HC Deb 03 April 1996 vol 275 cc310-1W
Sir Michael Grylls

To ask the President of the Board of Trade what progress is being made in the preparations for the privatisation of the nuclear industry. [25120]

Mr. Eggar

I am pleased to report that significant progress is being made in the arrangements for privatising British Energy. Agreement has been reached in principle on the capital structure of the company. Details will be included in the share offer prospectus in due course.

Three further significant milestones were passed on 31 March, 1996:

an independent segregated fund, which will provide for the cost of eventual decommissioning of British Energy's nuclear power stations, was established and will come into effect on privatisation. The fund will receive an initial endowment of about £230 million from the British Energy Group; the group will initially contribute £16 million per year in real terms to the fund thereafter. An independent trust, known as the Nuclear Trust, will manage the segregated fund and will own a funding company—the Nuclear Generation Decommissioning Fund Ltd;

British Energy plc, and its operating subsidiaries Nuclear Ele[...]tric Limited and Scottish Nuclear Limited, were formally vested, as was Magnox Electric plc, which will operate the magnox power stations in the public sector;

new nuclear site licences granted by the Health and Safety Executive for all British Energy and Magnox Electric nuclear power stations came into force.

Arrangements for the British Energy share offer are also on course. The offer is planned for July 1996. It will comprise on open-priced international tender offer to institutional investors and a UK public offer aimed at retail investors. The launch of the UK public offer is planned for late May. At least 30 per cent. of the shares are expected to be offered to retail investors. This proportion may be increased if retail demand is strong. Payment for the shares will be in instalments. The share price in the UK public offer will be at a discount to the international offer price. Incentives and preference in allocation will be available to individuals who register for the UK public offer through a share shop. Arrangements for share shops' participation in the UK public offer were announced on 28 March 1996.