Nuclear Sector Deal

Alan Whitehead Excerpts

Wednesday 11th July 2018 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This morning I will concentrate on the debate initiated by the hon. Member for Copeland (Trudy Harrison), which is on the nuclear sector deal, following the publication of the industrial strategy, before making a few other remarks. I congratulate her on securing this debate. She provides an example of one of the pillars of the industrial strategy, which is about place, and during her time in the House she has been a superb advocate for her place in the country in relation to nuclear programmes. Indeed, I served with her on the Nuclear Safeguards Bill Committee, and I learned a lot about the nuclear industry and its associated activities as a result of serving on that Committee and hearing her important interventions.

In her remarks the hon. Lady put the issues in this sector deal squarely on the table. It is good that we have an industrial strategy in the first place. For many years there was no such thing as an industrial strategy in Government—indeed, the Government said that having such a strategy would be a bad idea. Having an industrial strategy document and plan, followed by sector deals, is a considerable advance towards ensuring that industries and centres of industry get collective support among themselves by using their own skills and arrangements, as well as Government support to take that forward. This sector deal has been brought forward very much as a collaborative process. The Nuclear Industry Council and the Nuclear Industry Association produced an early prototype of this sector deal to bring to the Government, and the current deal shows clear signs of that collaboration.

What should we draw attention to in the sector deal? The first thing is the extent to which it highlights our skills and strengths in particular areas of our nuclear industry. As the hon. Member for Barrow and Furness (John Woodcock) said, one of those strengths is the world-beating concentration of decommissioning, research and development, and nuclear development facilities that exist in and around Sellafield and in Cumbria generally. It seems right that the sector deal should seek to strengthen and extend the work of that centre in the UK because—as hon. Members have mentioned—of the possibilities that exist for substantial world contracts, the export of skills, knowledge and knowhow, practical assistance in nuclear decommissioning, and the many other associated activities that can, do, and will stem from that part of the country. I commend the hon. Gentleman’s suggestion that the collaboration between military nuclear and civil nuclear should be extended because, among other reasons, of the crossover of skills and technologies that can result from such collaboration.

Some hon. Members might have thought that my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) made a slight diversion from our discussion this morning, and I have discussed with him for a long time the question of what to do about decommissioning nuclear submarines. That decommissioning effectively comes under a programme in the Ministry of Defence but, as my hon. Friend said, such a programme does not exist in reality. Yet if we were to join together that decommissioning with our decommissioning in Sellafield, using the skills there, we could make enormous progress on something that, as my hon. Friend mentioned, is a dreadful blot on our national landscape—it can be seen on Google. It needs to be dealt with urgently and Sellafield is the place to do it. We should ensure we do that in the not-too-distant future. I should like that included specifically in the sector deal. Perhaps when we get to version 1.2 that will happen. By the way, another enormous centre of nuclear excellence is the Culham Centre for Fusion Energy; I should mention the sector deal funding for it and the Government’s support for nuclear fusion and the work there.

Inevitably, documents have strengths and weaknesses. The weakness of the sector deal document is two-fold. Perhaps the first part of that is not a weakness but a recognition of what needs to be done in the nuclear sector in the next period. I note from the executive summary that there is to be, by agreement,

“a 30% reduction in the cost of new build projects by 2030”

and

“savings of 20% in the cost of decommissioning compared with current estimates by 2030”.

That reflects the fact that as things stand a lot of nuclear activity is just too expensive. Hon. Members have mentioned that the costs of new nuclear build and perhaps the process of bringing new builds into operation are still apparently far too high. Indeed, the national infrastructure assessment for 2018 has recently come out, and it suggests that only one new nuclear build should be signed up to before 2025, because of its analysis of the current relative costs of new nuclear and new renewables. It also suggests that, even with arrangements such as the regulated asset base that the Government are looking at in relation to new nuclear build, costs would be transferred rather than reduced. Certainly if that arrangement meant that consumers bore the same costs, but in advance of the plants coming into operation, which appears to be one mechanism of the regulated asset base arrangement, it would be an evasion of the task ahead, rather than implementation. It seems to me that the commitment in the nuclear sector deal to bring those costs down is important, and that it is an essential element of the way nuclear build would compete in the future with other forms of energy production. That is an important component of the nuclear sector deal.

Finally, I want briefly to draw attention to the advanced nuclear reactors that have been discussed here this morning—small modular nuclear reactors. There is a cost element problem attached to them, too, but they have substantial advocates, for a variety of reasons. There is a suggestion that their modular nature could bring down costs considerably. The document includes a commitment to £44 million, as the hon. Member for Copeland and others have mentioned, to underpin developments on small modular nuclear reactors. That is a bit of a surprise to me, as I recall hearing a suggestion in the 2016 Budget that there should be £250 million of support for them and, indeed, a competition to sort out the best designs. I also recall that in the following two years I did not hear any news about the competition or its outcomes, or about the expenditure of the £250 million, other than a statement by the Minister at the end of 2017 that there might be up to £100 million, not for a competition but for the development of small modular nuclear reactors. As it turned out, the Minister then made a statement that £56 million would be available.

Now, in the nuclear sector deal, the figure is £44 million. That is not to my mind exactly a great deal, from the Government end, for small modular nuclear reactors in the future, bearing in mind what was previously promised and what is in place now. I wonder if the Minister would comment on whether that is because of efficiency gains or the allocation of the money for other purposes—or perhaps because the Government are simply cooling towards the idea of supporting small modular nuclear reactors and have put a reduced sum in the nuclear sector deal. Whatever the reason, Government support for a promising and interesting development seems to have been substantially downgraded. What are the Minister’s thoughts on the appropriateness of that, and might he have further thoughts on how the support could be better deployed in future, on new deals?