HC Deb 01 March 2000 vol 345 cc25-46WH

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Dowd.]

9.30 am
Mr. David Rendel (Newbury)

Like other hon. Members, I have been up all night, so if I seem a little inarticulate, it is because I have not had much sleep.

I am delighted, Mr. Deputy Prime Minister—I am sorry, Mr. Deputy Speaker; that was not a good start.

Mr. Deputy Speaker

Order. I can see that the hon. Member is going to have some difficulty this morning. He really must not compromise me in that way.

Mr. Rendel

I apologise, Mr. Deputy Speaker. I shall do my best.

I am delighted to have secured this morning's debate. It is on a subject that has become very worrying in the light of recent Health and Safety Executive reports about data falsification by British Nuclear Fuels plc at its Sellafield reprocessing plant. Indeed, the issue has become even more pressing since I first requested this Adjournment debate, as the problems at BNFL have now forced the resignation of the chief executive.

On 1 December 1999, the Secretary of State for Defence announced his decision to award the contract to manage the Atomic Weapons Establishment at Aldermaston to AWE Management Ltd., a consortium that comprises Serco Defence Support, British Nuclear Fuels plc and Lockheed Martin Corporation. On 1 April 2000, the new contractors will take over from Hunting-BRAE, the consortium that has run the site since 1993. The new contract is worth £2.2 billion and it is due to run for 10 years. The consortium will also manage the nuclear warhead assembly plant at Burghfield on behalf of the Ministry of Defence.

That announcement raised several questions in my mind, not least what grounds there could possibly be for awarding the contract to a consortium that included BNFL, a company not noted for the excellence of its record on nuclear safety. Was that decision made on the basis that it would save money, or was it made because Hunting-BRAE's record was felt to be inadequate? Hunting-BRAE was convicted as recently as 13 December 1999 of illegally discharging radioactive tritium from AWE into a stream that passes through the village of Aldermaston and then feeds into the river Thames. The company had previously been fined for a plutonium leak that contaminated two people who worked at the site.

It would be appalling if the Government were to admit that the contractor had been chosen purely on cost. I hope that no Government, of whatever hue, would put cost ahead of safety at such a sensitive site. If the Government's grounds for choosing the new contractor were health and safety, however, as I hope to demonstrate this morning, there are good reasons for thinking that an equally appalling mistake has been made, even when all the concerns about HuntingBRAE's safety record are taken into account.

As time has gone on, and as more details have emerged about the scandal of the fuel rods at Sellafield, I have become increasingly worried about what the reasons behind that decision might be. At its Sellafield site in Cumbria, BNFL manufacturers mix uranium-plutonium oxide fuel pellets—MOX pellets—combining them with other components to make complete fuel assemblies for use in nuclear reactors. The fuel assemblies are then supplied to countries, including Japan, Switzerland and Germany.

Problems arose, however, in August 1999, when BNFL discovered that its technicians were falsifying data measuring the size of the MOX fuel pellets. The Health and Safety Executive called in its nuclear installations inspectorate to investigate. Although the NH report stressed that the matter was a contractual issue between BNFL and its customer—in this case, a Japanese company—it was clear that what had happened was a deliberate breach of operating procedures at Sellafield. BNFL's initial investigation was found by the NII to be too narrow because it had been rushed. It had also assumed that the problem of falsifying data was confined to one shift, which we now know not to be true. The NII concluded that, although various individuals were at fault, there had also been a systematic failure that could not have occurred had there been a proper safety culture within the plant. Although there was no excuse for process workers deliberately falsifying data to avoid a tedious job, management allowed that to happen and therefore bore a large measure of responsibility.

A second report, requested by the chief inspector of nuclear installations, found that there had been deterioration in safety performance at Sellafield and once again expressed concerns about control and supervision at the plant. Three significant issues needed to be addressed. First, there was a lack of a high-quality safety management system across the site, a problem compounded by "overly complex management structure". Secondly, insufficient resources were available to implement even the existing safety management system. Thirdly, the report referred to the lack of an independent inspection, auditing and review system within BNFL.

The report concluded: Without a vigorous independent inspection, auditing and review system, the Health and Safety Executive does not see how BNFL can make acceptable and timely progress in delivering a high-quality safety management system. If that is true of BNFL at Sellafield, why should anyone believe that such a company will have got its act together in time to take over the management of AWE on 1 April and to deliver a high-quality safety management system there?

It is clear from both the reports that the BNFL management allowed a catalogue of errors to occur at Sellafield and that safety fell well below the standard that NII requires of a nuclear installation. Since the first press stories, five process workers at Sellafield have been sacked, and this week we have heard that the company's chief executive, John Taylor, is also expected to resign. On Monday, The Independent reported claims that the chairman of BNFL, Hugh Collum, had alerted Ministers to his concerns about the company last October, well before the Government announced the decision on the new contract. The investment bank advising the Government on the public-private partnership for BNFL apparently expressed similar concerns. The Government knew that there were significant problems with BNFL well in advance of their announcement of 1 December, so if the contract goes wrong, they must share a large part of the blame.

The Government should also have been aware that Lockheed Martin, another partner in the AWE Management Ltd. consortium, has a safety failure record that—believe it or not—rivals that of BNFL. I understand that the company has managed four sites with a nuclear role on behalf of the United States Department of Energy and that one of them is now under a new contractor. The sites—a plant known as Y12, the Oak Ridge national laboratory, the Idaho national engineering and environmental laboratory and the Sandia national laboratory—have all been subject to safety failures similar to those that occurred at BNFL's Sellafield plant.

I could hardly believe that an Office of Oversight existed when I read about it, but there is something called that in America. Its name does not mean that it has missed something out by mistake, but merely that it oversees other people. The Office of Oversight, working on behalf of the United States Department of Energy, reported that workplace safety and environmental protection at the Idaho plant had deteriorated over four years. In October 1997, two people operating the reactor at the advanced test reactor critical facility were found to have falsified records—that rings a bell—to show that the safety systems had been tested as required when they had not been. The safety systems are supposed to shut down the reactor automatically in an emergency. In the previous month, six workers were contaminated because of the violation of nuclear safety rules. At Oak Ridge, the Office of Oversight found that the rate and seriousness of reportable accidents and incidents was increasing. On 5 November 1999, enriched uranium operations at the Y-12 plant were halted after a practice run failed to demonstrate that the plant was ready for the safe restart of enriched uranium operations.

