Nuclear Power: Procurement

Baroness Verma Excerpts

Monday 11th November 2013 Lords Chamber

[Viscount Hanworth]

To ask Her Majesty’s Government what steps they are taking to ensure that United Kingdom suppliers will be called upon to provide the components that will be required in building any new nuclear power station in the United Kingdom.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, the Government are committed to ensuring that the UK supply chain is able fully to capitalise on the opportunities that will come with the UK’s nuclear new-build programme. Investor confidence continues to grow with projects being taken forward by three consortia. These projects have set out plans to develop around 16 gigawatts of new nuclear power in the UK, which could support an estimated 29,000 to 41,000 jobs across the nuclear supply chain at the peak of its construction.

[Viscount Hanworth (Lab)]

I thank the Minister for that reply. Recently, one of the EDF executives called into question the competence of the UK to supply high-tech equipment for the Hinkley C power station. This contradicts a current capability report of the Nuclear Industry Association, which maintains that, apart from a few large-scale items, the UK could supply almost all of the mechanical and electrical equipment, including the controls and the instrumentation. There are some essential misgivings concerning the possible wilful exclusion of competent UK suppliers. Will the Minister declare more fully what steps, if any, are being taken to protect their positions?

[Baroness Verma]

My Lords, EDF has indicated that around 57% of the opportunities in the construction of Hinkley Point C would come to the UK, while Horizon has estimated that it is expected that around 60% of the value of the first plant will be locally sourced. Nuclear is a key growth industry that provides highly skilled jobs. The 16 gigawatts of new-build capacity planned by industry would create a very large number of jobs, as I said. We in this country have the capability and the capacity.

[Lord King of Bridgwater (Con)]

My Lords, is my noble friend aware that while there will be a wide welcome for the long-awaited return to nuclear power in this country, and not least, that it will be at Hinkley Point, which will make Bridgwater a boom town for many years, there is great disappointment that it is thought that it will not generate any electricity before 2023? Great efforts have been made by many people, not least by the landowner, who in a very constructive approach allowed all the preliminary groundwork to be done before any planning permission had even been given, to try to help this programme forward. Will the Minister ensure that every effort is made in her department to ensure that there is no hold-up with the state-aid permissions that we need to get out of Europe, so that we can get ahead with this programme?

[Baroness Verma]

I absolutely agree with my noble friend. He will, of course, be aware that these conversations are ongoing. Very constructive conversations are taking place and we are trying our level best to ensure that there will be no hindrance or obstruction.

[Baroness Wall of New Barnet (Lab)]

The Minister’s previous portfolio involved skills that are found in many of the businesses—small and medium-sized enterprises—that will act as suppliers. The Government and the previous Government have focused on those businesses, which provide more than 75% of the workforce. They are absolutely ripe for apprenticeships, which again, is another government aspiration. Can the noble Baroness give us more certainty that apprenticeships will not be damaged in the way in which this business is carried out?

[Baroness Verma]

The noble Baroness is right about the skills agenda. We have created the Nuclear Energy Skills Alliance, which brings together all the key skills bodies related to nuclear, to collaborate and co-ordinate all the skills development in the sector. However, she is absolutely right—there is plenty to do. We are pleased that this sector is progressing rather than standing still.

[Lord Avebury (LD)]

My Lords, first, will my noble friend place copies in the Library of the memorandum of understanding signed by GE Hitachi with Babcock and Rolls-Royce, which allows them to participate in the manufacturing of components for the replacement of Oldbury and Wylfa power stations? Secondly, what are the prospects of British industry becoming involved in the two proposals that have been submitted by GE Hitachi and Candu Energy respectively for the use of the plutonium stockpile to generate electricity at Sellafield in Cumbria?

[Baroness Verma]

My Lords, on my noble friend’s first question, I will be happy to put into the Library the information that we have at hand. However, the memorandum of understanding is between two private companies, so I will go back to see if they will be happy to have something put in the Library. On my noble friend’s second question, while MOX remains the Government’s preferred option, we are in active talks with a number of providers. I reassure my noble friend that the conversations are ongoing, but we still have a preferred option.

[Lord Wigley (PC)]

Does the Minister understand that in the context of the proposed new Wylfa B nuclear power station, the likely builders are a Japanese-led consortium led by Hitachi, which has also been looking at building nuclear power stations in Lithuania and possibly other locations on the European mainland? Does she accept that the uncertainty with regard to the future UK membership of the European Union may well mititate against maximising the number of contracts for British companies arising from situations such as that in Wylfa?

[Baroness Verma]

My Lords, the fact is that we have a lot of interest from a lot of companies coming to the UK. We should be very proud that there is so much interest. We have an excellent skills base here and we should welcome all investors to our country.

[Baroness Worthington (Lab)]

My Lords, is the Minister aware that Sheffield Forgemasters recently completed a large-scale forging for a nuclear reactor to be built in South America? The design was Canadian, but it is not a design that is licensed in the UK. Could the noble Baroness give us an update on whether that Canadian design could be licensed here and, if so, when?

[Baroness Verma]

My Lords, it is for operators to decide on the designs and it is for the Government then to approve them, as long as the regulators are satisfied.

[Lord Foulkes of Cumnock (Lab)]

My Lords, the Minister has said that 57% will be sourced in the United Kingdom. Will she tell the House how much of that will be sourced in Scotland? If she cannot do that now, could she write to me giving me some indication?

[Baroness Verma]

My Lords, the noble Lord knows that I will not be able to answer that at this moment. It would be better for me to take the question away.

[Lord Kennedy of Southwark (Lab)]

My Lords, if that question were asked of the United States Government, the German Government or the French Government, I think there would have been a much more robust defence of jobs and companies. Why will the Government not do more?

[Baroness Verma]

My Lords, I have just said to your Lordships’ House that between 29,000 and 41,000 jobs will be made available through what we are doing currently. Of course this is a growing sector and of course we want to see more job growth, but we also want to ensure that we get the right mix of energies in this country and this Government are doing that.