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British Nuclear Group

After the previous debate on MPs’ pay, it is good to turn to the calmer and less controversial waters of nuclear energy. I welcome the opportunity to comment on the future of the British Nuclear Group. My hon. Friend the Member for Copeland (Mr. Reed) is a great commentator on nuclear policy, and his expertise and experience are always worth listening to. In addition, he has a great reputation in his community, as I witnessed when I visited Sellafield some months ago. The former Secretary of State, who is now Secretary of State for Education and Skills, announced our intentions in a written statement to the House on30 March. That statement made it clear that we had approved the BNFL board’s recommendation that it should sell BNG through a competitive sale process commencing in April 2007 or earlier. However, there has been much media speculation about how the competitive sale will be conducted. Some of that speculation has been accurate and some of it less so, and my aim today is to provide some clarity on the matter. I recognise that this debate takes place against a backdrop of some interest in the future of nuclear energy. I shall not say too much about that wider issue, save that I am conducting an energy review on behalf of my Secretary of State and the Prime Minister, and that it will report on these critical questions by the summer. My hon. Friend the Member for Copeland rightly made some very positive comments about BNG and the Nuclear Decommissioning Authority’s achievements since it commenced operations just over a year ago. I should like to echo those sentiments. BNFL did an admirable job in restructuring itself and preparing the ground for the NDA. The management and staff at BNG have coped very well with the transition. I am tremendously encouraged that the NDA’s stewardship of the UK’s nuclear clean-up has already yielded significant efficiency savings at BNG’s sites. It is a very good start, but of course we are looking for very much more. That is why we believe that a competitive sale is the right route. After careful deliberation, the BNFL board determined a sale to be in the company’s best commercial interest and to represent BNG’s best chance of operating successfully in the commercial market created by the Energy Act 2004, thereby providing long-term stability for staff. Most important of all, though, the company also convinced us that it would be good for the taxpayer because it is good for the nuclear decommissioning and clean-up programme. I shall be happy to discuss with my hon. Friend the Member for Copeland the reason why the option of a public-private partnership was not pursued, but essentially it was because BNG would not have the required critical mass. The decision for Government was not straightforward, and was taken only after extensive consultation with key stakeholders. We were especially keen that the sale should not impact negatively on the NDA’s mission, and we have moved forward carefully to ensure that we have fully considered the issues. However, I am absolutely confident that we now have the right result, and one that will contribute to improved clean-up performance for the NDA by introducing external expertise more quickly. The NDA’s competition timetable reflects its broader strategy to prioritise the tackling of the highest hazards. Rather than run its own separate competition for Sellafield, the NDA was able to accommodate the sale by letting a new five-year contract for that site. That will commence next year, at the point when the new owner acquires BNG. The NDA and BNFL will thus work closely throughout the competitive sale process. The aim will be to ensure that the successful bidder is the best available to improve performance substantially, particularly at Sellafield. Therefore, the selection criteria will be focused mainly on issues such as safety, reducing high hazards, driving down costs through better planning and more innovation, accelerating clean-up and improved managed capability. This debate is not the occasion to discuss the problems involved in nuclear decommissioning, but it is worth noting that they represent some of the really big challenges facing this country in the coming half century. Over the summer, the expert group CORUM will present a report with proposals on what might be called the final resting place for nuclear waste. Those are critical issues.