Lockheed Martin's safety record worries me and my constituents sick, not least because the problems identified by the Office of Oversight closely mirror BNFL's failings. The two companies are remarkably similar. Many hon. Members will have heard the "File on Four" programme about the failures and will be equally worried. It is of particular concern that the Secretary of State, in spite of the findings, decided to award the contract to a consortium that includes not just one but both those companies.

When The Independent published the story about MOX fuel, I immediately wrote to the Minister urging him to reconsider the decision. I have not received a response. During last Monday's Defence questions, in response to the hon. Member for Reading, West (Mr. Salter), who is also concerned about the future of Aldermaston and Burghfield—I am glad to see him here today—the Secretary of State said that the Government have instructed the Chief of Defence Procurement to examine the terms and conditions of the new contract to ensure the preeminence of public health and environmental safety as they affect the workers and the facility, and also the general public.—[Official Report, 21st February 2000; Vol. 344, c. 1223.] He went on to say that the NII can impose high safety standards before granting the licence to the new contractors. Frankly, that is not good enough. Indeed, it is of little comfort to my constituents, many of whom are worried about what is going on at Aldermaston under the NII-regulated regime.

The safety records of BNFL and Lockheed Martin speak for themselves and must not be dismissed lightly. The Minister cannot pass the buck by insisting that the Chief of Defence Procurement is responsible and that the matter has passed from his hands.

Even if the safety considerations, hugely important though they are, do not persuade the Minister to cancel the newly signed contract and re-tender it, there is another reason why re-tendering will be necessary. To survive as a company, BNFL needs customers, but its customers know that it has grossly misled them over the sensitive matter of the honest and accurate description of fuel rods. If you, Mr. Deputy Speaker, were the manager of a Japanese, Swiss or German power company, would you dare to purchase fuel rods from a company that had misled you? If you were brave or foolhardy—enough to do so, would you not expect the citizens of your country to rise in protest at such an appalling decision? It is inconceivable that any of BNFL's customers will be willing—or will be allowed by citizens of their countries—to continue to trade with a company that has shown itself to be irresponsible in the handling of highly sensitive materials.

Without customers, BNFL cannot survive. Questions hang over the future of Sellafield. It is reported that other countries are calling on us to shut it down. If BNFL fails to survive, where does that leave the new contract? It might be possible—technically at least—for the consortium to continue as the management of AWE with Lockheed Martin, an American company, in sole control of the United Kingdom's principal nuclear weapons establishment. But even if the contract terms make that a theoretical possibility, and I do not know exactly what is in the contract, I cannot believe that it would be acceptable to any British Government. The only other possibility is that the collapse of BNFL, which must happen, leads to the collapse of the new contract. Would it not be better if the new contract were broken now and re-tendered rather than if it collapsed in a few months?

My constituents' concerns are not based on any hostility to AWE. Indeed, many of them work there. However, they are concerned about its future and want to know that those responsible for managing the site can be expected to put safety before anything else.

It would be much the best thing if the Minister now declared that the safety concerns with respect to BNFL and Lockheed Martin had persuaded him to cancel his newly signed contract. If he will not do that, I predict that the collapse of BNFL will force him into that position in the near future.

9.45 am
Mr. Martin Salter (Reading, West)

I congratulate the hon. Member for Newbury (Mr. Bendel), who in this context should, I suppose, be described as my hon. Friend, on securing this important Adjournment debate. Like him, I have been involved in the issue for many years. We both attended the successful community inquiry in Reading in 1993 just after he was elected. That dealt in detail with the health, safety and environmental aspects of what happens behind the wire at AWE Aldermaston.

The community inquiry, which was chaired by the eminent Queen's Counsel, Helena Kennedy, concluded that we suffer from the British disease of secrecy. It is not that my constituents or the people of Newbury, Wokingham or elsewhere want to know how an atomic bomb is made, but they have a right to know that what happens during the process is not a danger to them or the local environment. I share the concerns of many people who have campaigned for many years for a culture of greater openness at AWE Aldermaston.

In 1993, the management regime changed to something affectionately known as GOCOGovernment-owned, contractor-operated. Some naive people, mainly on the left, have argued that that in itself led to a diminution in safety standards. That is fundamentally untrue. The Ministry of Defence will admit in quiet, private moments that many of the problems at AWE Aldermaston occurred in the 1950s and 1960s, when the safety culture was even poorer than it is now. One of the problems of my constituency in particular, being downwind and downstream of AWE Aldermaston, is that at times of flash floods all sorts of radioactive materials are washed off the site. They have probably been buried for many years. The Ministry of Defence and whoever operates AWE Aldermaston do not know where, because the culture at the time in question was so different.

What I have described does not mean that since 1993, when immunity was lifted and the site came under the regime of the nuclear installations inspectorate and other bodies such as the Environment Agency and the Health and Safety Executive were given a locus, the safety regime has been at all satisfactory; it is just that the lid has been lifted a little. As the hon. Member for Newbury said, there has been a prosecution in Newbury magistrates court. Two workers were contaminated as a result of plutonium leaks. If I may correct the hon. Gentleman slightly, on 13 December—the case is referred to in an early-day motion tabled in our names—the Environment Agency prosecuted the management of AWE Aldermaston for deliberately discharging radioactive material into the Aldermaston stream, which, before it flows into the Thames, flows into the River Kennet, from where Reading's drinking water is taken. That was a flagrant breach of safety procedures and the law, and a matter for some concern.

No wonder local people, including my constituents, are worried about the management regime at the plant. The decision to award the contract to AWE Management Ltd. was for most of my constituents a case of out of the frying pan and into the fire. We have heard about the appalling safety record of Lockheed Martin. I have been in contact with several people at AWE Aldermaston and elsewhere. In some cases, for employment reasons, they contacted me anonymously.

When they heard that Lockheed Martin was in the frame for the contract to run AWE, the overwhelming message was, "God help you." As was highlighted, its track record in the United States was little short of lamentable. That was before the blatant and deliberate falsifying of nuclear data at Sellafield occurred.

Like other hon. Members, I received a letter from Baroness Symons towards the end of November, informing me of the new management arrangements. I was concerned then, but I am far more concerned now that I have heard what has happened in Cumbria. The resignations and Ministers' statements that followed did not further reassure me—they made me absolutely convinced that the contract must be reviewed and that safety, and the interest of the local and national environment, must be made paramount.

