Joan Walley
Main Page: Joan Walley (Labour - Stoke-on-Trent North)
Michael Fallon
I will describe in some detail the arrangements for the scrutiny of any deal done or any negotiations concluded at Hinkley, but I would suggest to my hon. Friend that Parliament is pretty good at scrutinising such arrangements, including through its various Committees. Likewise, it is of course also open to the National Audit Office to provide scrutiny.
Michael Fallon
I must make some progress, if the hon. Lady will forgive me.
The third improvement I am suggesting through amendment 52 is to place a duty on the Government to publish a report each year setting out how they have exercised their powers and carried out their functions under part 2 of the Bill. I hope that that provides particular comfort to my hon. Friend the Member for Daventry, who, through amendments 176 and 177, is looking to bring forward the five-year review in clause 50 and require speedy progress, but the review that he suggests would take more than one month, while enough time must elapse if we are to collect sufficient data to make an informed judgment. On his amendment 178, however, I can assure him that we will look closely at the impact on different consumers when carrying out the five-year review, as we already do with our impact assessments on electricity market reform. Finally, Government amendment 66, which follows a helpful suggestion in Committee—again from the hon. Member for Brent North—will bring the emissions performance standard within the scope of the review.
I turn now to the counterparty arrangements for CFDs and investment contracts. I have tabled several amendments on this topic—again, many of them responding to very reasonable points made in Committee. Amendments 53 to 55 and 74 to 76 set out the circumstances in which we might need more than one counterparty, while amendments 56 and 77 extend the notice period before a body can withdraw its consent to act as counterparty. Amendments 57, 62, 63, 78, 82 and 83 make minor changes to avoid any confusion over the use of the terms “obligations” and “liabilities”, while amendments 58, 65, 85 and 86 create a statutory guarantee that the counterparty will exercise its functions to ensure CFD and investment contract liabilities are met and place a duty on the Government to provide the powers to do this.
Michael Fallon
Of course I stick to the line. On this side of the House we all stick to the terms of the coalition agreement, and it is important that we keep doing that. I do not see any reference in the Bill to the word “subsidy”. When the hon. Lady sees the terms of any contract that might be concluded with EDF for Hinkley, or indeed with Horizon Hitachi for the next two stations, she will see that the word “subsidy” is not involved.
Amendment 25 would prohibit the Government from underwriting, or providing in investment contracts, guarantees to cover nuclear construction costs. Let me reassure the House, if there is a concern about construction cost overruns, that such overruns for new nuclear will be borne by the developer. There are two scenarios, however, in which it might be reasonable for certain construction risks to be shared. They include cases involving less mature technologies such as carbon capture and storage, reflecting the high level of uncertainty around those construction costs, and those relating to certain events outside a developer’s control, such as specified change in law events. An example could involve a law that specifically discriminated against nuclear.
More widely, I can assure the House that we will only sign a contract in respect of Hinkley that is fair, affordable and represents clear value for money for consumers. Amendments 26 and 27 would delay the Government’s making CFD regulations relating to nuclear power or signing an investment contract until the National Audit Office had first carried out a value-for-money assessment of nuclear power or the relevant investment contract. It would not be right to hold up the delivery of a major Government programme that is vital for economic growth and jobs across the country until the NAO had undertaken a review. We have already put a significant amount of expert scrutiny into the decision-making process to ensure a robust evidence base, and will be consulting on the draft electricity market reform delivery plan to augment that.
More generally, the major CFD regulations will be consulted on and will be subject to affirmative parliamentary approval. Investment contracts are already subject to close scrutiny by external advisers to ascertain whether they represent value for money. Combined with my earlier commitments and amendments to the Bill, this will ensure transparency of investment contracts.
Joan Walley
Is there not a concern about the role of the National Audit Office in all this? There is no way of achieving transparency during the negotiation process, and unless we accept the amendments proposing a panel to oversee the process, there will be no way of finding out what is being agreed before we are presented with a fait accompli.
Michael Fallon
My first answer to the hon. Lady is that there is nothing to prevent the National Audit Office from looking into anything it wants to. The Government cannot control that, and nor can she. Secondly, I have already said that summaries of the advice will be published, and it will be perfectly possible for Committees of this House to look into these matters and satisfy themselves that the appropriate advice has been taken.
Joan Walley
Is not part of the problem the fact that the National Audit Office and the Comptroller and Auditor General do not have statutory powers to scrutinise public spending on behalf of Parliament before the negotiations have been completed?
Michael Fallon
I am not sure that is wholly right. I think that the NAO has, as I recall, already been looking at High Speed 2—before the contract for it has been placed.
Michael Fallon
I want to be fair to the hon. Member for Brighton, Pavilion (Caroline Lucas), too, but I give way again to the hon. Member for Stoke-on-Trent North (Joan Walley).
Joan Walley
I am most grateful, but the point is that while the Comptroller and Auditor General might consider doing a review once a negotiation has been struck, at that stage it is too late to understand what has been included. We thus have a situation in which the Minister should perhaps comment on the role of Parliament in scrutinising this issue.