§ Mr. Battle
The total lifetime nuclear liabilities of the UK nuclear power industry at 31 March 1997 were £15.1 billion. This total arises from the contributions of three companies. The individual components are:
- British Energy: £5.2 billion
- BNFL: £1.481 billion
- Magnox Electric: £8.4 billion
These figures are discounted at 3 per cent. for British Energy and Magnox and 2 per cent. for BNFL. In the case of British Energy the above figures take into account the new and revised BNFL contracts announced on 4 June 1997.
British Energy's nuclear liabilities comprise decommissioning and backend fuel costs, and the company has made provision in its accounts for £3.8 billion of those liabilities. A segregated fund has been set up to cover the costs of decommissioning. This was endowed, by British Energy, with £228 million and receives payments of £16 million per year. It is designed to cover 110 per cent. of decommissioning costs based on independent engineering assessments. Payments for backend fuel disposal will arise over many years. Funds for dealing with those payments will come from existing funds and amounts built up from future business operations.
BNFL has already made provisions in its accounts for £1.158 billion of its nuclear liabilities. A further £323 million will be provided, in accordance with company policy, from the income generated over the remaining lifetime of plant which is still operating. More than half of the amount provisioned is in a separate fund, the bulk of which is held in gilts.
Magnox Electric has significant assets to meet its nuclear liabilities, most of which will not fall due for payment for a considerable number of years. Furthermore, the proposed integration of Magnox and BNFL will bring additional benefits in the cost and management of these liabilities. At 31 March 1997 there was a gap of £682 million between the company's assets and liabilities. This is covered by a long-standing Letter of Comfort from the Government originally given to Nuclear Electric in 1990.