I shall quote from a letter that I received two days ago from a worker at AWE Aldermaston, who signed it "A very concerned Worker". From the style of writing, I think that it is one of several communications that I have had over the past couple of years. It begins: Dear Mr. Salter, I note from the recent press cuttings that you have some concern relating to the management of the Atomic Weapons Establishment at Aldermaston and Burghfield, although your concerns seem only to be focused on the performance of the current contractor, HuntingBrae. While your concern has an undeniable basis, a far more significant concern has arisen in that AWEML will be taking over the management contract from April 2000 for a… period of 20 years. The first question you must ask yourself, is why did HuntingBrae lose the contract. Current opinion within the workforce indicates a lack of safety performance and a slowness in taking remedial action. He lists details, and continues: A further failure may have been the fact that the Liquid Effluent Treatment Plant for Radioactive Waste is still inoperable after eight years, and we are still using a plant that was condemned in 1977. If it is true that HuntingBrae lost the contract through poor safety performance, why then are AWEML being allowed to manage such hazardous sites, bearing in mind the safety track records of BNFL and Lockheed Martin Energy Systems, which begs the question— the first question that I should pose to the Minister— are MOD PE Contracts Branch competent to carry out the required technical assessment. In recent interviews with Junior Ministers, a lack of knowledge of the poor performance of the incoming contractor both at Sellafield and in the US has been profound. Interface with AWEML during the lead in phase to the new contract engenders serious misgivings on the new contractors grasp of the management function required to control such hazardous processes. My correspondent's next point worried me gravely. He wrote: Throughout the early life of the new contract, the workforce is to be downsized by a further 1,500 personnel, although no specific areas have been identified as redundancy targets. During the tenure of HuntingBrae the workforce has been seriously depleted, to such an extent that much of the technical knowledge and experience, particularly in the nuclear and chemical process areas no longer exists. In an instruction to me, he wrote: What you should be pursuing is the terms of the new contract— and the way in which the Department concluded that a consortium including Lockheed Martin and BNFL were suitable for managing an atomic weapons establishment.

I should briefly pose five further questions. First, will the Minister give insight into what research the Department did, before awarding the AWE contract, into Lockheed Martin's record in the United States? Secondly, was the Minister made aware of how poor Lockheed Martin's safety record at the four sites that it managed for the Department of Energy in the United States was? Thirdly, is the Minister aware that members of the work force are unhappy that an American company will be running the UK's nuclear weapons plant? Fourthly, exactly what role will BNFL play in maintaining the UK's Trident programme at the Atomic Weapons Establishment? Fifthly, have the recent revelations about MOX data falsification at Sellafield caused the Minister to reconsider his decision to award the Aldermaston and Burghfield contract to AWE Management Ltd?

The need for ministerial intervention is clear. Only yesterday, I learned that an electrician was burnt on site at AWE Aldermaston and is currently undergoing treatment at a specialist burns unit for his injuries. AWE's track record on safety, under the MOD, Hunting-BRAE or any other management regime, is simply unacceptable. Will it be improved by the involvement of BNFL and Lockheed Martin? I think not. To put it simply, people who tell lies, falsify data and prove themselves to be untrustworthy should not be allowed to play with nuclear weapons, and they should certainly not be put in charge of this country's nuclear defence capability.

9.55 am
Mr John Redwood (Wokingham)

I am grateful to the hon. Members for Newbury (Mr. Rendel) and for Reading, West (Mr. Salter) for asking those questions and for leading the debate on these sensitive issues in recent months.

I share many of the worries of the hon. Members who represent neighbouring constituencies. Burghfield is in my constituency and, as far as I can judge, my constituents' concerns fall into two categories. I say, "As far as I can judge," because I have received only a couple of letters on the issue in quite a long time. However, I suspect that that is not a fair reflection of the underlying concern. Those who are most directly involved express the first concern. Those who work in the organisation are worried in case too many jobs are cut, which not only would affect their immediate family circumstances but might jeopardise safety by removing too many people from the work force. The whole work force needs to be reassured that the new contractors, whoever they may be, will make safety their overriding priority and understand the need to motivate and retain a good work force who are dedicated to that task. That emphasis on safety must come from the top, but it must infuse the whole organisation. We need a work force who are persuaded by their management that safety is their overriding priority and who are given the operating climate and facilities to enable them to get on with the job of ensuring that safety is guaranteed.

The second worry of my constituents is more general. They wish to be reassured that they are living near a safe installation that will not pollute the rivers and jeopardise health. Several inquiries have taken place to investigate whether the incidents that are known to have happened so far have had any adverse consequences on the health of the general population. As the hon. Member for Reading, West said, there may already be several nasty substances on the sites, which might leach into water courses during heavy rains or flooding. We would like to know more about that, as well as about what action will be taken in future to clean up and contain any problem that has accumulated over many years of operation.

Is the Minister at all persuaded by the comments of the hon. Members for Newbury and for Reading, West that the position is so difficult that the contract needs to be re-tendered? That is one way in which the Minister could proceed, but the Minister must also consider the contractual arrangements that have already been entered into and who else might be able to provide a better future, and he must think about the pickle that he has got himself into by having gone so far against the advice of the hon. Members for Newbury and for Reading, West. I am not one of those who has wanted to conduct a public debate about the issue because, although I share the enthusiasm of other hon. Members for openness and sensible publication of information, I believe that these sensitive issues are best sorted out by those in the know, whenever possible. I try to achieve that by correspondence rather than by rushing to the local newspaper.

A second possibility, which the Minister may prefer, is to continue with the current contract, which will come into operation on 1 April if nothing else changes. If that were to happen, the least that the Minister could do for the local community would be to explain what action was being taken, especially in the light of the discoveries at BNFL Sellafield, to ensure no repetition of any such conduct under the new contractual arrangements.

Some of the employees and many of my constituents, if asked, would expect a full review and statement from the Minister on how the new arrangements will differ from the mistakes made by participating companies in the past. We should need more than mere words; we should need a formal agreement to show that safety had been written into the contract from beginning to end, that there would be a substantial tightening of working practices and that safety would come from the top and be the absolute priority. It would also be useful if the Minister were to provide a statement on how any accumulated problem in the organisation would be approached. That statement should cover the questions of substances possibly already on site, and of staff training and motivation, so that the concerns expressed by Members and their constituents could be properly addressed.

