Nuclear Energy (Financing) Bill

Lord Oates Excerpts

Committee stage
Tuesday 8th March 2022 Grand Committee

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, as well as of course supporting the amendments spoken to by my noble friend Lady Wilcox, I support the amendments spoken to by the noble Lord, Lord Vaux. In fact, he is in danger of changing my views about hereditary Peers—these debates are difficult things.

I support him on two counts. The first is in relation to beneficial ownership. Could the Minister say if this would cover ensuring that we could check whether countries we do not want to own these power stations are setting up companies in tax havens—particularly the Crown dependencies and overseas territories we have responsibility for? That has been happening far too often and we need to clamp down on that.

Secondly, I support him because I too was concerned about the scope of the Bill. I support what he said, and I am sorry that he was not allowed to table the amendment he suggested; I hope it will be picked up. I had a little problem in tabling my amendment; I had to change it and the one I have got down is not exactly what I wanted. I will come back to that later. The scope of the Bill has unfortunately been drawn far too narrowly. It deals with the purposes the Government want and are concerned about, but it does not allow us to deal with some of the wider aspects. So there we are—I support a hereditary Peer on two counts. It is a red letter day.

[Lord Oates (LD)]

My Lords, I will speak briefly on this group, particularly to Amendments 2 and 9 in the name of the noble Lord, Lord McNicol of West Kilbride, which I have also signed. I also support the amendments in the name of the noble Lord, Lord Vaux. Like the noble Baroness, Lady Bennett, I come at this from a different perspective from him, but it surely must be right that we are able to identify and verify the ultimate ownership.

As the noble Baroness, Lady Wilcox, set out, Amendments 2 and 9 seek to ensure that a nuclear power station cannot be owned or part-owned by a company controlled by a foreign state and being operated for investment purposes. However, I was a little surprised to hear her say that the amendment would cover EDF, because that was not my understanding. My understanding was that the amendments would not cover EDF, which is not operating for investment purposes, and that is why

“and operating for investment purposes”

is critical in the definition—but it would cover China General Nuclear Power Group, which does operate for investment purposes. I understood that was why the amendment was tabled and drawn in that specific way, but we can perhaps discuss that further later.

The main point here is the general concern that has been expressed on all sides of the Committee about the involvement of the Chinese state in critical national infrastructure, particularly nuclear. As we know, it currently has a 35% stake in Hinkley C and will have a proposed 20% stake in Sizewell C if that goes ahead. So I imagine that, regardless of our wider views on nuclear, we are all concerned about this issue and need some clarity from the Government on their position on this. I hope that the Minister will be able to tell us how the Government intend to proceed with regard to these matters and also answer the important questions asked by the noble Lord, Lord Howell.

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

First, I thank everyone who contributed to this important and well-structured debate. I also pay tribute to the noble Baroness, Lady Wilcox, for her valuable contributions and for stepping in at the last moment to substitute for the noble Lord, Lord McNicol; having picked up a difficult and complicated subject at such late notice, she did extremely well in moving the amendment.

This group includes Amendments 2, 9, 11, 19, 22 and 24, originally tabled by the noble Lords, Lord McNicol, Lord Oates and Lord Vaux. They have been grouped together because they all address in different ways the ownership of nuclear companies that ultimately may benefit from the RAB model. Let me be clear at the outset, as I was at Second Reading, that the Government emphatically do not support investment in our critical infrastructure at the expense of national security. There is no compromising on that point and I hope to reassure all noble Lords who have spoken during this discussion shortly.

The general purpose of this Bill is to broaden our options when financing new nuclear projects and to widen the pool of potential investors; that is widely understood. It is our expectation that doing this will reduce our reliance on state-owned developers to finance the construction of new nuclear power stations. So I do not consider that Amendment 11 and, as a consequence, Amendment 22 are necessary, for the reason that designation is a robust and transparent process. I make a similar case with regard to Amendment 24. The Committee can be assured that appropriate and robust due diligence will be carried out through to the financial close of every single project, in particular following a capital raise where the financing structure of the project may change as new investment is introduced.

