§ Mr. Penhaligonasked the Secretary of State for Energy what are the specified circumstances in which he may sanction, under the Nuclear Industry (Finance) Bill, repayment of sums advanced to British Nuclear Fuels Limited under the terms of agreements entered into by British Nuclear Fuels Limited requiring it to perform services.
§ Mr. BennThe purpose of Clause 1(2) of the Nuclear Industry (Finance) Bill is to empower the Government to guarantee advance payments made to BNFL under contracts for the performance of services. There is no question of the Secretary of State sanctioning individual repayments contracted by the company. The Government guarantee would be called only in the unlikely event that BNFL were unable to meet a contractual liability to repay any part of the advance payments in cash.
I am advised that such a contractual liability on BNFL could arise only in the following kind of circumstances: (a) if, after advance payments had been made, a plant was not built, to the extent that these payments had not already been expended; (b) if a working plant were constructed and were not used to reprocess fuel for a customer who had made advance payments, in proportion to these payments, and were used for another customer and earned revenue from which investment could be amortised, a refund to the original customer who had made advance payments could be made out of the earnings; similarly there could be repayments if the plant were refinanced in such circumstances; (c) if a plant were 414W built but made inoperable, for example, due to fire, proportional repayments would be made out of any insurance monies which were received in respect of the damage.
Contracts for which advance payments are to be guaranteed will be subject to the approval of the Government.