Nuclear Decommissioning (Hansard, 7 December 2004)

HL Deb 07 December 2004 vol 667 cc735-6 735

§ 2.58 p.m.

§ Baroness Miller of Chilthorne Domer asked Her Majesty's Government:

§ What is their response to the decision of the European Union Commission to investigate the use of public subsidy to finance the Nuclear Decommissioning Authority.

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, the UK Government notified the European Commission last December of their detailed plans for taking forward nuclear clean-up. This will eventually involve putting new state resources into discharging nuclear liabilities incurred as a result of BNFL's commercial activities. We accept that this comes within the areas covered by EU state aid rules but we consider that it is compatible with EU rules under Article 87.3(c) of the EC Treaty.

§ Baroness Miller of Chilthorne Domer
My Lords, I thank the Minister for that reply. Does he accept that there are questions to be asked when the private sector can run an industry, walk away from the dirty legacy that it leaves, and yet still claim that it is an economic source of generation without having solved any of the waste issues? Will that not lead to confusion in the minds of taxpayers as to what are and are not economic sources of generation? Finally, as regards the Euratom loans which are to be given to allow new nuclear power station construction, it is proposed to raise the ceiling of such loans by £2 million. Is the Minister certain that this time a decommissioning and clean-up programme will be attached to them?

§ Lord Sainsbury of Turville
My Lords, these are past liabilities and the NDA is the proper mechanism for dealing with them. As regards future nuclear power stations, we must consider future liabilities and ensure that these are taken account of in any calculations of economic viability.

§ Lord Sheldon
My Lords, as the nuclear liability is estimated at £48 billion—a major public expenditure—what action does the Minister propose to take to ensure that the cost of the dismantling is taken fully into account at the time these plants are erected? What action does he suggest that we take for the immediate dismantling costs to be taken into account at the time of the erection of these plants?

§ Lord Sainsbury of Turville
My Lords, in this particular case the nuclear liabilities are covered by the nuclear liabilities investment portfolio, which I agree is an understatement. But it is about £3.5 billion and there will be something on top of that. As I said, this seems to be the appropriate way to deal with the par situation. As to other nuclear liabilities in other areas, it is extremely important that we have the best possible 736 procedures for clean-up and make the most speed that we can in doing that. As to the future, we must ensure that these calculations are made properly from the start and provided for in the finances of the businesses.

§ Earl Attlee
My Lords, does the Minister accept that a very considerable proportion of the liability costs was incurred as a result of the nuclear weapons programme rather than civil nuclear power?

§ Lord Sainsbury of Turville
My Lords, in this case we are dealing with BNFL. The ones dealing with defence policy are quite separate from this.

§ Lord Tebbit
My Lords, can the Minister remind both the noble Lord, Lord Sheldon, and the noble Baroness, Lady Miller, whether the power stations which gave rise to the nuclear waste and these problems were built by the public or the private sector?

§ Lord Sainsbury of Turville
My Lords, these are, of course, the commercial activities of BNFL. So, as I understand it, these would have been all built and incurred as the private sector. That is why the situation arises with the EU under state aid. If I am wrong about where they were incurred, I shall write to the noble Lord and place a copy of the letter in the Library.

§ Baroness Miller of Hendon
My Lords, does the Minister recall that not too long ago the Royal Academy of Engineering issued a document or a statement about the relative costs of different kinds of fuel. It said that nuclear was one of the cheapest, even taking into account all the costs that had been incurred before? Under those circumstances, are a couple of the questions that have been raised not really very relevant?

§ Lord Sainsbury of Turville
My Lords, as I indicated at the time, there are some considerable disagreements about liabilities and costs. It seems sensible that when we come to make those decisions we do have a good understanding of what the future liabilities will be.