I assure noble Lords—particularly my old sparring partner, the noble Lord, Lord Foulkes—that the Government have strong oversight of foreign ownership in nuclear projects as a result of the National Security and Investment Act, which includes a wide-ranging ability to call in for assessment qualifying acquisitions if, in our opinion, there are any national security concerns. These are wide-ranging powers. The noble Lord will be aware that we deliberately did not define “national security” during the passage of what became that Act to give ourselves a wide range of flexibility on this subject.

I should add that the Secretary of State may also apply any conditions that he deems appropriate to the designation of a nuclear company—conditions that, if not met, may lead to the company having its designation revoked. Let me also stress—I made this point in a letter to the noble Lord, Lord McNicol—that it is the Government’s intention to take a special share in the Sizewell C project, assuming that the negotiations are successful and the project proceeds to a final investment decision.

I note the intention of the noble Lord, Lord Vaux, that we should legislate for this sort of safeguard, but I caution him that it is right that the terms of the special share should be negotiated as a commercial agreement, according to the circumstances of every particular RAB project. The projects might be different when they are negotiated, so I think that imposing constraints in primary legislation would be too severe.

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[Lord Wigley (PC)]

I am grateful to you, Lord Chairman. As I was saying, my Amendment 17 paves the way for my Amendment 20, which writes into the Bill, on page 3, line 13, a duty on the Secretary of State to impose conditions that provide: first, for pinpointing responsibility for the eventual decommissioning of a project; secondly, for specifying the extent of the nuclear company’s liability for decommissioning and rendering the site safe; and, thirdly, for providing that all residual costs for decommissioning, over and beyond those shouldered by the nuclear company, are paid by Parliament.

This amendment deals head on with one of the arguments used, sometimes very effectively, by the opponents of nuclear power concerning the cost of decommissioning nuclear power stations and the danger, of which local communities are understandably fearful, of the site of a nuclear power station being left as a radioactive hulk. They are also concerned that under- takings given at the time when planning consent was approved might just be abandoned, with the local community being left to deal with a problem way beyond its ability to handle.

We see at Trawsfynydd today, over three decades after the ending of the generation of electricity, the hulk of the station still there. It is still radioactive and still awaiting full decommissioning. In 2020, it was announced that there would be a new programme for the demolition of the reactor buildings and that the site would be fully cleared by 2083—yes, another 60 years. If the Government are serious about bringing forward another programme of nuclear power stations—as colleagues will know, I support that, because I believe that it is the way to tackle the global warming issue—they must show that they are prepared to take on the ultimate responsibility of rendering the site safe, clean and in a condition acceptable to the local community.

Part of the responsibility for securing this must, of course, be placed on the plate of the nuclear company; after all, if it is to make money from the site, it has a moral duty to clear up the station when it has ended the generation of electricity. But such companies can easily walk away from their responsibilities and the buck must surely stop with Parliament for the residual work of clearing up and rendering safe the site that the Government and Parliament have approved.

This amendment tests the Government’s resolve on this issue. If they are serious about having a new programme of nuclear power stations, they must grasp the nettle and write these, or equivalent provisions, into the Bill. I look forward to their response and, in the event of them failing to give adequate, bankable assurances, I give notice of my intention of returning to this issue on Report and pressing an amendment along these lines to be written on the face of the Bill for MPs to further consider.

[Lord Oates (LD)]

My Lords, I apologise for my delay in arriving; I misunderstood and thought that the Committee was adjourned until the end of the special session, which was slightly delayed.

I am pleased to follow the noble Lord, Lord Wigley. Amendment 3 in my name and that of my noble friend Lord Teverson would require a geological disposal facility, or GDF, to have been constructed in the United Kingdom and be operational before the Secretary of State could designate a nuclear company under this Bill. The amendment’s objective is to bring some focus to the issues of nuclear waste and decommissioning, which were largely and curiously absent from the debate at Second Reading.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

I am happy to explore this further out of Committee.

[Lord Oates (LD)]

I thank noble Lords—some more than others—for their contributions to this debate. I particularly thank the noble Lord, Lord Howell, who, while we disagree strongly on these issues, addressed nuclear waste seriously. One of my purposes in tabling Amendment 3 was not only to expose issues about and have a proper discussion around the costs of a geological disposal facility but because it concerned me, at Second Reading, that there was little focus on waste.

