with the legacy of waste and the liabilities arising from that, will receive noble Lords' attention and will receive, at least broadly speaking, the support of all sides of the House.

On Question, Bill read a second time and committed to a Grand Committee.

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