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Finance (No. 2) Bill

As I understand it, the transitional arrangements came in because the European Commission started examining whether there was or is unauthorised state aid in the UK for the nuclear power industry, part of which has been privatised and more of which will be privatised. Whatever the proponents of the nuclear industry say, we have what I would regard as a dinosaur industry that is using technology, even with the pebble-bed reactors and so on that it is talking about—technology that has been around in Germany since, I think, 1958, but which is supposed to be the new generation of nuclear power—that is about 50 years old. The technology has never been operated anywhere without state subsidy, directly or indirectly. The proponents of a new generation of nuclear power stations are looking forward rather than backwards, which the clauses do, to a situation where there will not be state subsidies. I am a little cynical about that. I have heard it all before. Throughout my adult life I have heard about how there would not be state subsidies, and that we would have electricity too cheap to meter, for example. That never worked out. We are talking about old technology. It is about 50 years old, as I have said. That is the basic design, however much we talk about advanced gas water and all that, heavy water and can-do reactors, for example. It is, as I have said, old technology. It works in as much as it produces electricity, but it does not work in that it is not economic. Even with today’s high energy prices, there are serious questions to be asked about whether the nuclear power that we have, let alone that that we may have in future, is economic, given the direct subsidies that we have for the existing nuclear fleet of power stations and the possible subsidies, whether on insurance or guaranteed purchase of electricity, that we may have for future nuclear power stations. As for the environment, we would be much better spending the money on energy conservation and renewables than on a new generation of nuclear power stations, but that is not a debate for today. The debate is whether clauses 99 and 100 are directly or indirectly a hidden subsidy for the nuclear industry that already exists. I hope that today, or perhaps by writing to me, my right hon. Friend the Paymaster General will indicate what the fiscal effects of the two clauses will be on the Government's net balance sheet. The explanatory notes talk about avoiding incurring corporation taxes and a company acquiring taxable losses. I wanted to get some idea for the entire industry, in as much as it is state owned in the UK—that is pending sell-off of larger chunks of it than have already been sold off—whether corporation tax charges that might be avoided by means of clauses 99 and 100 will be greater than the acquired taxable losses that the clauses facilitate in a sort of wiping-out exercise. My right hon. Friend the Paymaster General, perhaps to use my words rather than hers in Standing Committee, referred to these measures being, in a sense, a recirculation of Government money. There is the fiscal net effect—that is weighing the avoided corporation tax and the avoided tax right-offs through acquired losses and determining whether that is even or whether there is an imbalance. If there be an imbalance, what is it? That will enable us to have some idea at this stage of whether there be yet another subsidy to an industry that is financially, let alone environmentally, a failed industry, or whether this is an accounting exercise that results in even stevens at the end. I hope that my right hon. Friend the Paymaster General will elucidate. If not—I realise that there may be complex figures—I should like to receive a response in writing at a later date.