I perhaps should have declared an interest at the beginning as, many years ago, I acted as an adviser to the NDA. While I do not pretend to be a scientist, I have some understanding of this and say gently that there are many people, on all sides of this debate, who have an understanding and take different views. Noble Lords should not make assumptions about their greater knowledge to underpin their enthusiasm for nuclear.

On the specific point of my party’s position on this—again, rather than addressing some of the issues, we seemed to get into a rather unnecessary partisan issue—different parties have different views. As my noble friend Lord Stunell pointed out, the agreement in the coalition was no public subsidy for new nuclear and that is the position we took.

The noble Viscount, Lord Hanworth, for whom I have great respect, was uncharacteristically partisan. He told me that I could not have it both ways, but I gently suggest that he cannot have it both ways either. If the issue of nuclear waste is of such marginal concern and I should not be bothering the Committee about it or the costs of it, why are we intending to spend potentially £51 billion—I imagine much more by the time we get to it—on a geological disposal facility? The noble Viscount said, “Well, there are things happening”, but there have been things happening for a long time on the GDF. As my noble friend Lord Stunell pointed out, we have gone backwards in many ways. I have also heard some argue, “Oh, actually, we do not need a geological disposal facility. That solves it, because then we do not have to worry about the costs of that or the difficulties of securing it.” That is not the view of the majority of people I have spoken to, and I have spoken not only to those who are opposed to nuclear but to those involved in the nuclear industry. Certainly, the international view and the international experience is that such a GDF is required.

All I would ask of the Committee and the Government is, if they are intent on going down the road of nuclear—I am quite open that I am opposed to it, not for some ideological reason or from radiophobia but for some very practical reasons relating to the problems; they are not about encased waste, which you can standby or store for 100, 200 or possibly 300 years, but about long-term disposal, as talked about by my noble friend Lord Stunell, the noble Baroness, Lady Bennett, and others—

[Lord Foulkes of Cumnock (Lab Co-op)]

Is it not the case, when we are dealing with the disposal of waste, that more than 90% of it is already there, coming from the old Magnox reactors, and the new nuclear reactors produce relatively small amounts of nuclear waste?

[Lord Oates (LD)]

I have heard this from others, and the argument seems to be, “Well, we’ve created such a mess already that it doesn’t make much difference if we create any more.” They may create less waste than the old Magnox reactors, but all I am asking is that, before we create more of that waste, we have a way of disposing of it. It is important that we take that seriously, whether we are pro-nuclear or anti-nuclear. We will not convince people unless we deal with this sensibly. In terms of this Bill, we cannot know the real costs unless we understand the costs of construction and operation.

[Baroness Worthington (CB)]

My Lords—

[Lord Oates (LD)]

I say with respect to the noble Baroness, Lady Worthington, that she has intervened on many occasions and we probably need to move on. I just ask that these matters be taken seriously and that when people discuss nuclear waste they think about it in terms of the very long term over which it has to be dealt with and the fact that we do not yet have that GDF and cannot possibly know the costs of it. I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

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[Baroness Worthington (CB)]

My Lords, I will speak briefly on Amendment 4, as much of what I was going to say has already been covered. I have some sympathy with this amendment, as transparency is nearly always good and it would benefit the industry to have a thorough description of the value of investing in nuclear on this and other scales, so that we have it as an option as we combat climate change and seek to deliver affordable power to the nation.

As the noble Lord, Lord Howell, pointed out, value is subjective. Therefore, it would be hard to use it as an objective way of saying that this should not go ahead. What value does Switzerland currently place on its electricity grid, which is almost 100% hydro and nuclear? That means that, despite its location in the centre of Europe, Switzerland is feeling incredibly safe in these troubled times. What value does it place on that? It is of huge value to Switzerland.

Similarly, the social cost of carbon rapidly needs to be revised as we realise that the impacts of climate change are happening far faster and at far greater cost than we ever thought. How do we factor that into value? Transparency is important and I would welcome a much more open discussion about the value that these large-scale nuclear power projects deliver for us. You can look at the levelised cost of electricity, but I suggest it is not the most important factor. You can pay a lot less for a tricycle than for a tractor, but they do not perform the same job. You must compare like with like.

