Energy: Nuclear New Build Programme

Baroness Verma Excerpts

Thursday 7th February 2013 Lords Chamber

[Lord Foulkes of Cumnock]

To ask Her Majesty’s Government what action they are taking following the announcement of the withdrawal of Centrica from the nuclear new build programme.

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

My Lords, the Government are determined to make the UK a leading destination for investment in new nuclear, which will play a key role in our future energy mix. The decision by Centrica reflects the company’s investment priorities and is not a reflection on UK government policy. New nuclear in the UK is a highly attractive proposition, as the recent purchase of Horizon Nuclear Power by Hitachi clearly shows. With the reforms that we are introducing in the Energy Bill, we are confident that we will see investment move forward. In the last quarter alone, alongside the successful sale of Horizon we had the granting of the first nuclear site licence in 25 years at Hinkley Point.

[Lord Foulkes of Cumnock]

My Lords, will the Minister confirm that Centrica is in fact the third firm to withdraw from the new nuclear build programme and that it cited as the reason uncertainty because the Government have not yet set the financial framework for new nuclear build? The Minister again today, like earlier in the week, sounds rather complacent on this. Can she give the House a clear indication of when the Government will make the decisions that will end this uncertainty?

[Baroness Verma]

My Lords, if we are talking about complacency, I would remind the noble Lord that his party was in Government for 13 years and failed to look at long-term investment in the energy sector. This Government have taken that on board. I remind the noble Lord that the decision that Centrica took was, as with the other two companies he mentioned, a commercial prioritisation and nothing to do with UK policy. If the noble Lord will allow me, I will quote Sam Laidlaw, chief executive of Centrica. He said the decision was about the prioritisation of its commercial priorities.

[Lord Jenkin of Roding]

My Lords, I share the concerns about Centrica and discussed them at some length yesterday with EDF. I have a much more serious concern to raise with my noble friend. I am very worried about how the Cumbria county councillors were persuaded to vote against moving to the next stage of a nuclear waste consultation. I will quote from an e-mail that was inadvertently sent to a Copeland councillor, and obviously sent by an anti-nuclear campaigner. It contains a chilling message. It says that they need a campaign to tell the councillors of,

“the threat that they might be personally liable for irrational or reckless decisions, particularly ones which do not put care of their constituency at their heart”.

It goes on that,

“the point is, to scare the crap out of them personally when they go to vote”.

Is that any way to treat a serious government consultation? Why is it no one’s business to try to rebut these mischievous statements that have circulated around the county over the past three months?

[Baroness Verma]

I thank my noble friend for drawing my attention to that. I invite him to forward me the e-mail that he quoted so that my officials might look at it in closer detail. I know that passions were raised on both sides of the argument in Cumbria, but that is right and proper in a democratic process. However, my noble friend is right that a lot of scaremongering and misleading information was distributed out there. Unfortunately, when we go down the road of ensuring that this is a community-led, voluntary process, one of the by-products is that there will be misleading information. I will look very carefully at that and if it is something that I need to raise further and looks as if it is intimidation, I will take it as a matter perhaps for the police to look at.

[Lord Campbell-Savours]

My Lords, what is the status of that proposed project now that Cumbria has said no and yet the districts of Copeland and Allerdale have said yes? Where are we now in this whole discussion?

[Baroness Verma]

My Lords, the noble Lord raises an important point. I have taken the decision to reflect on why the process did not work as well as it should have done. I will be in communication with the councils again to see where we have learnt lessons and where we might have done a little better in our engagement with the broader public and local businesses. The process is the right one. It is a government policy and will remain one. I just need time to reflect on how to make the process better.

[Lord Avebury]

My Lords, reverting to the question of Centrica’s withdrawal, how does this affect the negotiations on the replacement contract at Hinkley Point? Is there any possibility of opening up competition on that site, considering that the contractor is said to be offering a strike price of £100 per megawatt hour for the electricity that will be produced, saddling future electricity consumers with a large additional burden?

[Baroness Verma]

My noble friend obviously has information on the strike price that I do not have because as yet no commitment on strike price has been made. We are still talking and we want to be able to reach a commercial term that is fair, affordable and value for money for all.

[Baroness Smith of Basildon]

My Lords, my noble friend Lord Foulkes spoke of the need to encourage investment in new nuclear. Under current plans we are still below the level that the Government say we need. To get to that level, we do not need investment alone; we also need to ensure we have a highly skilled workforce in engineering, manufacturing and construction. What discussions have the Minister and her departmental colleagues had with the nuclear energy companies regarding apprenticeships and training to ensure that we have the highly skilled workforce we need?

[Baroness Verma]

The noble Baroness is absolutely right. We need to ensure that our supply line is fully equipped and that we have the right skills in place as we move forward with nuclear. We are mindful that we are working very closely with the appropriate skills sector groupings on skills and we are making progress. We will give a further, fuller answer once we have got a more detailed plan in place.