HL Deb 07 December 2004 vol 667 cc51-4WS
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)

My right honourable friend the Secretary of State for Trade and Industry (Ms Hewitt) has made the following Written Ministerial Statement.

I am making this Statement as required by Section 31(6) of the Energy Act 2004 ("the Act") to coincide with the issuing of the ministerial directions giving the Nuclear Decommissioning Authority (NDA) its designated responsibilities under the Act. The Statement reflects the transitional funding arrangements for the NDA that will be put in place to allow it to get on with its work during the EC Commission investigation into notified state aid to the NDA.

In determining the amounts to be credited to the Nuclear Decommissioning Funding Account ("NDFA") under Section 31(4)(c) of the Act, the following policy applies:

Basis upon which determinations for the purposes of Section 31(4)(c) are to be made

1. Pending the outcome of the European Commission's investigation announced on 1 December 2004 into the UK Government's establishment of the NDA, the basis on which any determinations for the purposes of Section 31(4)(c) are to be made will be to credit to the NDFA such amounts as are sufficient to provide a sound basis for funding the NDA's activities consistent with:

  1. (a) the requirement that no new state resources shall be made available to the NDA for operating, cleaning up or decommissioning in respect of any of the economic activities of the NDA which are the subject of the Commission's investigation; and
  2. (b) the requirement that no advantage shall be conferred on BNFL or its successor companies pending the outcome of the Commission's investigation, and in particular that the net asset position of BNFL and the group of companies of which it forms part must not be improved.

2. The amount of any determination for the purposes of Section 31(4)(c) in relation to any financial year shall be the sum of the following elements:

  1. (a) an amount equal to the value of any assets taken out of BNFL's existing resources comprising the Nuclear Liabilities Investment Portfolio ("NLIP") by way of any nuclear transfer scheme which takes effect under Section 42 of the Act during that financial year;
  2. (b) in respect of the NDA's responsibilities in relation to sites operated by UKAEA as at the date of this Statement, and nuclear liabilities for which responsibility is, as at the date of this Statement, accepted by UKAEA, such amount as is appropriate within the Department of Trade and Industry's relevant expenditure limit;
  3. (c) in respect of the NDA's responsibilities in relation to nuclear liabilities for which responsibility was formerly accepted by the Ministry of Defence but is, as at the date of this Statement, accepted by the Department of Trade and Industry, such amount as is appropriate within the Department of Trade and Industry's relevant expenditure limit.

3. To the extent that the assets referred to in paragraph 2(a) above do not comprise cash, their value is to be determined as at the date upon which the transfer scheme whereby they are transferred takes effect.

The minimum credit balance of the NDFA

4. For the purposes of Section 31(7)(b) of the Act, the minimum credit balance of the NDFA shall be £1.

5. The basis on which this determination has been made is that the sums to be comprised in the determination in any financial year in accordance with paragraph 2 above (combined with any other amounts credited under Section 31(4)(a), (c) or (d)) are expected to be sufficient to fund the NDA's activities during the financial year in question, but no more. It is intended that grants made under Section 22(1) of the Act will be subject to conditions under Section 22(2) which will restrict the use of sums drawn against the credits referred to in paragraphs 2(b) and (c) above to the matters respectively referred to in those paragraphs. To the extent that I conclude that further funding can and should be made available to the NDA in any given year (pending the outcome of the Commission's investigation) other than in respect of the matters referred to in paragraphs 2(b) and (c), further amounts will (if appropriate) be transferred from the NLIP and any determination which has been made under Section 31(4)(c) of the Act will be revised such that corresponding credits will be made to the NDFA. Amounts equal to these credits will then be remitted to the NDA by way of grant under Section 22(1) of the Act.

6. The figure of £1 will allow the maximum amount to be remitted to the NDA by way of grant under Section 22(1) of the Act while still leaving a credit balance in the account.

Interpretation

7. In this Statement, unless the context otherwise requires, expressions defined in the Act have the meanings given to them by the Act.

8. In addition, the following expressions have the following meanings: economic activities" means the provision of services hitherto undertaken by companies in the BNFL group that might in principle have been provided by a private sector entity, given the existence of a commercial market place and the potential for profit making. NDA's responsibilities in relation to "economic activities" will include responsibilities in respect of economic nuclear liabilities; economic nuclear liabilities" means those nuclear liabilities which exist or may come into existence in respect of sites operated as at the date of this Statement by companies in the BNFL group, excluding those nuclear liabilities referred to in paragraphs 2(b) and (c) above.