§ 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.
British Energy plc announced on 14 January 2005 that it had successfully implemented the restructuring plan it announced on 28 November 2002.
The Government's overriding objectives in supporting British Energy were nuclear safety and security of electricity supplies. The successful completion of the restructuring has secured these objectives while safeguarding the interests of the taxpayer.
I would remind the House that, as part of the restructuring and in addition to the significant contribution being made by British Energy's other financial stakeholders, government are taking financial responsibility for the company's historic spent nuclear fuel liabilities. The estimated cost to government remains as set out in my Statement to the House on 28 November 2002, i.e. £150 million to £200 million a year on average for the next 10 years, falling thereafter. British Energy will also be making new and enhanced payments, including 65 per cent of its annual free cash-flow, to the Nuclear Liabilities 23WS Fund (NLF) which will be used to pay for the costs of decommissioning the company's nuclear power stations and certain other nuclear liabilities. The Government are underwriting the NLF to ensure safety and environmental protection. The Government's support for British Energy has been approved by the European Commission, subject to certain conditions.
British Energy has relisted its shares and will continue as a public limited company managed by its board of directors and subject to the normal private sector disciplines and requirements. The company will have the freedom to run its business, in terms of corporate, operational and financial policies, subject both to the measures the Government have taken in the restructuring agreements, including monitoring arrangements, to manage its financial exposure to British Energy's liabilities, and to conditions attached to the European Commission's approval of the restructuring aid. The restructuring agreements strike a balance between protecting taxpayers' interests and ensuring these private sector disciplines maximise the company's contributions to its liabilities.
The Government Restructuring Agreement signed on 1 October 2003 has now been fulfilled. It committed the Government to entering into certain legally binding agreements on the Restructuring Effective Date (14 January 2005) and these have now come fully into effect. The principal agreements were set out in my Statement to the House of 14 October 2003 (Official Report, col. 11 WS ). I will be placing copies of the final versions of these agreements on my department's website and in the Libraries of both Houses shortly.