Nuclear Sector Deal

Lord Henley Excerpts

Thursday 28th June 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, with the leave of the House, I should like to repeat an Answer to an Urgent Question given in another place by my honourable friend the Minister for Universities and Science. The Answer is as follows:

“The Business Secretary is in north Wales in Trawsfynydd at this moment launching the nuclear sector deal. The industrial strategy sets out how long-term partnerships between the Government and industry can create significant opportunities to boost productivity, employment, innovation and skills. We committed to agree sector deals with industries that put forward ambitious proposals to boost productivity and earning power in their sector. The Government are today launching the nuclear sector deal, the fifth in a series of deals as part of our industrial strategy.

I should like to take the opportunity to praise the long-standing support and work of the predecessor of the right honourable gentleman, the noble Lord, Lord Hutton of Furness, who has helped facilitate the deal today from industry’s side.

The nuclear sector in the UK is an economic powerhouse currently equivalent in scale to the aerospace industry. It provides highly skilled, long-term employment for 87,500 people and is a driver of regional growth. Nuclear generation currently provides more than 20% of the UK’s electricity supply and its low-carbon reliable baseload power complements the growing renewable portfolio that is enabling the UK to reduce CO₂ emissions in line with our commitments.

The nuclear sector deal announces a package of measures to support the sector as we develop low-carbon nuclear power and continue to clean up our nuclear legacy. This deal is about government and industry working in partnership to drive competitiveness across the nuclear sector. We will use this set of initial actions as a platform for future collaboration and investment in the sector.

The Government have notified Parliament of today’s deal by means of a Written Ministerial Statement, and have deposited a copy of the sector deal in the Libraries of both Houses. This is a good day for the nuclear industry and a good day for Wales, where we are focusing on small modular reactors that can help Wales become a world leader in the sector”.

[Lord Grantchester (Lab)]

I welcome the announcement and this nuclear sector deal, as it will become an important part of the Government’s industrial strategy. It is excellent news for the nuclear industry. Britain was the world leader in nuclear technology, and this has the potential to put Britain back into a more competitive position against other nuclear nations. I stress to the Government that they must deliver on their commitment, announced today, to achieve these aspirations. Huge sums are being invested by the US and China. Will the Government work with these very large programmes overseas?

It is good news for R&D and the international fusion programme at Culham, and for the development of SMRs. That there is a launch event with the Minister, Richard Harrington, in Trawsfynydd underlines the industry’s importance in the north Wales-Cheshire economy, where there is no hard border. Being in the north-west, I know this will be very safe. I ask the Minister whether Trawsfynydd will be the site for a G4 reactor. It is good news that emphasis will be given to innovation. If the UK is to be on the leading edge, the Government must commit the sums necessary.

I ask the minister that his department commit that the Government will look at all technologies in developing better ways for decommissioning and all technologies available for SMR, even established technologies, such as pebble-bed or HTR, which the Chinese will soon be commissioning as the first in the world. Can the Government give these assurances? How deep is the Government’s commitment? Could the UK become a centre for manufacturing?

[Lord Henley]

My Lords, I welcome the welcome of this deal by the noble Lord, Lord Grantchester, and I am pleased to be able to say how happy I am that he is happy that this is good for north Wales and Chester, his part of the world. I cannot give precise confirmation in answer to his question about Trawsfynydd, but I can confirm that there is new money coming in—money for advanced manufacturing and construction programmes from the Government, and money to invest in the national supply chain.

We also expect to see a 30% reduction over the years in the cost of new-build projects and also—very important for my part of the world, west Cumberland—reductions in the cost of decommissioning of some 20% over the years. This is a good deal not just for north Wales but for the whole country.

[Lord Fox (LD)]

My Lords, we generally welcome this announcement, with some reservations. In the Minister’s introduction, not much emphasis was given to decommissioning and waste disposal, which take up a large proportion of our nuclear industry at the moment. Perhaps the Minister can explain how this sector deal will reflect on that.

The Minister also mentioned the number of people employed in the industry, but there is likely to be a shortfall in skills if the expansion, as envisaged by the Government, goes ahead. The need for developing more skills in this industry, as well as many others, is clear. Perhaps the Minister could reflect on that.

Finally, there is a terrible irony in this announcement’s being made in Wales. I feel another Peer twitching behind me because just this week the Swansea Bay tidal lagoon was scrapped by the Government. This was an excellent example of a renewable programme. Does this sector deal reflect on the Government’s cooling even further on renewables?