With renewable technologies you have rapid deployment but very diffuse sources of energy, large land take and intermittency, which then requires a substantial extra cost on the grid for levelling when the sun is not shining or when we have periods of no wind, which does happen in Europe—it happened recently, actually, and contributed to the high gas prices we have seen. Let us have that discussion. I feel confident that the project we are talking about here, Sizewell C, will provide a great value for the money we are about to spend, not least because 50% of its additional cost comes from its financing, as has already been stated. That is a huge overhead, because these are capital-intensive long projects. This Bill will help reduce that and increase the value for money.

We now have two reactors under construction today. We can look at the costs of those to see how they transfer to subsequent projects that are funded under this more efficient mechanism. I have been informed about and questioned EDF about its cost overruns. The costs of the two reactors being built today are in line with what you would expect if you were building a huge construction project through the period of Brexit and Covid. Nearly all the inflated costs are true of all big infrastructure projects and are not unique to the nuclear project currently under way. So I would welcome having this conversation. I think transparency would be a friend of the industry and I therefore have some sympathy with this amendment.

[Lord Oates (LD)]

My Lords, I will concentrate in particular on Amendment 6, addressing nuclear outages, and Amendment 37, which would protect recipients of universal credit from being liable to the levies under this Bill. I support the amendments in the name of my noble friend Lord Foster of Bath, and I am slightly bemused about why it is not recognised that we should understand the basis of the value for money test, given that it is in the Bill.

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Moved by

[Lord Oates]

5: Clause 2, page 2, line 14, at end insert “and has laid a report before Parliament setting out the reasons for that opinion, including—
(i) an estimate of the electricity price payable to the company over the period during which the nuclear energy generation project is generating electricity, and the modelling, assumptions and all relevant material underlying such an estimate;(ii) an estimate of the regulated asset base charge payable by consumers in each year until the nuclear project is generating electricity, including the modelling, assumptions and all relevant material underlying such an estimate;(iii) an estimate of the costs of decommissioning the project, how such costs will be met, and the modelling, assumptions and all relevant material underlying such an estimate.”Member’s explanatory statement
This amendment would require the Secretary of State to publish a report setting out the reasons for their opinion that designating the nuclear company is likely to result in value for money.

[Lord Oates (LD)]

My Lords, I will speak in particular to my Amendment 5, but I support all the amendments in this group aimed at greater transparency and accountability, particularly those in the name of my noble friend Lord Foster of Bath. I will speak briefly, as we have already discussed many of the issues on which Amendment 5 touches. As we heard previously, Clause 2(3)(b) of the Bill requires that the Secretary of State

“is of the opinion that designating the nuclear company in relation to the project is likely to result in value for money.”

The opinion of the Secretary of State is, no doubt, valuable, but what would be even more valuable for Parliament and the public is to understand what that opinion is based on, in order to be reassured that it is not simply an assertion of policy preference.

We spoke in Group 3 about the vast, full-life costs of nuclear generation when decommissioning is taken into account. The public would want to know that these costs are fully taken into account in the calculations of the Secretary of State when arriving at his opinion. In addition, it would be important to understand how the possibility of significant cost and time overruns would be factored in as well.

Amendment 5 seeks to address these issues by requiring the Secretary of State to publish a report setting out the reasons for their value-for-money opinion. Such a report would, hopefully, give Parliament and the public reassurance that these matters have been properly considered before a decision is taken to impose further costs on energy bills. I beg to move.

[The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)]

Before I formally call this amendment, I need to inform the Committee that there is a mistake on the Marshalled List. Amendment 11 should begin:

“Page 2, line 14, at end insert—”.


In relation to Amendment 5, the amendment proposed is:

“Page 2, line 14, at end insert”


the words on the Marshalled List—and Amendment 11 would come at the end of that.

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[Lord Callanan (Con)]

I will start with Amendments 5 and 27, laid by the noble Lords, Lord Foster, Lord Wigley, Lord Oates and Lord Teverson, and the noble Baroness, Lady Bennett. It will not surprise the Committee to know that I have reservations about how these amendments would operate in practice. On Amendment 5, for example, the requirement to publish estimates of the costs payable by consumers at the point of designation would risk undermining the independence of Ofgem, which has responsibility for determining a nuclear company’s allowed revenue in accordance with its modified generation licence.