I make those proposals in a constructive spirit, because this issue is too serious to turn into a party political row. One could say that Ministers were being complacent, or that they were not keeping up with the job. I received some very complacent answers from the right hon. Member for Derby, South (Mrs. Beckett)—now the Leader of the House—when she was in overall charge of nuclear safety at the Department of Trade and Industry. However, this is not an appropriate occasion for that kind of debate.

This matters to our local communities, and I am here as a representative of my constituency. I agree with much that other Members have said, but I wish to make my own statement in my own way, because it is important for the Minister to understand the feeling in the constituency about the sensitive issues of employment and safety that predominate in local debate.

10.2 am

Mr. Quentin Davies (Grantham and Stamford)

I congratulate the hon. Member for Newbury (Mr. Rendel) on securing this debate. It would have been unnatural if Parliament had not had an opportunity to discuss such an important matter at a time when the contracts for supervision of the two facilities might be about to be changed, against the background of the failures of the existing contractor and by the prospective contractors. It is extraordinary that the Government should place a contract with a consortium, both of whose partners have so dubious a safety record.

The hon. Member for Newbury summarised clearly the track record of British Nuclear Fuels and Lockheed Martin, and I need not go over that ground again. I understand that the Oak Ridge and the Idaho incidents have, rightly, been treated very seriously in the United States, which will affect the willingness of other public authorities—or, perhaps, private corporations—in the United States to put their trust in Lockheed Martin as a suitable manager of nuclear installations.

We have a great deal to be proud of over the past 50 years in the British nuclear industry. It would be wrong to conduct this debate without recognising that Britain had the first commercial fission reactor, and that the Aldermaston facility has done a superb job in providing for our essential nuclear deterrent over 50 years. Safety failures have occurred from time to time, but that should not eclipse the record of considerable achievement, for which we are all enormously grateful.

The British nuclear deterrent played a significant part in keeping the peace, and in our eventual victory, in the cold war. We must pay tribute to the generations of British scientists and engineers who have done a superb job. British Nuclear Fuels, which reprocesses nuclear fuel on behalf of some extremely sophisticated customers, has a fine record. There are no customers more sophisticated than the Japanese, Swiss and Germans. They have placed their confidence in British Nuclear Fuels and, as a result, very important business has been generated in this country.

In marked contrast to that positive record, we should be particularly concerned at recent events at Sellafield, which constitute a betrayal of that record and of the traditions of a plant that has served the nuclear industry and this country well for a long time. It was right for the chief executive, Mr. Taylor, to resign, although I assume that he was unaware of, and certainly did not authorise, any errors of commission or omission in respect of safety procedures under his control. It is right that those at the highest level should take responsibility for such a serious incident. Any putative successor should be made aware that, should a similar incident occur, his career would come to an end as well.

Mr. Taylor has taken the right action, and it is right that individuals involved in safety failures at Sellafield should also be fired, but even that response is not adequate. There is prima facie evidence that deliberate, wilful and reckless breaches of safety rules have been compounded by the falsification of records. I shall go no further than to say that, if that is true, the individuals concerned should be subject to criminal sanctions. It is not for me to pre-judge decisions taken by the prosecuting authorities or the courts. However, Parliament should establish whether the law provides a suitable basis for an appropriate response to allegations not merely of inadvertent omissions—which, although they would not justify a criminal sanction, might justify a sacking but of reckless and deliberate safety failures. In such circumstances, mere corporate sanctions or the sacking of the chief executive is insufficient.

For all the reasons given by the hon. Members for Newbury and for Reading, West (Mr. Salter) and my right hon. Friend the Member for Workingham (Mr. Redwood), nuclear safety is important. Before we can reassure the public on this matter, we need assurances from the Executive branch of Government, and I hope that we shall hear them in a moment. It is also important that the legislative branch of Government take the matter on board by ensuring that the law is adequate and the penalties and legal deterrents appropriate to the gravity of the case. Mr. Cook—

Mr. Deputy Speaker (Mr. Frank Cook)

Order. The hon. Gentleman is doing very well, and I do not wish to disturb the flow of his argument. However, all hon. Members will appreciate my reminding him that, when the House, in its wisdom, embarked on this experiment, it was decided that this Chamber should be an extension of the whole House, and that the Chairman be addressed as "Deputy Speaker" unless a Committee is in session. I am sure that hon. Members will appreciate guidance on that matter.

Mr. Davies

I certainly appreciate that guidance, Mr. Deputy Speaker, and I apologise wholeheartedly for that breach of protocol. This is the first time that I have taken part in a debate in this Chamber, and I hope that that might be considered a sufficient excuse, but I certainly take on board your point and I apologise for my mistake.

The hon. Members for Newbury and for Reading, West and my right hon. Friend the Member for Wokingham were right to speak as they did. Given their constituents' profound anxieties about some of the recent safety failures, including that at Hunting-BRAE, which appears to have polluted the Kennet, they spoke in extremely measured tones. I can imagine the pressure that would be placed on me if there were a threat, let alone a case, of that kind in Lincolnshire. All three hon. Members showed considerable moderation in their comments. Their demands for reassurance from the Government are entirely reasonable, and I hope that they will be satisfied.

The central questions to which the Minister must give a concrete response are: what confidence we can have that these failures, which appear to be almost systemic in British Nuclear Fuels and Lockheed Martin, will not be repeated under the new contract? What new procedures and sanctions are in place? What is new about the way in which the contract has been framed?

I should be grateful if the Minister would deal with another issue. What is the role of the Ministry of Defence, especially the Defence Evaluation and Research Agency, in such contracts? The Government plan to privatise DERA; they expect to raise £250 million pounds from doing so, and if they do not get it there will be another hole in the military budget. Is DERA acting as a dispassionate adviser to the Government on the specifications and negotiations involved in the contract? Is it a source of reliable independent technical advice—which the Government clearly need—or a potential rival bidder for the contract? In other words, is it one of the companies, which hon. Members have asked the Minister to list, that is an alternative to the Lockheed Martin and BNFL combined consortium? Clearly, one organisation or corporate entity could not adequately fulfil both roles without conflicts of interest arising.

