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Energy Bill

I am sorry to hear that. We hope to see him before Committee stage is over. The advantage is that we have the pleasure of the presence of the noble Lords, Lord Bach and Lord Davies of Oldham. The amendment sprang from what I had told the noble Lord, Lord Jones, I was going to talk about, and what I talked about at Second Reading. The question is, if you have a contractor who is able to come along and say, ““Look, I can do this at significantly lower cost than you perhaps have thought would be necessary””, is it then open to the company that has set aside funds for decommissioning and waste disposal to go to the authorities and say, ““We don’t think we’re going to need all this. We envisage arrangements that could be substantially less than that””? What is meant by ““the full share of costs””? There was a meeting upstairs a month or six weeks ago, addressed by the Minister for Energy, Malcolm Wicks, who had with him a senior official in the department. I raised that question, which had been put to me by one or two of the companies. It has been part of the Government’s proposal that all the costs of dealing with the legacy waste fall to the authorities—that is, to the Government—and huge estimates of those costs have been made so far, while the new-build companies would be required only to bear their share of the additional costs occasioned by the waste that they will produce. Some of them had wondered whether the full share meant that they would have to pay the full share of the total cost or only of the additional cost. On that occasion, and those who were there may remember this, I got different answers, one from the Minister and one from the official. I said after the meeting to Mr Wicks, ““I think you’ve got to sort this out before the Bill comes to the Lords, because I shall certainly want to raise the matter there””. As I understand it, and perhaps the Minister will be able to correct me if I am wrong, it is intended that the costs that a new-build company will have to provide for will be the costs of disposing of the waste that it produces and the additional infrastructure costs that that waste would occasion. I do not think there is any intention that the new-build companies should make any other contribution to the total cost of the repository. Perhaps the Minister will have a form of words that can put that beyond doubt; if not, we shall have to return to this at a later stage. There is clearly still some uncertainty out there about what is meant by ““the full share””. There was discussion of it in the nuclear White Paper. I shall not bother to read the whole paragraph, but paragraph 2.132 says that some people have, "““questioned the meaning of the reference to the ‘full share of costs’ in the consultation document””." The question then was whether that means simply by volume or by the level of radioactivity, which is another issue. I want to be quite certain that the new-build people are not going to be required to bear any of the costs which would fall to the authorities under the legacy programme and that they will be responsible only for the additional costs that their waste will occasion. Another point that arose from the White Paper is that the Government are very keen that they should learn from international experience. EnergySolutions is a good example of a company with international experience in this area and therefore ought to be listened to. The White Paper goes on to the issue of the setting aside of funds. We have heard about the Nuclear Liabilities Financing Assurance Board, also referred to in the White Paper. I wanted to see what is meant by all this. I do not know if noble Lords have had a chance to look at the consultation paper published last February entitled the Consultation on Funded Decommissioning Programme Guidance for New Nuclear Power Stations. Apparently, what is envisaged is that the sum required to be provided in this funding has a significant risk premium in order to cover the possibility that the costs may be higher, and that the advantage would be that companies could then be certain that they would not be asked for more if it turned out that in the long run the costs were much higher. However, paragraph 210 states: "““Should the actual costs of providing the waste disposal service prove lower than expected, these lower costs will not be passed on to nuclear operators””—" and says by way of reason for this— "““who would have gained from certainty of a fixed price and would not have been exposed to the risk of price escalation””." I understand the logic, but one has to ask what advantage is it to the industry if someone innovative and with international experience—I quoted a moment ago that the Government want to see—comes along and offers a significantly lower cost for the disposal of waste? There could also be a lower cost for decommissioning so that the sums that have been set aside are in fact higher than will be required. What happens then? Would it not be fairer in those circumstances, so as to encourage competition and the reduction of costs, if the companies that had been asked to make this provision to be monitored by NLFAB actually enjoyed some of the advantage of it? My amendment is a peg on which to hang the argument and I do not suggest for a moment that in its present form it could be added to the Bill, but I have raised two questions of substance. First: what is meant by ““their share of the costs”” and does it include any possible share of the costs of dealing with the legacy waste; and secondly, is it really the case that the government intend that companies which can negotiate with an innovating international company, if I may put it that way, to achieve a substantially lower cost is to derive no benefit at all? I beg to move.