Moreover, the obligations to report on the price of electricity, or the minimum floor price, referred to in Amendment 27, simply do not align with the reality of how we expect the RAB model to operate in practice. Under the model, there is no minimum floor price. Ofgem, in its role as the regime’s economic regulator, will need to determine the revenue the project is entitled to receive, in accordance with its modified electricity generation licence.

Finally, on decommissioning costs, we already have robust legal requirements in place in the Energy Act 2008, which require an operator to have a funded decommissioning programme in place before construction can commence on a new nuclear project. This must set out the operator’s costed plans for dealing with decommissioning and waste management. For these reasons, I am unable to accept the amendments.

Turning to the comments made earlier in the debate by the noble Lord, Lord Wigley, under the RAB model, the regular price reviews would provide an opportunity to assess the performance of the FDP, and adjustments to the operator’s allowed revenue can then be made should any potential deficiency in the fund be identified. This will deal with the noble Lord’s concern, minimise any chances of a fund shortfall and ensure the operator retains its responsibility to meet the costs of decommissioning so they do not fall on local communities. I hope that this provides the reassurance that the noble Lord was seeking.

Amendments 12, 18, 25 and 32, from the noble Lords, Lord McNicol, Lord Foster, Lord Oates and Lord Teverson, and the noble Baroness, Lady Bennett, are aimed at obliging the Secretary of State to publish various pieces of information related to the functioning and implementation of the RAB regime. I fully understand noble Lords’ desire for more information, but think this is already addressed in the Bill.

On the publication of licence modifications, Clause 6(9) already provides that modifications made under Clause 6 would not come into effect unless a revenue collection contract was entered into with the nuclear company. Publishing them as soon as reasonably practicable will provide adequate opportunity for scrutiny.

On Amendment 12, the Bill already obliges the Secretary of State to publish a statement setting out how they expect to determine whether the designation criteria have been met. This statement will provide further explanation as to how the Secretary of State expects to determine whether the development of a project is “sufficiently advanced”. While, as I said, we will publish a statement in due course, I can tell the noble Lord, Lord Foster, and the Committee that we would expect it to include consideration of a number of factors, including, for example, the progress of the prospective project through the important planning process.

On Amendment 18, where it is assessed that it would be appropriate for development funding to be included in the calculation of a nuclear RAB company’s allowed revenue, this would in turn be reflected in the company’s modified licence. Outside of the RAB structure, the Government may choose to provide development funding to projects to mature technologies and de-risk the development and construction phases. However, as this is not intended to be funded through the RAB scheme, it would be inappropriate to include information requirements about it in the Bill. They will be published in other quarters.

On Amendment 25, Clause 6(2) already states that the licence modification powers can be used only for the purpose of facilitating investment in the design, construction, commissioning and operation of nuclear energy generation projects. The Secretary of State may not exercise the powers for any other purpose. This is aligned with the consideration that the amendment discusses. I believe that the transparency processes already included in the Bill, the obligation to publish a statement on the designation criteria and the opportunity for scrutiny before the designation and licence modification powers may be exercised render these amendments unnecessary.

The final amendment on transparency is Amendment 28 from the noble Lords, Lord Foster and Lord Oates. It seeks to make the licence modifications necessary to implement the RAB model for a nuclear company contingent on approval by the House of Commons of a report about consumer bill impacts.

Bringing a project to the point where licence modifications can be made is likely to require significant investment. I submit that making a project subject to a parliamentary vote at that very late stage of licence modification would add huge uncertainty to the outcome of developers’ investment. This additional uncertainty would make it very much harder to bring forward projects —which is possibly the purpose of the amendment—and lead to either an absence of new projects or the costs of financing being raised significantly to take account of the increased risks. That would inevitably result in much worse value for consumers. The amendment could therefore defeat the policy objective of the Bill: to secure financing for new nuclear projects in a way that could deliver better value for money for consumers.

To reiterate, in rejecting the amendments put forward, the Government are not attempting to hide from challenge or scrutiny. Through this Bill, we have created a clear and transparent process for implementing the RAB model. It will allow for the voices of experts and stakeholders to be heard and appropriate consultation to be carried out. That will help ensure that the model works for the industry and, above all, for consumers. I therefore hope that noble Lords will not press their amendments.