Safety requires three key elements. First, it requires engineers and scientists of the greatest technical competence. Secondly, it requires the highest motivation and integrity—not only internal integrity, but an external framework of discipline in safety that includes the necessary sanctions for misbehaviour. That is essential in generating a culture in which safety is considered to be a central and non-negotiable element of the conduct of operations. Thirdly, it requires a proper set of checks and balances. A clear distinction between the role of the contractor and that of the customer is essential, so that it is plain who is advising one and who is advising the other, and how the chain of responsibilities operates. There must be no conflict of interest and no fudging of responsibilities.

Mr. Rendel

I believe that I can help the hon. Gentleman about DERA. The letter that we received from Baroness Symons when the contract was awarded stated that two consortiums had been unsuccessful, one of which included Hunting-BRAE. DERA was a member of that consortium, and is thus part of one of the competitor consortiums that bid for the contract when it was awarded to AWE Management Ltd.

Mr. Davies

As the hon. Gentleman may have surmised when I was speaking, I had at the back of my mind a slight suspicion that circumstances might be as he just described. I preferred to ask my question of the Government openly. Nevertheless, a response is required. It is important that we receive the relevant assurances from the Government. Time constraints should not interfere with the Government's ability to deal authoritatively with such important issues.

10.15 am
The Minister for the Armed Forces (Mr. John Spellar)

I certainly do not feel constrained by time. I am sure that hon. Members will be glad that the hon. Member for Newbury (Mr. Rendel) excused himself for his performance on the grounds that he had been up all night in the Division Lobby. We would not otherwise have noticed. Unusually, and unnaturally for a Liberal Democrat, his speech was remarkably brief, which has allowed me more time.

Before I respond in detail to the points made, I want to take the opportunity to send best wishes on behalf of all hon. Members to the member of the contractor's staff who suffered flash burns in an electrical accident at Aldermaston yesterday. He is in a stable condition in hospital, and we hope that he makes a speedy and complete recovery. As you will understand, Mr. Deputy Speaker, I have been asked to withhold his name to protect the feelings of his family. We do not yet have a report on the circumstances or causes of the accident, and I am sure that my hon. Friend the Member for Reading, West (Mr. Salter) did not wish to imply that we already knew those circumstances, or that there was a particular cause.

On the main point of this debate, the MOD fully shares hon. Members' concerns about the safety record of the consortiums that bid for the running of AWE at Aldermasteron, and, indeed, the winning consortium. The Ministry fully supports the strong line taken recently by the Department of Trade and Industry in setting up an inquiry into BNFL's safety culture at Sellafield. That is clear evidence that the safety watchdogs established to oversee nuclear installations in this country are willing to act independently, quickly and robustly when incidents of such a nature are identified. I applaud such vigour, and I am sure that the watchdogs would be equally critical and responsive should such an incident affect any MOD installation.

As hon. Members know, the Department of Trade and Industry is due to produce a detailed report on BNFL by the middle of April, which slightly constrains today's discussion, in terms of the Government's response. Clearly, it would be inappropriate and imprudent for me to prejudge the issue today; I am sure that hon. Members will understand that. However, I should stress that the MOD is working closely with the officials carrying out the inquiry, to examine whether there are implications for safety operations at Aldermaston. Not only will we study the inquiry's findings carefully, as hon. Members would expect, but, if lessons are to be learned, the MOD will insist that they are fully implemented. Furthermore, I emphasise that, if necessary, existing contractual arrangements will be extended, or direct MOD management imposed, until new appropriate arrangements are made for the longterm running of the site. It is unusual to reach such a conclusion first, but it is appropriate in view of the concerns expressed by hon. Members. It makes clear the direction in which the Government are moving.

I am also aware that similar criticisms were levelled in the media, and repeated in this Chamber today, in relation to Lockheed Martin, which is one of the three shareholders in the new consortium. Those criticisms relate to its safety record at its facilities in the United States. Those facilities are subject to the closest scrutiny by the US regulatory authorities. In line with our traditional strong relationship with the United States on the defence and the scientific side, which has rightly been the subject of many comments in the House over the years, we understandably maintain regular contact with them.

The United States Department of Energy, the responsible authority, recently issued a report on an incident at the Oak Ridge facility in December last year, in which a number of workers were injured. We are studying the findings to see whether there are any lessons to be learned for AWE. However, the independent British nuclear installations inspectorate reviewed the incident at the time, as it does all incidents that may have a bearing on operations at Aldermaston or elsewhere, even if they take place outside the United Kingdom, and concluded that the Oak Ridge case had no bearing on the operation of our installation at Aldermaston. Hon. Members who have had any involvement with the nuclear industry will know that there is a regular exchange of information between the major operators and inspectors around the world to ensure not only that lessons are learned in each country but that the highest standards are maintained.

The media suggestions that Lockheed Martin's contract to run the Oak Ridge site has been shortened as a result of its alleged poor safety record appear to be unfounded. We have looked into the matter, and I am advised that the contract has been extended and that the company is competing for the new contract when the current one expires.

Mr. Quentin Davies

As the Minister probably has better sources of information than I do, will he confirm, or perhaps refute, the suggestion that has been put to me that the United States Secretary of Energy, Bill Richardson, has refused Lockheed Martin permission to restart operations at the Oak Ridge plant in Tennessee because of security concerns and its— Lockheed Martin's— failure to demonstrate in a practice run that it was ready for the safe restart of enriched uranium operations? Is that report correct?

Mr. Spellar

I am not sure whether two issues are getting mixed up here. One is the general relationship between the United States Department of Energy and Lockheed Martin. The second is its view on whether a certain plant is technically ready and able to start up. One could have confidence in a company's general competence, but might consider that a piece of equipment was not yet ready and required further work and testing, particularly in the nuclear industry, to have the greatest possible assurance that it would run satisfactorily. There are a number of extremely competent defence contractors, but we would not necessarily accept a piece of equipment if we were not satisfied that it was technically compliant.

I shall look into the quote from Bill Richardson. However, following our inquiries, our opposite numbers in the United States Department of Energy have not suggested that their confidence in the company's overall performance has been undermined by the recent incidents. I give the hon. Member for Grantham and Stamford (Mr. Davies) the undertaking that, if he will let my office have a copy of the item to which he referred, we shall look into the matter. For the reassurance of the residents in the area, as well as anywhere else, we want to be clear about any uncertainty felt by anyone, especially someone of the standing of Bill Richardson. Previously, he was the United States representative at the United Nations and a distinguished congressman for New Mexico, a state that contains several of the USA's nuclear facilities, including the Sandia laboratories and the Los Alamos facilities.