[Lord Henley]

My Lords, I was wondering when the noble Lord would get on to Swansea Bay. We dealt with that in a Question only the other day. I think there was recognition from all parts of the House, other than on the Liberal Benches, that it would not be wise to go ahead with a project that would cost the consumers of electricity—remember, it is the consumers who pay for that electricity—three times as much as Hinkley Point, which is not a good deal for the people of Swansea or those around it.

As for decommissioning, yes, that is very important. We will continue our work on decommissioning and, as the sector deal makes clear, we are looking, over the next 20 years, or by 2030, for reductions in the cost of decommissioning of some 20%. That is important.

The noble Lord also mentioned the number of jobs in this area and the importance of making sure that we both generate people with the right skills and attract people with the right skills to this country. That is something that we are aware of. Currently, the industry provides long-term employment for some 87,500 people. The deal will potentially support 100,000 highly skilled jobs, in locations from Cumbria to Somerset. We will make sure we have people with the right skills to perform those jobs.

[Lord Cunningham of Felling (Lab)]

My Lords, I welcome the Minister’s Statement. It is the first positive Statement on civil nuclear power we have had for some time. It is a sad reflection that Britain was a world leader in this field and squandered that position, disastrously for future energy policy. Will our existing knowledge and future development of small modular reactors enable Britain once again to be a world leader in future nuclear technology? If so, the Statement is even more welcome.

[Lord Henley]

My Lords, I am grateful to the noble Lord for his welcome for the Statement. Like him, I can remember an occasion when we were world leaders; we both know that, in Cumbria, we still are world leaders in what it has to offer. The noble Lord is right to call attention to the importance of looking at developments in modular reactors. I can reassure him that, as part of this deal, we are providing £56 million to support the development of advanced modular reactors.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I welcome the Statement and, in particular, its focus on SMRs and Wales. I acknowledge the warmth of the statement made, too, by the noble Lord, Lord Grantchester. I declare my interest as an adviser to a nuclear technology company. Can my noble friend the Minister confirm that the Trawsfynydd site is suitable for trialling more than one technology and that the focus on Generation III light water technology does not preclude exploring Generation IV molten salt reactors, which offer potential benefits in proliferation resistance, greatly increased efficiency and the ability to use plutonium waste as fuel, and are already in the licensing process in the United States?

[Lord Henley]

My Lords, I believe my noble friend is correct, but she will appreciate that I was informed about repeating this Answer only some 15 minutes before the House met. I cannot give precise details about the Trawsfynydd site at this stage, but I will write to her with further details. As I said, I think she is correct.

[Lord Wigley (PC)]

My Lords, as one who worked on the construction of Trawsfynydd in 1963, I welcome the Statement but perhaps I may ask the Minister for some further clarity. First, on the SMR programme, does the fact that the announcement is being made in Trawsfynydd today indicate that the location of an SMR reactor is likely to be Trawsfynydd? Secondly, can he confirm that the lessons experienced over a prolonged period with the decommissioning at Trawsfynydd could be the basis for a study of decommissioning in future? Finally, can he give an assurance that additional money will be available for training and education, particularly for institutions such as Bangor University, to ensure that local people have the skills and take up the jobs?

[Lord Henley]

My Lords, if the noble Lord was working on the site in 1963, it is unlikely that he will be offering himself to work there in any future programme.

[Noble Lords]

Oh!

[Lord Henley]

It seems the House would like the noble Lord to be working there; whether he wants to is a matter for him and his family.

As I said in response to my noble friend’s question about the same site, I am not fully up to scratch on this and it would probably be better if I wrote to the noble Lord with further details. As I said in the Statement, my right honourable friend the Secretary of State is there, as is my colleague, Richard Harrington.

[Lord Berkeley (Lab)]

My Lords, the Minister welcomed the various technologies being proposed for future nuclear, but is he aware that the technology being used at Hinkley Point is a French one that is not approved, for safety reasons, in the power stations they are building in France or in Finland? He mentioned the cost of electricity in relation to Swansea Bay, but the cost to the consumer of Hinkley Point will, I believe, be one of the highest of any production we have in this country. Can he make sure that the technology for all these proposed future nuclear stations is proven before massive amounts of money are spent?

[Lord Henley]

My Lords, we have started on Hinkley—that is going ahead and I am satisfied, as is the department, that it is safe. The strike price there was on the high side, but the cost of other proposals being recommended by the Liberal Party—for example, Swansea Bay—are considerably higher and it is right that we look at something of lower cost. We are looking—I cannot speculate on what figures we will get to—to get lower prices for the site at Wylfa in Anglesey. We will continue to do this and that is why we want to go on seeing that 30% reduction in new-build costs between now and 2030. That is what the sector deal is all about.