[Lord Oates (LD)]

My Lords, I will speak briefly as time is marching on. I think the Minister told us that the reason why Amendment 5 would not work is basically that the Government cannot tell us how much this will all cost the consumer, which is one of our key worries about this means of financing.

On Amendment 12 and the definition of “sufficiently advanced”, my noble friend Lord Foster raised a number of specific issues in relation to Sizewell C and asked whether, in view of those, the project would be regarded as sufficiently advanced. The Minister notably did not answer that question but repeated his previous statement that the Government will publish the designation criteria “in due course”. Again, what he is telling us is that the Government will not tell us what those are before they expect noble Lords to vote on the Bill. As my noble friend said, whatever one’s views for or against nuclear power, that is surely not a way to do legislation.

I hope that the Minister will consider carefully all the issues that have been raised in this group. If you are pro nuclear, I would have thought that transparency was a good thing, but, certainly, I hope that he will consider these issues and come back with some clearer answers for us on Report. With that, I beg leave to withdraw my amendment.

Amendment 5 withdrawn.

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Moved by

[Lord Oates]

33: Clause 13, page 11, line 27, at end insert—
“(A1) The primary duty of the Secretary of State is to publish all material relevant to—(a) costs that may be incurred by the taxpayer arising from any provision of this Act,(b) the determination of the regulated asset base charge that may be levied on consumers under the powers in this Act, and(c) the cost to consumers of electricity produced by the project.” Member’s explanatory statement
This amendment would place a primary duty on the Secretary of State to publish all material relevant to (a) costs that might be incurred by the taxpayer arising from any provision of the Act; (b) the determination of the regulated asset base charge that may be levied on consumers under the powers of this Act; and (c) the cost to consumers of electricity produced by the project.

[Lord Oates (LD)]

My Lords, Amendment 33 and the subsequent amendments in this group seek to ensure that the Government cannot refuse to publish information that is in the public interest without compelling grounds. As it is currently written, Clause 13(2)(a) allows the Secretary of State to withhold any relevant material which he or she believes

“would … prejudice the commercial interests of any person”.

This is an enormously wide loophole which makes no attempt to qualify the degree of prejudice to the commercial interests of that person or to balance that with the public interest in the disclosure of such information.

Amendment 33 would establish a primary duty on the Secretary of State to publish all relevant material. Amendment 34 provides that material may be excluded only in exceptional circumstances. Amendment 35 would insert the word “seriously” so that the test is whether disclosure would seriously prejudice commercial interests, not the much weaker test currently in the Bill. Amendment 36 would require that, should the Secretary of State exclude material on the grounds of serious prejudice to commercial interests, he or she must make

“a statement to Parliament that the prejudice to commercial interests”

set out in subsection (2)(a)

“is of such seriousness that it outweighs the”

overwhelming

“public interest in … the publication of material relevant to any”

costs that may be incurred by the taxpayer

“arising from any provision of this Act … the determination of the regulated asset base charge that may be levied on consumers under the powers in this Act, and … the cost to consumers of electricity produced by the project.”

It is critical for proper public scrutiny that Ministers cannot decline to provide information behind claims of prejudice to commercial interests. These are projects being funded by consumers, and they have the right to know all relevant material except in the most exceptional of circumstances. We already know how reluctant government and its agencies are to provide information on costs which are overwhelmingly in the public interest. One such example is the apparent unwillingness of the Nuclear Decommissioning Authority and GDF to provide information on the breakdown of costs for cleaning up Sellafield and how the costs of GDF are accounted for in the NDA’s figure for overall nuclear liabilities.

For example, the Nuclear Decommissioning Authority and the Radioactive Waste Management company, which is a subsidiary of the NDA, have been seemingly unwilling to provide a breakdown of how the estimated £96 billion clean-up costs at Sellafield were arrived at and what they account for. Likewise, there is no explanation of whether the nuclear liabilities costs include the additional figures of £20 billion to £51 billion for GDF that was announced in the NDA’s annual report. I noticed, when we debated the GDF issues, that the Minister did not respond to my question about how that is accounted for within the overall NDA liabilities. We already have a reluctance to share information that is overwhelmingly in the public interest.