As my right hon. Friend the Secretary of State announced on 21 February, we have instructed the Chief of Defence Procurement, Sir Robert Walmsley, to examine the terms and conditions of the Atomic Weapons Establishment contract to ensure the preeminence of public health and safety as it affects the public and workers at the facility. I join hon. Members in paying tribute to the skill and expertise of the plant workers, many of whom are at the leading edge of technology and science, in maintaining and advancing our nuclear deterrent. It would be improper not to use the debate to report the public's appreciation and understanding of their capability and dedication.

Mr. Rendel

I am grateful to the Minister for his commendation for the staff concerned. However, will he tell us why the Chief of Defence Procurement has only now been asked to consider whether the contract is sufficient in terms of its emphasis on health and safety? Would it not have been rather better to consider the contract before deciding what would be the new consortium?

Mr. Spellar

With the conduct of an installation such as AWE Aldermaston, safety questions are inevitably at the forefront of our thinking. In the light of incidents extraneous to Aldermaston, notably at Sellafield but also in the US, it was only right and proper to ask the Chief of Defence Procurement for further examination and insurance. That seems appropriate, and I can imagine the criticism that we would have faced had we not done so. It does not mean that we believe that the procedures are unsatisfactory, but it is obviously right to take this action, due to current public and parliamentary concern.

We have also insisted that all BNFL nominations to senior positions at Aldermaston are fully vetted and are unconnected to the incidents at Sellafield. That is important in the light of hon. Members' comments in the debate. If necessary, BNFL will be asked to replace nominations with other candidates of proven experience and reliability.

However, I stress that the safety of the Aldermaston site has always been our top priority, and we are determined to ensure that safety is not compromised for any reason. The new consortium is due to take over operations at Aldermaston at the beginning of April, subject to the caveats that I mentioned earlier. It will happen only if the independent regulator, the nuclear installations inspectorate, is fully satisfied that the consortium is in a position to implement the highest safety standards possible and is therefore willing to issue a licence to run the site. The hon. Member for Grantham and Stamford outlined the need for checks and balances, and the independence and vigorous approach of the inspectorate is a real check and balance in the nuclear industry in this country.

The licence is a precondition for the new contract to take effect. Even then, the licence can be revoked by the inspectorate at any time if safety standards are neglected for any reason. In addition, the Ministry of Defence maintains full-time compliance officers at the site, with the authority to inspect any aspects of activities and to examine any report or paperwork relating to operations. If those officials have any qualms over safety matters, they are obliged to report them immediately to the MOD. Again, the Ministry of Defence—as the customer—has the power to suspend operations at the site and to cancel the contract at any time if safety matters are being affected adversely. I want no one to be in doubt that we shall exercise those powers if the situation requires it.

Mr. Salter

I am delighted that the MOD will not shirk its responsibilities to suspend operations or the licence if there is proof of safety breaches at AWE Aldermaston. Will the Minister say how many prosecutions it will take for the MOD to adopt that position? How many rivers will have to be polluted? How many prosecutions will there have to be in a magistrates court? Can we know what is, and what is not, an acceptable level of breaches of safety procedure under the law?

Mr. Spellar

If my hon. Friend does not mind, I shall deal with that matter when I deal with individual safety incidents. I stress that we shall insist on retaining the high level of safety standards that is already maintained. We shall be looking to whoever operates the site to act positively to improve current standards.

Before I come on to the record of Hunting-BRAE, on which I differ from my hon. Friend the Member for Reading, West, it would be as well to go into the history of the site and explain how the particular situation has arisen with regard to its management. In the middle and late 1980s, AWE was struggling to complete its capital building programme and, equally significantly, to recruit, train and retain staff in sufficient numbers to cover the increase in work load that was created by the need to build and deliver the warheads for the new Trident system. For several years, such a problem had seriously concerned the Select Committee on Defence, which, as late as 1989-90, expressed the view that

the manpower difficulties to which we referred last year have worsened … Unless the remedial measures proposed prove effective, there is now a significant risk that some elements of the programme may fail to meet their scheduled delivery dates. The remedial measures that the Defence Committee had in mind had been announced on 5 December 1989 by the Ministry of Defence. They involved the full contractorisation of the establishment, with land, buildings and other assets remaining in Government ownership—Government owned, contractor-operated, a GOCO site. The Ministry of Defence added that that move would require legislation and, until that could be achieved, it intended to appoint a managing contractor who would concentrate initially on manufacturing work and site support, and who would strengthen the establishment by bringing in, during 1990, a small number of experienced managers from the private sector. The MOD emphasised that there would be no change in the direction or purpose of the establishment's programme and that the first objective was to reinforce rather than replace existing AWE management.

It is worth while for me to dwell on the concerns of the Select Committee at that time. It was told that safety considerations would be one factor in the award of the eventual contract and that it was one of the areas where it was intended that the contractor would not be allowed to change or compromise on the current high standards. However, the Committee considered that, although the MOD compliance office would provide additional levels of scrutiny and audit, there was clearly some potential contradiction between the imposition of new management who were intent on change and the need, rightly, to maintain the existing safety culture. The maintenance of high standards in the face of management pressures to reduce costs would, thus, be dependent on the calibre of staff and resources allocated to the compliance office.

The issue of radiation dose limits was a further factor that concerned the Defence Committee, with potential contractors having to bear in mind the possible financial implications for future liability for compensation.

The 1989–90 Committee concluded: It is essential that the move to contractorisation is not rushed and that the details are very fully worked out before the contract is awarded. In particular, safety and security issues should be fully explored, and detailed and binding standards applied to all four sites set out in the invitation to tender and in the eventual contract. The financial implications of the proposal need further consideration and we remain concerned about the potential for conflict between commercial pressures—the need to make profits—and the requirements of the health and safety of staff at AWE and of the general public, of security and the work programme. We hope that by the time we come to take evidence on this subject again, the MoD will have made greater progress in establishing the detail of its plans and be able to offer satisfactory assurances on these points. I mention those points because many of the concerns expressed by hon. Members were similar to those that we have heard today; in other words, that has rightly been a continuing theme.

By the 1991–92 Session, the Committee noted the MOD view that the interim contractor had made an encouraging start and had continued to meet stringent safety and security standards while achieving its programme commitments. The most significant element of that Committee's report, however, was that, for the first time in several years, it expressed no concern about AWE's ability to recruit and retain the necessary staff.

In the event, Hunting-BRAE took over the management and operation of AWE under the first term contract on 1 April 1993. As hon. Members will know, Hunting-BRAE was one of the companies that sought the new contract. Hon. Members asked about the composition of the various consortiums. The Hunting-BRAE contract included the existing members Brown and Root, Hunting Engineering and DERA, which was mentioned by the hon. Member for Grantham and Stamford. AWE 2100 comprised Babcock Facilities Management, W. S. Atkins plc and an American firm, Science Applications International Corporation. The winning consortium, AWE Management Ltd., comprised Serco Defence Support, a British company, British Nuclear Fuels Ltd. and Lockheed Martin, which, although primarily an American company, has a significant and increasing presence in Britain, which is very welcome.

In the seven years since Hunting-BRAE took over, it has delivered the programme. It has done so without increasing staff numbers. In fact, the numbers now employed at AWE are substantially lower than at the start of its tenure. Impressive as those achievements are, they would have been of no benefit if safety standards had been allowed to fall. I am pleased to remind hon. Members that no such diminution occurred.

The 1992–93 Committee noted that there had been several safety-related incidents at the establishment over the previous 15 years, the most recent involving the release of a small amount of radioactive material from a damaged container on 8 December 1992. The Committee reported that there was some unease among staff and members of the public and that that could best be assuaged by an independent assessment of safety levels at AWE. It therefore welcomed the fact that the Health and Safety Executive was undertaking a review of safety procedures and emergency arrangements and considered it important that the findings were made available to the public.

The results of that review were, and remain, important. The Health and Safety Executive concluded that, although AWE was acceptably safe, its safety arrangements were not demonstrably safe, and weaknesses existed in health and safety management. The HSE made 18 primary recommendations and a further 46 to which it required a response. It referred not to Hunting-BRAE, which had only just taken over the contract, but to the circumstances inherited from the previous management regime.

Most significantly, the HSE recommended that the Secretary of State for Defence should remove AWE's immunity from the Nuclear Installations Act 1965, which would make the establishment subject to nuclear site licensing and bring it in line with other civil nuclear facilities. That immunity was subsequently removed, and Hunting-BRAE went on to achieve site licences for the Aldermaston and Burghfield sites in July 1997.

My hon. Friend the Member for Reading, West asked about prosecutions. Two prosecutions were brought by the nuclear installations inspectorate. The first was brought on 18 February 1997 under the Control of Substances Hazardous to Health Regulations 1988, and involved an employee working with adhesives in a confined space who was overcome by fumes. The company involved was fined £2,000 and a further £2,000 costs. However, although the incident was regrettable and unfortunate, it did not involve nuclear materials, being more of a traditional industrial accident.

The second prosecution, which has already been mentioned, was brought under the Health and Safety at Work, etc. Act 1974 following an incident on 15 December 1997, when plutonium oxide was released during removal of a filter and was inhaled by three workers. The company was criticised for an inadequate safety culture, and was prosecuted and fined £22,000 with costs of £3,000.

The third prosecution, which my hon. Friend the Member for Reading, West and the hon. Member for Grantham and Stamford mentioned, was brought by the Environment Agency and related to discharging water contaminated with tritium into the Aldermaston stream. The Environment Agency stated that the discharges did not present a threat to public health or to the environment and, indeed, accepted that AWE could continue to allow such discharges. The Environment Agency's complaint related not to the nature of the discharges but to the fact that Hunting-BRAE had not sought formal permission from the Environment Agency to allow the discharges as it should have done.

Mr. Salter

My hon. Friend is right to point out that the discharges were within limits but were unauthorised. However, the company had no way of knowing whether the discharges would be within limits, because they were the result of flash flooding on the site and the inability of the ground water storage system at North Ponds to cope. The incident involved low-level radioactive unstable nuclear material, and the company had no idea how much was involved. Because of the inadequacy of its control mechanisms, it had no option but to allow the discharge to go into the water course. In different circumstances, the company might have reached recommended safety limits.

Mr. Spellar

The level of radioactive tritium in the tanks was sufficiently low as not to pose a threat to health, as the Environment Agency fully accepted. It was not a case of keeping dangerous materials that were fortuitously diluted; there were low concentrations of tritium, and, as I understand it, the Environment Agency had subsequently accepted AWE could continue to discharge down that route. It was rightly concerned about what it saw as inadequate procedures in AWE for seeking and obtaining authorisation to take such action, and it is right that the organisation should be called to account for that. We must get the issue into perspective to decide whether there was or would have been a threat to public health. We should bear in mind the way in which the media tend to deal with anything radioactive and the fact that the public are not necessarily able to ascertain levels of radioactivity and risk.

Mr. Salter

I may have some advantage over my hon. Friend, perhaps because he has not been fully briefed. Is he aware that one of the reasons why the management of AWE Aldermaston was in the invidious position of having to let an unknown quantity of contaminated water run into the water courses was that the Pangbourne pipeline was operating to capacity? Is it not a matter of severe concern that the pipeline is starting to flake? The management of AWE Aldermaston has a problem: if it puts too much water down the authorised route, uncontrolled amounts of plutonium and uranium will flake off the scale that has built up on the pipeline for 40 years. Shortly, Ministers will have reports on their desks recommending that the Pangbourne pipeline be shut down and that an evaporator be installed. Would that not be a far better way of avoiding this Mickey Mouse system of getting rid of contaminated water from a contaminated site on the edge of my constituency?

Mr. Spellar

Again, my hon. Friend has included the answer in his question. The matter would be resolved by engagement between AWE and appropriate regulatory authorities. It was self-evident in his points that they are engaged in those discussions, and we will await the outcome. That is the right way to proceed and it provides the checks and balances that the hon. Member for Grantham and Stamford said were required in the system. We must ensure that those checks and balances are working, and my hon. Friend's contribution showed that they probably are.

Mr. Quentin Davies

The Minister is describing failures relating to safety procedures that are found to be inadequate by experience and to inadequate investment and renewal of equipment. Does he accept that corporate sanctions are appropriate in such cases? The ultimate corporate sanction is to deny a contract and to exclude the company from future bidding; other corporate sanctions involve fines. When different cases arise, however, I hope that the Minister will accept my earlier argument. I referred to cases in which procedures are in place but in which individuals wilfully and knowingly decide to breach them and, as was alleged about Sellafield, extend their misbehaviour by falsifying records. Does he agree that criminal sanctions are appropriate in such cases and does he believe that the criminal law is adequate for that purpose? I hope that he will address that specific point before he concludes his remarks.