The record of transparency in these matters is very poor. This amendment would prevent it getting even worse. It is particularly incumbent on the Government to respond and provide assurance to the public, given that they are going to have these costs imposed on their bills for new nuclear power generation, and share all relevant information unless exceptional circumstances prevent that being possible. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, I should have started by apologising for not being able to speak at Second Reading. I have a problem in that I am following two or three Bills at present and there have been some unfortunate clashes. I want to speak on this amendment because I am well known as a supporter of proper and transparent costings. To that extent, I was pleased to see the amendment of the noble Lord, Lord Oates.

However, I thought Clause 13 was quite narrow. It seemed to be concerned with matters that are commercially sensitive or need to be excluded on national security grounds. As a former businessperson, that seemed quite reasonable to me. Obviously, it would be good to know that we will have a proper understanding of costs, particularly to the consumer, which might occur as proposals are developed. I associate myself with the wish to understand the costings, although I am not convinced this amendment is appropriate or necessary.

[Lord Callanan (Con)]

I realise that time is getting on, so I will be as brief as possible. I thank the noble Lords, Lord Oates and Lord Foster, for Amendments 33, 34, 35 and 36. As most of the material is similar, I will take them together, starting with Amendments 33 and 36.

By way of background, I will explain the purpose of Clause 13. Four amendments have been tabled to it, but I reassure noble Lords and my noble friend Lady Neville-Rolfe that this clause is in no way designed to act as a “free pass” for the Government. It is a narrowly drawn provision, allowing for the exclusion of specific, sensitive, commercial and national security information only. I want to be upfront and clear about that. From looking at their detail, I do not believe these amendments will achieve what I suspect is noble Lords’ goal to increase transparency. Actually, they could cause extra confusion.

Amendment 33 makes the publication of relevant material the “primary duty” of the Secretary of State, and so would effectively place transparency above the protection of national security. I submit that this is intuitively wrong; it would be dangerous to subordinate national security concerns to publication concerns.

Amendment 36 would require the Secretary of State to make statements to Parliament about the seriousness of the potential impact of the release of information on the commercial interests of companies and how this is balanced against the public interest in disclosure. This creates ambiguity around the protection of commercial interests, which could have a serious impact on the ability of a project to raise the necessary investment. It would either make it harder to bring forward new projects or, alternatively, raise the cost of financing those projects; either way would result in worse value for consumers. I submit that it also goes against a basic tenet of commercial negotiations and operations: that an investor’s commercial interests will be treated respectfully and confidentially.

Amendments 34 and 35 similarly seek to restrict what information can be excluded from publication or disclosure under Part 1 on the grounds of national security or prejudicing commercial interests. Similar to the previous amendments, the suggestions made in these amendments would add unnecessary and unhelpful ambiguity to an otherwise straightforward provision. Again, this would introduce additional uncertainty for both the Government and potential developers.

Looking first at the addition of “in exceptional circumstances”, there is no obvious legal understanding or definition of what such circumstances would be. This would create uncertainty as to when the provision could be used and what information could be redacted. The circumstances in which Clause 13 applies are already sufficiently set out in its subsection (2). Similarly, given that “seriously” has no clear definition in this context, I submit that the addition of this term would add to the uncertainty and ambiguity about whether legitimate commercial interests would be respected for potential investors. I think that it would make them less likely to go on to be involved in projects.

I understand the desire for increased transparency behind these amendments, but I hope that, given the legal uncertainty of the wording used, I have been able to reassure noble Lords that the Government have no intention of hiding any information that we do not strictly need to in order to respect commercial confidences, so I hope that noble Lords will feel able to withdraw or not press their amendments.

[Lord Oates (LD)]

My Lords, I thank the Minister for his reply. I am afraid that I am not entirely reassured by it, because there is a lot of talk in this Bill about protecting commercial interests but there seems to be little about protecting consumers’ interests. This Bill imposes burdens on consumers, and it is only right that they have available to them information to understand how decisions are made.

I will certainly go away and think about the points that the Minister made. I make it clear that the aim of this amendment was not to compromise the Secretary of State’s ability to exclude material on grounds of national security; I fully accept that that may well be necessary. It may be that the current Minister would not use this test to withhold large amounts of material, but that certainly seems possible, and I think that there needs to be a much firmer test to protect the consumer. No doubt we will come back to these amendments, or versions of them, on Report. In the meantime, I beg leave to withdraw my amendment.

Amendment 33 withdrawn.