Mr. Spellar

I fear that the hon. Gentleman is tempting me to stray beyond the bounds of my ministerial responsibility, even if not beyond those of the debate. His points should be directed at Ministers responsible for legislation on health and safety at work, for nuclear safety legislation and for the control of hazardous substances. He may need to check how his Front-Bench colleagues feel about extending the concept of corporate liability, but he may be aware that some moves have been made in that direction. I fear that we are stepping beyond the bounds of the Ministry of Defence and into areas controlled by the Department of Trade and Industry and the Department for Education and Employment.

As well as the cases that I have mentioned, eight enforcement notices and 22 lesser communications have been issued by the nuclear installations inspectorate and the Environment Agency. Like prosecutions, those notices demonstrate the vigorous independence of the regulators and their determination not to compromise on safety at nuclear installations.

Mr. Redwood

The Minister said that the new consortium was still seeking a safety licence. Will he tell us what safety remit or requirement is being imposed on that consortium in the run-up to the granting of a licence? Has that remit been strengthened or amended in the light of recent events?

Mr. Spellar

The body that grants the licences, the NII, is independent of the Ministry of Defence, the Government and companies. It would be improper for the Government to engage directly in discussions between the incoming or outgoing consortiums and the NII. The inspectorate has an independent role within the regulatory framework. Consequent upon changes in legislation, Aldermaston and Burghfield are being treated as civil nuclear installations for the granting of licences.

As I said in response to a previous query—this may answer the right hon. Member for Wokingham (Mr. Redwood)—we are satisfied with the safety provisions of the contract. In view of the present controversy, we believe that it is appropriate to ask the Chief of Defence Procurement to revisit those sectors to ensure that measures providing for the maximum possible safety are included in the contract. However, that is slightly different from the licensing of a company by an independent regulator.

Mr. Redwood

I partly accept that, but I hope that the Minister understands that the public and Parliament regard the Government as the ultimate custodian of public safety and public interest in the matter. It is not of much interest to the public to know that different people with different hats are responsible, and that the Minister cannot answer for them.

I hope that the Minister will extend his answer a little to try to offer my constituents and those of the other hon. Members here today some reassurance that, in view of the public's concern and the concerns mentioned by the two hon. Members who represent the area, the Government have taken a grip on the matter, that higher and better standards are expected and that they have taken appropriate action.

Mr. Spellar

The Department of Trade and Industry has ordered an inquiry into Sellafield. I am reluctant to be drawn into speaking of the independence of the regulatory authorities on matters of health and safety, as suggested by the right hon. Gentleman. We would rightly be criticised if Departments that could have a direct interest were seen to intervene directly in the affairs of independently appointed regulators. I am sure that the right hon. Gentleman understands that propriety must be maintained. That does not mean that Ministers and Government are unmindful of the need and desirability for health and safety matters to be considered, but it is enormously important that we maintain the integrity and perceived independence of the regulatory bodies. I accept that, when there is a question of profit and loss or pricing levels, more of a public debate is held. However, the Government—as customer, not just as legislator—should have an interest in the health and safety implications of their operations. Equally, it is vital for the maintenance of public confidence that we respect the independence of the regulators and the licensing authorities.

Within that context, I reject media suggestions that Hunting-BRAE lost the contract because it had a poor safety record. Indeed, hon. Members made allusions in that direction today. It is untrue. All three of the consortiums involved in the bid were fully compliant on safety standards. That is one of the main criteria for being considered in the first place. Hunting-BRAE did a good job of running AWE. That was one of the factors that encouraged the MOD to renew the Government-owned, contractor-operated system. Hunting-BRAE also put together a strong bid for the new contract. Indeed, all three bids from the consortiums that I identified were impressive.

During its tenure at Aldermaston, from 1993 until now, Hunting-BRAE positively promoted a safety culture by encouraging staff to report, on a no-blame basis, and anonymously if preferred, any safety-related incidents that came to their notice. Several thousand such incidents were reported, the great majority of them minor. Supported and encouraged by the MOD, the company also adopted a policy of transparency on safety matters. That included establishing local liaison committees, whose members, including local people, as hon. Members will know, are regularly briefed by officials from AWE, the nuclear installations inspectorate and the Environment Agency.

Mr. Rendel

Since we are getting close to the end of the time allowed, will the Minister use some of it to answer two further questions? He has just told us that he did not exclude other consortiums for safety reasons. Can he therefore tell us on what grounds the successful consortium was chosen? Also, will he deal with my earlier point and tell us whether he or his Ministry conducted his investigation into the likelihood that, given BNFL's problems, there would still be a BNFL in a few months' time? How did that affect his choice of consortium?

Mr. Spellar

The winning consortium was ahead in all apects of the requirement, although all the bids were compliant. I outlined earlier how we shall respond on the other matters following the outcome of the inquiry next month.

Mr. Rendel

The Minister gave an outline of future possibilities for BNFL, but I was asking what effort he made before the contract was awarded to look into the possibility that BNFL might not exist in a few months' time.

Mr. Spellar

BNFL exists and is a major company. It would be improper to prejudge the outcome of the inquiry.

The site, as I said, is also open to visits from interested parties such as Members of Parliament, and it attempts to publish as much information as possible about its activities. It is ironic that many of the media scare stories about AWE, billed as the results of investigative journalism, rely heavily on information put in the public domain by the company, but quoted misleadingly. Safety reports are regularly placed in the Library of the House of Commons. The local liaison committee includes councillors, members of the public and local authorities. Annual reports are published and presented to the public and there is transparency of safety incident reporting among the staff.

Hon. Members will recall that newspaper reports in October claimed that AWE had been at risk of a catastrophic nuclear accident several times in the previous 12 months and that it broke safety guidelines so often that only luck had prevented an accident worse than that at Tokaimura in Japan. That is simply not true. It was sensational journalism of the worst kind, and I am sure that the Members of Parliament concerned deplore it. We are pleased that Hunting-BRAE has tried to promote an open culture.

In conclusion, although the consortium will have the day-to-day responsibility for running the Aldermaston site, it will be subject to independent safety regimes, many of which I have outlined. Those will include Ministry of Defence compliance officials operating at Aldermaston, the Health and Safety Executive, the Environment Agency and the NII.

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